Growing Chinese power and influence in the subcontinent The Excelsior 04 Apr 2023
Bhutan’s Prime Minister, Lotay Tshering, speaking to Belgian Daily, La Libre, stated that China is an equal partner in the Doklam dispute. He mentioned, ‘It is not up to Bhutan alone to solve the problem. There are three of us.’ In 2019 Tshering had stated that no country should do anything near the existing trijunction ‘unilaterally.’ This is a marked shift on Bhutan’s stand in an issue which is of primary concern to India. India and China faced a 73-day standoff over Chinese construction activities in Doklam in 2017.
The current statement by Tshering is possibly admitting that Bhutan has limited options in dealing with China. Beijing had offered to give up its claims to Northern Bhutan in return for Thimphu accepting Chinese claims on Doklam. Chinese and Bhutanese officials had met in Jan this year and agreed to resolve pending border issues. Thimphu had thus far resisted Chinese threats due to Indian support but there now appears to be a change.
China will always have its backers in Kathmandu, no matter which government is in power. There will always be political entities pro and against India and China. Nepal sandwiched between two powers, dependent on India for transit but has to contend with China salami slicing its northern territories. It has resisted China’s BRI (Belt Road Initiative) aware that it could lead to a debt trap.
Interestingly, a Chinese delegation arrived in Nepal on 27th Dec (a day after the new government was sworn in) to undertake a feasibility study on the Kerung-Kathmandu 170 Km railway line, likely to cost around USD 5 Billion, which is over 10% of Nepal’s GDP, pushing it into a debt trap. Whether Nepal will accept the proposal, under pressure from China, remains to be seen. The Pokhara international airport, inaugurated on 01 Jan, was dubbed as part of the BRI by Chinese media, whereas the reality was that it was constructed based on a loan taken from China in Mar 2016.
In end Dec, China reopened its borders for trade with Nepal, after a hiatus of three years, displaying that its relations with Nepal will depend on which party controls the country. Western powers have been warning Nepal about expanding Chinese geopolitical and geostrategic footprints. There is a concern that growing Chinese interference in Nepal could damage Indo-Nepalese relations as also break Nepal’s non-aligned policy, making it into China’s client state.
Currently Sri Lanka owes one-fifth of its debt to Chinese banks. India and China are the two main lenders to Sri Lanka. While China hesitated, India wrote to the IMF stating ‘it would commit to supporting Sri Lanka with financing and debt relief,’ opening doors for Columbo to obtain aid. China was compelled to follow under global pressure. Delay by China did impact its standing within Sri Lanka.
At the peak of its economic crisis, it was India which came forward to support. The Sri Lankan foreign minister, Ali Sabri, tweeted post meeting Jaishankar, ‘Sri Lanka is fortunate to have a caring and considerate friend (India).’ Simultaneously, China continues to maintain influence over some Sri Lankan political leaders, exploiting India’s backing for Tamil minorities. China already has control over the Hambantota port, where Chinese spy ships have been docking, despite Indian concerns. Sri Lanka is unlikely to seriously influence Chinese decisions on docking of ships in Hambantota.
Bangladesh has been the second highest receiver of Chinese loans. Its current default stands at around USD 12.5 Billion of which 4 billion is to China. In Feb, the IMF approved a USD 4.7 Billion ‘stabilization package’ for Bangladesh, intending to protect its economy from collapsing. Dacca has stopped taking Chinese loans. PM Sheikh Hasina stated, ‘We are very much careful about taking loans. From China, our loan is very low. It is not like Sri Lanka or anybody.’ Bangladesh’s finance minister stated, ‘Everybody is blaming China. China cannot disagree. It’s their responsibility.’
The arrival of a pro-India government in Maldives has curtailed Chinese influence in the country, though it owes USD 1.5 billion to China. With Maldives heading for presidential elections this year, competition between India and China is bound to skyrocket.
Pakistan is facing a multitude of problems. It is at a stage of default, with the IMF still unwilling to grant a bailout, impacting relief from other allies including Saudi Arabia and the UAE. Pakistan owes one-third of its debt to China. Its internal scenario is such that no other country is willing to fund or even invest in it. Riyadh was the latest to demand Pakistan review its internal structures. Islamabad’s circular debt is around Rs 1400 billion.
China rolling over a two billion debt is only partial relief; much more is needed. With depleting foreign exchange reserves, Pakistan has almost no alternative but to continue turning to China. Beijing supports Pakistan for multiple reasons. The first is that Pakistan has always acted on directions of Beijing. It has ensured that India’s security attention remains divided.
Secondly, it cannot allow its showcase CPEC (China-Pakistan Economic Corridor), the basic cause of Pakistan’s economic collapse, to fail. It will be a setback to Beijing’s BRI reputation. Thirdly, Pakistan’s debt opens doors for China to grab control of resources within Baluchistan as also the Gwadar port. While it may be forced to face the wrath of the Baloch in exploiting their region, Gwadar will provide it with major strategic advantages including securing its oil imports, dominating the Arabian Sea and the Persian Gulf. Gwadar will possibly be a future military base, which could be exploited in operations with India.
For India, increased Chinese dominance in its vicinity has always been a matter of concern. India has adopted the ‘neighbourhood first’ policy though not much has been witnessed towards this end. Speaking at the India International Centre last week, S Jaishankar stated, ‘This region is going through a very difficult period. If you look at our neighbourhood, a lot of our neighbours are suffering from issues, some of which are not of their making.’ India must strategize and act to support its neighbours to counter growing Chinese presence and influence in its vicinity.