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On China's presence and engagement in South Asia

Published onNov 15, 2022
On China's presence and engagement in South Asia

This paper outlines some issues raised by China’s presence in South Asia.

For a theatre of secondary interest, South Asia receives considerable attention, investment and political effort from China.

The Drivers

The traditional explanations for China’s interest in south Asia, which may have been true in the past, are largely defensive. They include: the security and stability of China’s peripheral regions Xinjiang, Tibet, Yunnan, Mongolia); continuing economic growth in these regions; resolving China’s Malacca and Hormuz dilemmas; and, preventing the rise of or use of south Asia and its periphery by an adversarial power by dividing Indochina, Korea and south Asia and working to contain Vietnam, South Korea and India.1 These explanations are still true but are less capable of explaining recent shifts and the present situation.

Recent Chinese behaviour in south Asia shows a growing appetite for risk, and has been described as a ‘forward policy’ (by Mahendra Lama). The shift is evident not just in the manner of China’s pursuit of her objectives—like telling Bangladesh in public to stay away from the US Indo-Pacific strategy. The manner, after all, could vary, as we have seen in the past. But more significantly, it is the substantive nature of China’s engagement in south Asia that has changed in recent years.

China’s changing role in south Asia is primarily evident over four vectors of influence. She is not a cultural presence in south Asia, has not so far been a setter of standards and norms, and her soft power in South Asia is limited. But in traditional hard power areas, such as economics, internal politics, state to state relations, and defence and the military, she plays a growing role in South Asia.

Four Vectors of Influence

Economic:

Trade was the earliest vehicle of China’s influence. Since Xi Jinping’s 2015 visit to Pakistan and the announcement of the CPEC, the flagship of his signature BRI, China’s commitment to Pakistan and south Asia has grown in quality and quantity, amounting to promises of over $100 billion. The future of some of this must now be in question with the developing country debt crisis which also affects Sri Lanka, Pakistan and possibly others in South Asia.

India’s unhappiness at BRI and views on its consequences, some of them borne out by subsequent events, have been made known since 2016. However, they have not prevented India’s neighbours from using the BRI for their own purposes. Indeed it can be said that most South Asian countries, particularly Bangladesh, have shown a high degree of agency in dealing with the BRI.

China has gradually replaced India as the primary trading partner of countries in the region.

India & China Trade with South Asian Countries ($ billion)

2005

2007

2009

2011

2013

2015

2017

2018

China

9.19

14.52

16.57

30.01

41.04

54.71

55.84

59.99

India

7.39

10.53

10.28

17.15

21.17

22.09

24.75

30.96

(Includes Afghanistan, Bhutan, Sri Lanka, Nepal, Bangladesh, Maldives, Myanmar and Pakistan. Source: WITS, World Bank data.)

More than the leverage that trade affords—which is questionable in a world where politics is in command—it is the supply chain dependencies that trade creates which create structural constraints on economic and political choices of both sides. For instance, by some calculations a little over 20% of the value in India’s exports is of Chinese origin, and this has probably worked to ensure that transactional parts of the India-China relationship have not been as affected as in the past by the border incidents and buildup since spring 2020 which plunged the political relationship to a new low.

China also sends more tourists to the rest of south Asia than India, 793,199 to 729,795 in 2018. Each Chinese tourist spends on average US$ 1,850 to US$ 960 by each Indian tourist.2

There is much commentary on the weaponisation of economic leverage by China. Sri Lanka shows both the limits and the potential uses of this leverage. China, like the rest of the world was a spectator to the playing out of Sri Lanka’s internal political upheaval and has yet to respond meaningfully to Sri Lanka’s economic crisis. She has, however, used the crisis to further her geopolitical signalling and reach vis a vis India. The port call at Hambantota of PLA Navy strategic support and surveillance ship Yuan Wang 5, 16-22 August 2022, was reportedly only possible after China threatened Sri Lanka’s appeal for funds from the IMF. According to the media, the ship’s visit was finally cleared despite earlier assurances by the Sri Lankan Foreign Minister to India that it would be postponed.

And yet, China’s willingness to reschedule rather than refinance Sri Lanka’s debt, of which about 20% is said to be owed to China, is yet to be manifest, seven months after Sri Lanka began officially seeking Chinese help. Until today, it is still India that has provided the bulk of food, fuel and credits, amounting to over US$ 3.8 billion to keep Sri Lanka afloat. China’s problem is presumably that what she does for Sri Lanka will set a precedent for other BRI recipients, many of whom face similar challenges as Sri Lanka in servicing their debt.

Internal Politics:

China has also displayed an increasing willingness to be seen choosing sides and even to play a role in internal politics of some south Asian countries like Nepal, Myanmar and Sri Lanka. In Nepal China has made no secret of her preference for unity between the UML and Maoists, and worked to keep that coalition in power. Nor are her preferences in Sri Lanka a secret.

In Afghanistan, China has always maintained a channel to the Taliban, and now seeks to play an economic and political role in stabilising this sensitive part of her periphery that is also a source of instability in Xinjiang. It is still to early to say whether this effort to use Afghanistan’s resources while neutralising support for Xinjiang separatists will succeed.

