Economic rivalry

For nearly two years, Chinese President Xi Jinping has been dazzling[da-zu-ling(amazed,चौकाना)] the world with his One Belt, One Road (Obor) initiative.

As countries ranging from Britain to Brunei and Tanzania to Tajikistan jumped on Xi’s Silk Road bandwagon, Japan, the other Asian giant[jI-unt(big,बड़ा)] and the world’s third-largest economy, watched warily[weh-ree(watchful,सतर्कतापूर्वक)] .

The unfolding economic rivalry between China and Japan is great news for Prime Minister Narendra Modi, who will be able to mobilise unprecedented[ún'pre-si,den-tid(New,अभूतपूर्व)] support from China and Japan.

Even more important, Japan’s new activism will allow Delhi to mitigate[mi-ti,geyt(lessen,कमी)] some of the perceived threats from China’s growing economic presence in the subcontinent and beyond. If China is seen as limiting Delhi’s room for manoeuvre[mu'noo-vu(tactic,युक्ति)] in the subcontinent and the Indian Ocean, Japan promises to create new opportunities for leading regional economic integration in its neighbourhood.

As Xi put his personal and political prestige on the belt and road initiative, India found itself between a rock and a hard place. Given its historical rhetoric[re-tu-rik(high flown words,शब्दडाम्बर)] against Western financial institutions, Delhi was quick to join the AIIB and helped found the BRICS bank. But when it came to Beijing’s proposals to develop infrastructure linking the subcontinent to China, Delhi was deeply discomfited. It was also reluctant[ri'lúk-tunt(unwilling,अनिच्छुक)] to accept Chinese funding to develop major infrastructure projects in India.

Modi has altered some of this by becoming more open to Chinese investments and asking them to undertake a feasibility[fee-zu'bi-lu-tee(possibly,संभावित)] study on a high-speed train corridor between Chennai and Delhi. If the essence of India’s economic ambivalence[am'bi-vu-lun(t)s(uncertainty,अनिश्चितता)] towards China endured, Abe might now be able to put Delhi out of its strategic misery.

Last May, Abe announced that Tokyo will invest $110 billion to promote “quality infrastructure” in Asia over the next five years. Japanese officials believe that the quality of Chinese infrastructure is inferior[in'feer-ee-u(cheap,घटिया)] to that in Japan.

They also argue that the hidden costs of Chinese proposals will come to haunt many of the projects being launched under the Obor initiative.

In a series of visits to various regions across Asia, Abe has been pitching for Japan’s project exports. While it has lost some big deals to Beijing, Tokyo has begun to edge out Chinese competition elsewhere. In Indonesia, it lost a bid to develop a high-speed rail line between Jakarta and Bandung. In Bangladesh, Japan won a port at the Matarbari island on the southeastern coast.

Refusing to join the China-promoted AIIB, Japan is trying to rejuvenate[ri'joo-vu,neyt(regenerate,पुनर्जीवित)] the Asian Development Bank that it has led for many decades.

While China is relatively new to infrastructure development beyond its borders, Japan has been at it for many decades. Japanese technology and finance have been at the forefront of building road and rail corridors and airports, including in China. Japan’s overseas assistance arm, the Japan International Cooperation Agency (Jica), has supported many such projects in India, including the Delhi Metro and the Delhi-Mumbai corridor. While Jica’s activity has been expansive, Tokyo lacked a larger strategic framework to guide its infrastructure promotion. But Japan’s traditional development aid has now acquired a strategic dimension under Abe, as he tries to fend off China’s drive to expand its economic and political influence in Asia.

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