The rise and fall of powers is founded in their economic influence, which is furthered by strategic and diplomatic capabilities. The People’s Republic of China has proliferated an aggressive diplomatic endeavour across the globe through supply-chain penetration and investment. A stark example of the same is the Belt and Road Initiative, the responses to which have been mixed. India and Jamaica typify the reaction from two types of developing countries, an emerging economic powerhouse and a small island developing state. In India’s case, the extensive history of relations between the two countries have contributed to a level of distrust in their relations. On the other hand, Jamaica, as a small island developing state, has accepted Chinese investment despite concerns from the local population. India’s and Jamaica’s foreign policy stances to Chinese investments reflect their positions in the global economy and the factors that influence the priorities of each nation.
Wallerstein’s Theory on the International World Economic Order
It is often argued that the world system is an unequal space of anarchic domination that runs on the fuel of realist notions of power and interest. Immanuel Wallerstein challenged this idea by redefining international politics through a historical analysis of the world system as seen with Marxist lens. This was achieved by analysing the embedded corollaries of the world capitalist economy. In his paper The Rise and Future Demise of the World Capitalist System: Concepts for Comparative Analysis, Wallerstein builds upon the Marxist school, the Annales school, and dependence theory in explaining his world system. According to him, “a world-system is a social system, one that has boundaries, structures, member groups, rules of legitimation, and coherence. Its life is made up of the conflicting forces which hold it together by tension and tear it apart as each group seeks eternally to remould it to its advantage. It has the characteristics of an organism, in that it has a lifespan over which its characteristics change in some respects and remain stable in others… Life within it is largely self-contained, and the dynamics of its development are largely internal”.
In the ‘world system’, economic integration supersedes political relations among states. Such integration is determined by a ‘multicultural division of labour’, which, at the international level, is divided into the core and periphery . This structural division is buffered by a third division called semi-periphery. The core constitutes the powerful and wealthy societies that dominate and exploit weak and poor peripheral societies. Technological advancements reinforce this subordinate position of peripheral nations to the core. Capital accumulation is intensified by the core as it provides differential access to surplus flows to the peripheral countries, as per its interest determination. Neo-colonialism is a stark example of core and semi-peripheral domination of the peripheries of the world, slowly usurping and appropriating the surplus flows into their own societies. The United States, and increasingly, China, have become beacons of such unequal access and economic relations.
Wallerstein argues that it is the global economic system that hinders or encourages the development of nations. This is primarily achieved through the types of production that takes place within the global economy. Jamaica’s foreign policy reflects its geopolitical situation as a nation situated in the semi-periphery. As a result, the nation is heavily dependent on overseas investments which is reflected in the economic history of the nation. For instance, between the 1950s and 1960s, Jamaica, “Imported energy, raw materials, and semi finished goods for manufacturing, capital goods, consumer goods, and half its food; imports accounted for over 60 percent of what was consumed in the country. To pay for its imports it relied on mineral exports (bauxite and alumina accounted for 64 percent of exports in 1975) and on agricultural products (bananas and sugar).” This dependent relationship also extends to the country’s source of tourists, its primary export markets and the high import content of local manufacturing.
The challenge with this situation is that the foregoing of investment by wealthier countries can significantly affect the local economy as seen during the 1970s. With the increase in oil prices in the 1970s, along with the withdrawal of US aid and discouragement of tourists to visit Jamaica, the economy significantly declined during this period. This was due to the domestic policies pursued by the government at the time. Thus, Jamaica’s dependence on the United States illustrates the difficulty in maintaining foreign policy priorities separate from the global hegemon. This principle also guides the country’s relationship with China.
India, on the other hand, is a semi-peripheral state which is on its way to becoming a great power. A labour-intensive economy with a significant increase in technological progress, India is the buffer between the core and periphery, which continues to strive for a balance of power in the class struggle on the world stage. Chinese neighbourhood and amiable industrial, political and diaspora relations with the United States are the two figments of foreign policy between which India seeks to define its independence and sovereignty. As the world’s largest democracy with a threateningly ugly colonial history, India has had its fair share of colonial debilitation, which is now slowly being replaced by neo-colonialism. India fits in the description of a semi-peripheral country as it is not powerful enough to dictate economic and political policy but has sources of raw materials and an expanding middle-class marketplace which exploits peripheral nations, and is exploited by core nations.
