China-South Asia Relations: An Opportunity for India

China’s activity in its eastern neighbourhood is what has always made the world sit up and take notice. Beginning with its integration into production networks in the region to increasingly active participation in multilateral forums China has also in recent years raised concerns with its massive military build-ups and assertiveness in maritime territorial disputes. Today, China is confident enough to have and advertise a ‘China Dream’ while trying to mask what is an ongoing economic slowdown calling it a ‘new normal’ and trying to shift overcapacity abroad under the rubric of its ‘one belt, one road’ (OBOR) infrastructure development initiative.

How does China today, impact South Asia? And what does this say about India’s role in the region?

China is already the largest trading partner of most economies in South Asia including the largest one, India. While its economic engagement with South Asia has hitherto ranked rather low in terms of priorities for Beijing, it has always been of great consequence for the South Asian nations themselves. The fact that China enjoys rather substantial trade surpluses with these economies is a matter of some considerable political and economic heartburn in South Asian capitals. That said, affordable Chinese goods, especially mobile telephony and communications equipment have heralded no less than an economic and social revolution in many countries in the region. While Chinese products have destroyed some local industry, many products have also filled vacuums that local enterprises never bothered with or managed to fill.

China’s OBOR initiative is one such exercise that potentially meets the massive need for infrastructure and economic development in South Asia. While the attention has been focused on the China-Pakistan Economic Corridor (CPEC) given its US $ 46 billion valuation, China has also simultaneously targeted major projects in other South Asian countries. Both in Sri Lanka and Bangladesh, for example, multi-billion dollar physical and energy infrastructure investments are expected to add several percentage points to their respective GDP. The CPEC itself is seen not just in economic terms but providing impetus to social transformation and political stability. Indeed, the CPEC adds a layer of complexity to the rather monochromatic Sino-Pak relationship limited to only the political and military spheres so far.

While India has so far resisted being drawn into the OBOR framework, the fact of the matter is that the Chinese have recast the Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC) that has its origins in the late 1990s as one of the prongs of the OBOR. While official Indian response to the idea of BCIM has always been lukewarm, it has turned positively frosty with the Chinese drawing a connection between BCIM-EC and OBOR. However, there is no escaping the fact that the ‘Make in India’ campaign will rely heavily also on Chinese investments and these are, from Beijing’s point of view, very much a part of the OBOR framework.

Meanwhile, China has increasingly robust military ties with Nepal, Bangladesh and Sri Lanka with the latter even a likely client for the China-Pakistan jointly produced JF-17 ‘Xiaolong’ jet fighters. Bhutan and the Maldives have also been targeted with a regular influx of Chinese tourists and increasingly large numbers of students from across South Asia now avail of Chinese government scholarships. South Asian government officials and intellectual elites are also frequently invited to China and hosted lavishly.

The Chinese for all the attention to their east and to the West, have thus, not failed to exploit the tensions in India’s relations with its neighbours in South Asia. And today, it is well and truly entrenched as a regional power in the region.

India can respond by providing a political and economic model of its own for the rest of South Asia. This is not possible with a cultural-nationalist discourse that sets neighbouring governments on edge but rather through political values and an economic growth model that will appeal to citizens in India’s neighbouring countries. China’s growth paradigm that is labour-exploitative, environment-destructive and dependent on feeding local political cronyism will have negative consequences for South Asia, including India. New Delhi will therefore, have to engage Chinese presence in South Asia in order to mold it to Indian national interests.

India can start by encouraging and linking up with the CPEC as a way of influencing Pakistani elites as well as Chinese business interest groups. The latter are, in fact, worried about losing money in Pakistan and in such dead-end projects as Hambantota in Sri Lanka.

Chinese presence in South Asia must be an opportunity for New Delhi to rethink what constitutes the ‘Indian economy’. The ‘Make in India’ campaign must be reconceived as a larger ‘Make in South Asia’ development initiative that would push regional integration. The ‘India Dream’ must be pan-South Asian in vision and content.

By: Jabin T. Jacob, Assistant Director and Fellow at the Institute of Chinese Studies, Delhi. He holds a PhD in Chinese Studies from Jawaharlal Nehru University, New Delhi and his research interests include China-South Asia relations, Sino-Indian border areas, and Indian and Chinese worldviews. Jacob is also Assistant Editor of the academic journal, China Report.

This article was originally published on The Sarcist.

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