'India should become a central component of Asia-Pacific

India should become a central component of the Asia-Pacific strategy of the US, a top American scholar said, supporting President Donald Trump's use of the term "Indo-Pacific" to describe a broader and democratic-led region.

The US has been pitching for greater Indo-US cooperation in the strategically key Indo-Pacific region where China has been ramping up its military presence.

Jonathan N Stivers, commissioner, US-China Economic and Security Review Commission, told a Congressional committee during a hearing on China's One Belt One Road strategy that India should become a central component of the Asia-Pacific strategy.

"India shares our democratic values and we have overlapping strategic interests, particularly concerns about China's policies in the region. The Trump administration is on the right track with the "Indo-Pacific" region terminology and the resuscitation of the Quadrilateral Dialogue with democratic partners Japan, Australia and India last week," Stivers said.
 

Moving forward, the US should ensure there is a strong economic component of the Quadrilateral Dialogue, which is a good forum to discuss a set of policies to counter China's coercive economic and political policies in the region, he said.

In addition, the US should assist India with gaining membership in the Asia-Pacific Economic Cooperation (APEC) forum, support Prime Minister Narendra Modi's 'Act East' policy, and help India with its own domestic development challenges, Stivers said.

"Of all those who live in extreme poverty in the world, 33 percent live in India. India's health, regional connectivity, and energy and electricity sectors must make progress if any Indo-Asia-Pacific strategy is to be successful," he said.

A strong India is in US interests, and the US should place a higher priority on helping India achieve its potential, he argued.

Stivers said the Asia-Pacific region, including India, is absolutely vital to the security and prosperity of the American people.

It is the most dynamic and one of the youngest and fastest growing regions of the world with four of the five projected highest growth rate countries: China, India, Indonesia, and the Philippines. In the next five years nearly half of all growth outside the US will happen in Asia. By 2050, the region's share of world GDP will double and it will be half of the world's GDP, he said.

Roy D Kamphausen, Senior Vice President at the National Bureau of Asian Research, said Belt and Road Initiative reflects Beijing's regional and global ambitions: it is an instrument to consolidate China's position at the heart of Eurasia, in a space where US' influence is rather limited.

"BRI is a continuation of a favourite Chinese strategic gambit that to win without war, one must weaken the adversary's resistance by all means available. In the case of BRI, opposition is weakened through large-scale investment (often without contingencies) and extensive informational, even propaganda, campaigns," he said.

Kamphausen said the Chinese BRI is predatory.

"To date there appears to be little evidence of a competitive bidding process for projects. Agreements are done on a government-to-government basis. This sidelines local companies who do not get access to the contracts," he said.

China's loans are in reality state subsidies for Chinese companies.

They are primarily used to pay Chinese companies to build the infrastructure with Chinese materials, using Chinese workers, he said.

Only 23 per cent of the Chinese aid funding falls under the OECD's definition of aid.

By contrast, 93 per cent of US spending falls into the category, he said.

"Chinese loans are mostly given to projects without a development intent and that have a grant element of under 25 per cent, which reflects China's overall intention to promote its commercial interests overseas," he added.

Loans can be financially unsustainable for poorer countries (over 6 per cent interest rate), he said, citing the example of Sri Lanka which owes 10 per cent of its debt to China (over USD 8 billion).