Comparison Between Jamaica’s and India’s Foreign Policy Towards China
A comparison between the responses of two semi peripheral countries Jamaica and India, in their response to the Chinese investments such as the ‘One Belt One Road’ is needed in order to understand the economic subjugation of these countries, and their response, both bitter and sweet, to the same through discourses and diplomatic endurance.
Background of the Jamaica-China Relationship
Since its independence, Jamaica has adopted a pragmatic approach to its foreign policy. Even though the country is situated within the backyard of the United States, Jamaica has been guided by its own interests. This position was expressed as early as 1962 as revealed by Heartley Neita in his book, Hugh Shearer: A Voice for the People. Then Minister with responsibility for foreign affairs, Hugh Shearer, stated that friendship with foreign nations will not carry a price tag and Jamaica does not take instructions from any nation. This position was tested very early on in the country’s history when Jamaica spoke in favour of admitting the People’s Republic of China to the United Nations in 1966, even though the United States was opposed to this position. By 1972, ten years after independence, Jamaica became one of the first English speaking Caribbean nations to recognize the “One China Policy.” Shortly after this declaration of support, the Chinese government established an embassy in Jamaica and has continued to support local developments.
Since the 2000s, China has made significant investments within Jamaica in various portfolio areas. Between 2005 to 2018, Jamaica received loans from China Development Bank and China Ex-Im Bank that amounted to US$2.1 billion. Many of these investments have focused on improving the infrastructure within the country. These include loans, a US$45 million loan for the construction of the Montego Bay Convention Centre in 2007, US$400 million loan which went towards road construction in 2012 with another US$300 million loan in 2013 which went towards road and bridge rehabilitation. However, the largest source of loans has been dedicated to road construction including a 2013 US$457 million loan that was directed towards the north-south toll road construction and a 2017 US$327 million loan which was earmarked for the Southern Coastal Highway Improvement Project.
Figure 1: Chinese Loans made to Jamaica Between 2005 – 2018
This trend of deepening the two country’s bilateral relationship culminated in the announcement in 2019, that Jamaica will be joining China’s Belt and Road Initiative, making the country the tenth in the region to join this initiative. At the time, the expectation from this arrangement was that Jamaica would be able to benefit from Chinese investments and financing in critical areas including manufacturing, logistics, global connectivity and corresponding infrastructure to achieve these objectives. These investments are emblematic of the increasingly larger role of China internationally.
However, it is important to note that Chinese investment is not only limited to physical infrastructure. The mining industry is another sector that has received significant investments by China. For example, Jiuquan Iron and Steel Company purchased the Alpart Bauxite Refinery in the rural parish of St. Elizabeth for an estimated USD500 million from UC Rusal. The company also pledged to invest in USD 2 billion in projects such as a 500,000-ton aluminium plant which is expected to create between 800 and 1,000 jobs when completed. This is also accompanied by agreements to invest in manufacturing, light industry and resource processing.
Concerns Surrounding Chinese Investments in Jamaica
Despite these investments, Jamaica is impacted by the global economy and its inherent structural challenges. For example, the aforementioned mining investment announcements have not materialized due to the closure of the alumina plant for two years due to a glut of alumina on the market and, the slowdown of the global economy and the high plant operating costs. Even though, China represents a major source of local investments, these investments are subjected to the structure of the global capitalist economy. Since Jamaica’s economy continues to rely on extractive industries to fuel its growth, it is subjected to the same vulnerabilities that impact resource dependent semi-periphery nations.
Quite often, Jamaica’s foreign policy positions are guided by investments made by other countries. Chinese investments in the country have come at a time when overall US investments within the Caribbean have declined precipitously. Currently, the United States has reduced its foreign assistance to Jamaica to under $1 million in 2019. As a consequence, there is a growing reliance on China to meet other needs that are no longer being addressed by the United States. Notwithstanding this, Jamaica is under pressure to maintain its relationship with the United States, the country’s largest trading partner. Continued neglect by the United States has emboldened Caribbean territories to play international powers off each other in an attempt to secure their interests due to the limited options available. Compounding this issue is the fact that countries within the region fall in the middle-income bracket of nations which restricts access to financing. It has also been argued that the region is geopolitically important for China as it is situated in a strategic position with close proximity to the United States. This has further complicated relations with Washington since there is the continued belief that Latin America and the Caribbean are secured in America’s “backyard.”