Conflict Mediation:

Myanmar: Since 2012 when Xi took over, China has offered her good offices to mediate both in Myanmar’s internal political processes, and in the Rohingya refugee crisis. Given China’s economic and strategic stakes in transportation and energy linkages through Myanmar to the Indian Ocean, and Myanmar’s role as a frontline state in China’s contention with the USA, China has consistently sought to position herself as the preferred interlocutor and to exclude other influences, including multilateral organisations, from Myanmar. It has therefore consistently kept close links with all sides of Myanmar’s internal conflicts, managing a balance of power in Myanmar between the military and government on the one hand and the ethnic armed organisations close to its border. In October 2012 China hosted preliminary negotiations between the Myanmar central government and the Kachin Independence Organisation in Ruili, Yunnan. Since then Chinese leaders and special envoys have met regularly with all sides and attended their meetings. Several non-Bamar ethnic armed organisations with close ties to China3 stayed outside the national reconciliation process and the 2015 National Ceasefire Accord (NCA) in Myanmar. In May 2017, after a formal appeal from Aung San Suu Kyi to Xi Jinping, special envoy Sun Guoxiang got the various ethnic armed organisations to attend the second Panglong Union Peace Conference in 2017. Nevertheless, the suspicion remains that Myanmar’s ethnic conflict has provided a platform for China’s efforts to secure her interests and likely to prolong the peace process. China is thus seen in Myanmar as a partner in some respects but not in others.

Rohingyas: When the Rohingya crisis erupted in 2017, China followed the same playbook of mediating, excluding others, and securing her interests. In November 2017 Chinese FM Wang Yi announced a “three phase solution” to the Rohingya crisis at a press conference with then Myanmar State Counsellor Aung San Suu Kyi, involving a ceasefire in Rakhine state, bilateral dialogue between Bangladesh and Myanmar mediated by China, and poverty alleviation. Wang Yi described poverty as the root cause of the conflict. While the Chinese initiative led to discussion on possible repatriation arrangements for the Rohingya refugees in two meetings involving Bangladesh and Myanmar representatives in 2018 and 2019, no actual repatriations took place as a result. To the extent that one can tell, the Rohingya themselves are hesitant about Chinese involvement after Chinese actions in Xinjiang.

Both these initiatives are now quiescent after the February 2021 military coup in Myanmar. But China’s interests continue and her activism in involving herself in the internal politics of Myanmar can be expected to grow.

Defence and Security:

South Asia is also one of the main recipients of Chinese arms exports. The majority of China’s arms exports went to three south Asian countries: Myanmar, Pakistan and Bangladesh in 2017-21, according to SIPRI.

Pakistan: China’s closest security relationship is with Pakistan, which is possibly China’s only real ally. The Sino-Pak quasi-alliance has grown from the supply of nuclear and conventional technology, equipment and weapons, to interoperability in the maritime domain. China has consistently enabled Pakistan’s nuclear and missile programmes to remain one step behind India’s technologically and to keep pace numerically. China and Pakistan have closely coordinated policies in Afghanistan for over four decades, and continue to do so. 71% of Bangladesh’s military imports come from China, 36% of Myanmar’s.

Sri Lanka and Pakistan have received both Chinese weapons and private security contractors from China, while Myanmar, Nepal and Bangladesh have only received weapons.

As for maritime presence, India is presently dominant in the northern Indian Ocean whose sea-lanes carry 80% of China’s oil imports. China has still to overcome weaknesses in maritime domain awareness, tactical air cover, communications infrastructure, and strategic anti-submarine warfare in the IOR. But these may be transient as China establishes strategic access, permanent overseas logistics networks and infrastructure, and bases in the IOR. Gwadar, Hambantota, and other investments in Cambodia and elsewhere will improve PLAN power projection capabilities in the IOR considerably in the next decade.

China’s public posture seeks to reassure about the uses of these capabilities, repeating “bucheng ba 不成霸” But the mere fact of repetition, which is becoming less frequent, raises the question of why this must be stated. The more germane Chinese explanation for her activity in the IOR is that this is an answer to US containment of China’s rise. China is now open in her opposition to the Quad and other efforts involving the US to provide an open and rule-based order in the IOR. This raises the question for India and others whether a weak Quad might provide a false sense of assurance while inviting more aggressive Chinese counter measures.Some analysts see the tension on the India-China land border as China offsetting the maritime pressure she sees developing in the Indo-Pacific.

India

South Asia has joined NE Asia as among the higher priority and most challenging arenas for China’s diplomacy and strategic effort, particularly as her contention with the US becomes more acute. As in north-east Asia, while China has increased her role and influence, questions remain about the effectiveness of her efforts.

The greater Chinese role in South Asia comes when India-China relations are under considerable stress and adds to tension in the relationship. As the conviction grows in India that China is the one major power that actively opposes India’s rise, and as issues like the boundary, China’s support for Indian insurgent groups, and China’s presence in the Indian Ocean region acquire salience and a hostile edge, China’s actions in South Asia complicate the relationship.

A new normal is thus emerging in the geopolitics around India. China is an inescapable fact of life for India in the neighbourhood. India’s answer so far involves the development of independent capability. India is upgrading its capacity to deliver some answers to the economic and technical needs of other south Asian countries. It should also seek to develop a reputation as a reliable provider of security and as a factor of stability in the politics of the sub-region. Both these aspects of policy depend on each other for their effect.

The present economic crisis and political churn in South Asia suggest that the time is right for India to consider more ambitious steps as well. Is there room for collective security and new economic arrangements—such as a rupee payments arrangement; harmonisation of external customs tariffs and elimination of internal barriers to trade; plurilateral counter-terrorism operations building on present agency links, and so on? And what would China’s attitude and role be in that case?

31/8/2022

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