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India's Strategy Amidst China's Growing Presence In South Asia – IMPRI Impact And Policy Research Institute

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India's Strategy Amidst China's Growing Presence in South Asia

Srikanth Kondapalli

Despite stating that it does not interfere in the internal affairs of other countries, China has made it an art to coerce countries that receive aid from it. Previously, China demanded deference from other countries to the “One China” policy with regard to Taiwan, Tibet and on its South China Sea disputes with South-East Asian nations.

A submarine base, $5billion in aid, infrastructure projects close to India’s Siliguri corridor, arms transfers and military exercises with Bangladesh — Beijing has made clear to India its intentions to structurally alter power in the region.

As a part of its global and regional hegemonic drive, China is making forays into several regions of the world, including South Asia. Apart from its “all-weather” friend Pakistan, Beijing has made concerted moves in Sri Lanka, Afghanistan, Nepal, Maldives and Bhutan. It is extending and tightening its hold on Bangladesh.

China began preparing for Siliguri Corridor contingencies and forced the then Bangladesh President Gen. Ershad to make a statement in Beijing in 1987 that he would not allow Indian troop transit to North-East India through Bangladeshi territory in the backdrop of the looming Samdurong Chu incident when China had mobilised 200 troops there. It signed a defence cooperation agreement with “reliable friend” and former PM Khaleda Zia in December 2002 and has sold more than $5 billion in arms to Bangladesh, nearly 10% of Beijing’s arms transfers abroad.

Much closer to the Siliguri corridor, which separates Nepal and Bangladesh and provides crucial connectivity to the rest of India to its North-East, China is fishing in troubled waters with a $1-billion dredging project in the Teesta River. After the 2017 Doklam standoff with India, China went ahead and built a road to Jampheri Ridge, not far from the Siliguri Corridor.

Beijing has spent $4 billion on its Belt and Road Initiative projects in Bangladesh, with plans for a total of over $50 billion in the coming years. Bilateral trade between the two countries increased from $1.2 billion 20 years ago to $22 billion last year, making China Bangladesh’s largest trading partner, displacing India. Bangladesh’s trade deficit with China is nearly $21 billion, and mounting. Dhaka’s pleas to China to open up its market for Bangladeshi goods – textiles, jute and other products – have fallen on deaf ears in Beijing.

With its forex reserves falling – it was below $19 billion in May — Dhaka is looking for a $5 billion loan from China. It intends to use this to buy raw materials and for budgetary support. However, while Dhaka wants a long-term loan with preferred interest rate of 1%, Beijing is likely to jack up the interest rate and attach strings, as it has done with many other countries. At least 16 countries in the BRI have high debt levels. Dhaka could learn from the financial meltdown in Pakistan and Sri Lanka. China has already extended $3 billion in loans to Bangladesh, owning currently over 10% of its debt.

Yet another audacious Chinese project is the BNS Sheikh Hasina submarine base at Pekua in Cox’s Bazar that was inaugurated this March, with a $1.21-billion funding from China. It can accommodate six submarines and eight warships. Earlier, in 2016, Bangladesh procured two Ming-class submarines from China for $205 million. Bangladesh’s choice was surprising, given that a Ming-class submarine had suffered a catastrophic accident in April 2003, killing all 70 sailors on board, due to a mechanical failure.

Despite stating that it does not interfere in the internal affairs of other countries, China has made it an art to coerce countries that receive aid from it. Previously, China demanded deference from other countries to the “One China” policy with regard to Taiwan, Tibet and on its South China Sea disputes with South-East Asian nations. Beijing has been lately expanding its demands on other countries’ security policies. In May 2021, China’s ambassador to Bangladesh, Li Jiming, warned Dhaka against associating with the US-India-Japan-Australia Quad as it would “damage our bilateral relations”.

Further, China’s foreign ministry official Liu Jinsong told Bangladesh’s ambassador to Beijing in June 2022 to reject “Cold War mentality” and to not join “bloc politics”. Dhaka is now increasingly under China’s radar for compliance with these demands. How New Delhi counters Beijing’s bid to draw Dhaka even deeper into its embrace remains to be seen.

Srikanth Kondapalli is the Dean of the School of International Studies and a Professor of China studies at Jawaharlal Nehru University, New Delhi.

This article was first published in Deccan Herald as Bangladesh in Dragon’s embrace on June 2, 2024

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.

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Acknowledgment: This article was posted by Bhaktiba Jadeja, a research intern at IMPRI.

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