In recent years, Chinese investments have caught the attention of then US Ambassador to Jamaica, Donald Tapia who has argued that China is a predatory nation whose sole intent is to own countries’ economic infrastructure and entangle them with debt. This he argued is achieved with seemingly enticing deals and uncompetitive loan agreements. To address these concerns, the government of Jamaica has adopted a cautious approach towards taking additional loans from China for infrastructure programmes. In fact, the government announced in 2019 that it would no longer take new loans from China and that it would pursue public private partnerships for future projects. According to Finance Minister Dr Nigel Clarke, loans from the Chinese accounted for 3.9 percent of Jamaica’s total debt. These loans are not a burden on the country as the total amount of loans would equate to an estimated $78 billion out of the country’s whole loan portfolio of $2 trillion JMD. The government has also expressed that these loans will be repaid within ten years.
Consequently, despite the government’s receptive stance towards Chinese investments, concerns also linger regarding the specific terms surrounding these arrangements. Jamaica’s foreign policy priorities are concerned with attracting new sources of investment. To achieve this objective, significant concessions have been granted to Chinese firms in Jamaica. For example, to offset the cost construct the North-South Highway, the Jamaican government transferred 1,200 acres of prime land adjacent to the highway to the China Harbour Engineering Company (CHEC). This has fuelled concerns surrounding whether further concessions have been made by the government that has not been made known to the public. Other concerns relate to the continued trend of giving large contracts to Chinese firms such as CHEC instead of local developers. This issue was once again raised in light of the announcement this year that the Montego Bay bypass for Jamaica’s second largest city will also be constructed by CHEC after the government decided to bypass the competitive bidding process. Further exacerbating this issue, are the accusations of workers’ abuse levied against CHEC. These incidents have all created mixed views of Chinese investments locally.
The Peacock-Dragon Parley
The Asian Century commences with the rise of the two Asian giants – India and China. Demographically, spatially, and in terms of influence, the two portray the largesse of searing independence and have treaded their paths towards a strategically and economically powerful group that riddles the world system today.
Indo-China relations date back to the shared “peace religion” of Buddhism. Culture and civilizational exchanges form the foundation of the historical friendship of the two, smudged by the British Opium chase which brought the two sides against each other. After this bitter experience, Indian Prime Minister Jawaharlal Nehru and Mao Zedong of China joined hands through the Panchsheel Agreement thereby becoming affable companions of Asia. The congenial ‘Hindi-Chini Bhai Bhai’ elapsed with the invasion of Chinese forces into Indian territory in 1962 after a series of battling conversations between the two countries owing to the ill-determined sovereignty of the disputed Tibetan plateau and differences in deciding the demarcations of their political boundaries. Since then, Indo-Chinese relations have been uncertain and volatile, while economic penetration of the two in each others economies has increased tremendously. Security is the priority of every nation-state in the anarchic world system, and this is showcased, to a large extent, by the Indian and Chinese Foreign policy as well.
Chinese outlook is determined by the current security environment, which is anchored by the diplomatically aggressive pursuit of its five foreign policy objectives- diversifying access to natural resources, reassurance, fostering economic development, countering constraints, and reducing Taiwan’s stature. These objectives, rather priorities, are customized to the flows and events in the international environment. Through these, China aims at triumphing its development, sovereignty and international status above and beyond the Eagle’s. This finds comfortable evidence in the dialogues and statements of the Chinese Premier and his plenipotentiaries. The definition of the ‘how’, ‘when’ and ‘what’ of the Chinese Foreign Policy is constituted of the approved tifa or strategic guidelines from the Communist Party’s quarters. Described by Evan Medeiros as an ‘increasingly active and robust diplomacy’ or an ‘all-round diplomacy’ the diversified hues and nuances of the Chinese approach towards the world is one of ideologically, politically, economically pursuing the national interests with vehement precision, clout and strength. The Belt and Road Initiative is the peak of its desire to acquire the status of a ‘great power’, a concerted move from the ‘periphery’ to the ‘core’. An epitomization of its economic and realpolitik diplomacy, it is successfully blockading and posing a serious challenge to geo-political and geo-strategic pandoras of the West, globally, and India in Asia.
India’s foreign policy places territorial integrity at the heart of its security objectives. As China proliferates antagonising trends against India in its neighbourhood, an increasingly pugnacious relationship keeps boring its roots, making the region an aggressive stage of power struggle between the two Asian giants. In Pakistan, for example, Chinese beggar-thy-neighbour policy interests come in the form of the China-Pakistan Economic Corridor. Apart from being an issue of territorially expansionist vicissitudes, it is one that raises geopolitical and economic issues. The project runs in military sensitive areas of Pakistan-Occupied Kashmir which India claims legion over. This, amongst problems caused in Delhi’s relations with Nepal, has reduced the two to mere rivals, thirsty for power.
