The Challenge Cup is a biennial competition of economics and technology held in China, with nearly 400 universities from across the world participating.

In 2017, the 15th edition of the Cup was organised by the Watson International Olympics, 5th line - with the Belt and Road Initiative as its theme. Ashoka sent its entry for the economics competition. Our paper was titled, ‘India and the Luxian of the 21st century’. Luxian in Chinese means road to success, which Ashoka was on, as it was selected as one of the 39 finalists to present its paper at Shanghai University. Our primary work involved research around the economic impact of the Belt and Road (B&R) initiative on India. This required an analysis of certain empirical models, an industrial review of international trade between India and the B&R countries, and our solutions to overcome the current security and operational shortcomings faced by the initiative.

The week began with a public exhibition of the B&R Initiative’s most innovative technological and financial models on November 12. This gave us an opportunity to discuss our project with other finalists, understand their ideas about the project, learn about new eco-friendly technologies, and understand other economic theories.

The main presentation, however, was on November 13, made before a panel of judges from universities across Asia. In our paper, we used the Ricardian and Heckscher- Ohlin models of international trade to argue that India’s participation in the Belt and Road Initiative will promote specialised trade of goods, encourage innovation, promote employment, and create parity between wage levels and interest rates between countries. Being two of the largest economies in Asia, it only makes sense for India and China to be partners in this initiative and encourage more economic activity. These benefits, however, come with certain challenges. For instance, the need to balance security and economics, the concern of local industry displacement, and a lack of systematic execution of projects. The solution? An autonomous body that addresses economic, political and security concerns of both the countries, and promotes dialogue between the two, more so when China continues to have such bodies with other nations.

Another major issue we addressed with our proposal was of terrorism and security. Most of the Belt and Road corridors pass through Central South Asia. The maritime route, on the other hand, stretches across the Indian Ocean and the Arabian Sea. For long, these regions have been subject to terrorism and buccaneering. A part of our solution was to propose a special state-sponsored financial bond backed by the Asian Infrastructure and Investment Bank and the Silk Road Fund. These bonds are then sold to the central banks of the 65+ Belt and Road countries. These bonds would be traded through a standard currency and use standard lending and borrowing interest rates. However, they would be priced differently for each country, based on a risk- score (a rating for terrorism and piracy levels in a country), tradable volumes, and other market functions.

A high-risk score would mean low prices, whereas a low score would earn a higher premium through greater trade as well. This way, countries would have an incentive to curb terrorism for greater premium on infrastructure bonds.

On the sidelines of the competition, we learned immensely about China’s economic policy, sociological traits, geo- economic disparity, and its culture. Many of China’s issues such as its national debt and a staggering economy, which are widely discussed outside the country look extremely different in it. This helped us think about its governance model more carefully—especially the balance between free markets and autarky. Concurrently, we were simply astounded with how the Chinese embrace their culture, use traditional tools for manual labour, and how central banks still operate with abacus. More than anything, we admire their commitment towards punctuality and discipline. Academically, we gained critical insights into the working of One Belt One Road’s major policymakers, innovators and scientists, thus we remain bullish in the reawakening of the dragon. Our takeaway? It’s time for the uncaged tiger to hop on its back.