China in South Asia: India cannot match Beijing in its largesse, but it can create goodwill

With Chinese President Xi Jinping’s successful visit to Bangladesh, plans for China’s Belt and Road Initiative (BRI) have effectively encircled India. Multi-billion dollar, Chinese-financed infrastructure projects are planned in almost all of India’s neighbours, from Pakistan, Bangladesh, Sri Lanka, the Maldives and Nepal to Myanmar.

President Xi Jinping on his visits to South Asia has brought grand infrastructure plans for his hosts — during his visits to Sri Lanka and the Maldives in September 2014, to Pakistan in April 2015 and more recently to Bangladesh. Xi’s visit to Pakistan resulted in the multi-billion dollar investment in the China-Pakistan Economic Corridor that connects China’s Xinjiang province to Gwadar port in Pakistan. Former Nepalese Prime Minister KP Oli’s visit to Beijing earlier this year brought forth bountiful promises of infrastructure assistance. China’s involvement in Myanmar is of a longer standing, among several major infrastructure projects is a gas pipeline that transports natural gas from Maday port on the Bay of Bengal to China’s Yunnan province and a proposed rail line along the same route.

Representational image. AFP

Representational image. AFP

India has had reservations about the Belt and Road Initiative, especially the China-Pakistan Economic Corridor that passes through Pakistan-occupied Kashmir. But all its neighbours, with the sole exception of Bhutan, have welcomed the Chinese initiative with enthusiasm. India is however engaged in the Bangladesh-China-India-Myanmar (BCIM) economic corridor, which aims to connect Kolkata with Kunming, in China’s Yunnan province, passing through Myanmar and Bangladesh. The BCIM corridor is a long-delayed proposal which Beijing has now referred to as part of its BRI plans.

Bangladesh and China signed agreements worth $24.45 billion for 34 projects and programmes during Xi’s visit to Dhaka on Friday, reported Bangladesh's largest-selling English daily, The Morning Star. While no details of projects were made available during the signing, they are expected to cover financing for infrastructure, energy, and communication projects. As the two sides elevated their ties to strategic partnership, Bangladesh expressed its support to China’s Road and Belt Initiative and the BCIM economic corridor. They also agreed to negotiate a free trade agreement. China is Bangladesh’s largest trading partner and supplier of defence equipment.

Sri Lanka was the first South Asian country to receive large investments in big infrastructure projects during the Mahinda Rajapakse regime. But when the Maithripala Sirisena government came to power in a surprise election victory in January 2015, it began a review of the controversial $1.4 billion Colombo port city expansion project. The Sirisena alliance had charged Rajapakse of turning Sri Lanka into a Chinese dependency and had vowed to review all major Chinese investments. However, the Sri Lankan government later cleared the new Colombo city project after changing some conditions in the deal. China offered to align its maritime silk road project with Sri Lanka’s development plans to enable the island nation to become a shipping hub in the Indian Ocean.

The Maldives, like Sri Lanka and Pakistan earlier, has faced international pressure over its policies. All three countries have found firm support from Beijing, which has helped them withstand the pressure. Earlier this week, the Maldives announced that it would quit the Commonwealth, the 53-member organisation of mainly former British colonies. The Maldives had been warned in late September by the Commonwealth Ministerial Action Group (CMAG) that it would be suspended if it did not take adequate steps to encourage political dialogue, release opposition leaders and improve democratic functioning in the country.

Large scale Chinese projects in the Maldives coincided with India's troubles in Male. The contract for modernising and operating the Male International Airport, granted to a consortium led by the Indian infrastructure company, GMR Group was cancelled by the new government. International arbitrators ruled in GMR’s favour, but the contract for the expansion of the international airport was awarded to a Chinese company. A Chinese construction firm is building the $280 million China-Maldives Friendship Bridge that would connect the Hulhule island where the international airport is located to a suburb of Male. Other projects included large housing projects and other infrastructure assistance.

China is the largest foreign investor in Nepal with two large hydropower projects underway in the country. Among the projects that were discussed during the KP Oli visit were construction of cross-border transmission lines, an international airport at Pokhara, and extension of China’s Qinghai-Tibet rail line to the town of Jilong on the Nepal border and then to Kathmandu. The visit was marked by the fact that it was only the second time that a Nepali Prime Minister had chosen to visit China in his first foreign tour. However, a return visit by Xi in October had to be put off after the Oli government fell and the Communist Party of Nepal (Marxist) leader Pushpa Kamal Dahal Prachanda formed a new government in Kathmandu.

Till a decade or more ago, China’s involvement in the relatively under-developed South Asian region was limited. But in the past couple of years, Beijing with its large financial resources looking for a destination began making a major push for connecting to South Asian countries with its grand BRI plan. While India cannot match the Chinese largesse, greater generosity in its dealings with its smaller neighbours can win it more friends and create goodwill through the region.

Updated Date: Oct 15, 2016 12:24 PM

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