As powers with global ambitions, they both seek to establish their influence in and beyond their vicinities. Both the countries find the other’s advances as a strategic challenge, finding their relationship reaching the tipping point ever so often. In an attempt to establish a positive-sum game, China has been noticed to be hard-wired to strike the wrong chords by its continuous scorching strategic quid pro quo. China enhances its casino capitalism of supply chain domination, military aggression across Indian land thereby strong-holding the strategic interests of New Delhi. This has been exemplified by its cheque-book diplomacy in India’s neighbourhood, continuous tribulations to increase its product share in Indian markets and the famous Belt & Road Initiative.
The Belt & Road initiative, in India’s opinion, is more than just an endeavour to increase commercial enterprise and interconnectivity. The four corridors – the CPEC, the BCIM Economic Corridor, the Trans-Himalayan Economic Corridor, and the MSR – will have direct implications on India’s strategic interests. With such a large Chinese presence in India’s neighbourhood, India finds its realist perceptions peaking with the vast imbalance this brings in the region. Finding this penetrating diplomacy belligerent, India has started strengthening its place in Asia and across the world keeping the need to establish balance of power in the region in mind. India’s ‘Act East Policy’, ‘Look West Policy’, and ‘Neighbourhood First Policy’ are all attempts to launch its industriousness into these regions. Such counter-endeavours have not found striking recognition and success internationally yet, but have opened India to the status of an emerging power. Piece-meal diplomacy has dominated the foreign policy arena from the Indian stage, with a bit-by-bit spreading of its influence in the sectors of telecommunication, power generation, diasporic expansion and more. New Delhi has previously accused China of spreading its influence using credit imperialism and capturing them in debt traps, thereby putting them under economic bounds using irredeemably high interest rates. While seeing it as ‘strategic encirclement’ in the North and South, India has raised concerns regarding the hidden intentions of the Chinese government, continuously pointing at the covert involvement that the state has in its domestic functioning and in the international community as well. Putting roadblocks in the Chabahar Project, establishing friendlier relations with the Sri Lankan government are indications of the rogue strategic attitude China has started to assume. India, responding to this, has started strengthening its border management strategies by building massive infrastructural marvels at the heights of Himalayas and in the North-East region. Kaladan Multimodal Project, an economic and maritime project India has undertaken to enhance ties and connectivity with Myanmar and beyond is a striking example of the same. India is also trying to establish itself as the net security provider in the Indian Ocean, but progress is slow.
Although the relations of the two countries are dotted by sporadic cordiality, tension remains dominant. China-India High-Level People-to-People and Cultural Exchanges Mechanism, ‘Hand-in-Hand’ joint anti-terrorist exercises are the few examples of cooperation. Economic penetration, in addition to the above, intertwines the two economies with large mutualities on the line. A lapse in relations impacts both the countries and their survival. The resilience in trade ties is evident in the surging import-export witnessed during times of excruciating conflict and border clashes. Chinese exports to India grew 64.1% year-on-year from January to May, while imports surged 90.2%, at a time when the two countries were at loggerheads in the Galwan region of Ladakh.
India’s major exports to China in the last six years were iron ore, petroleum fuels, organic chemicals, refined copper and cotton yarn. China, on the other hand, exports products such as telecom instruments, computer hardware and peripherals, fertilizers, electronic components/instruments, project goods, organic chemicals, drug intermediates, consumer electronics, electrical machinery. In light of such interdependence too, it is imperative for India to chart its independence from the trapping supply chains of Chinese products, while also ensuring it is able to influence its neighbour’s foreign policy, with a thrustful sway in their decision-making.
With the platitude of Panchsheel already in place, idealism seems like a less pragmatic approach, due to the sheer strategic posture of China. For India, lessons from the Third Battle of Panipat remain relevant. If India does not muster a comity of allies, does not place its bets and webs in the right places, it may have to bow to the might of the other, before the battle even begins.
Conclusion
It is, thus, palpable that there is a variegated approach from China towards the two categories of nation-states. As B3W takes shape and the West stands together to fight the rising diplomatic expansionism of China, it remains to be seen as to how Wallerstein’s observations regarding the temporal fixation of the division of labour stands, and whether China succeeds in its vision to become the greatest power as the Chinese Communist Party commences the new century.