Over the past decade, China has expanded its footprint in South Asia beyond infrastructure financing and development partnerships to include political and governance cooperation, security exchanges, and people-to-people relationships. However, the expansion comes at a cost that is beyond economic.
In our project, China’s Impact on Strategic Regions, we aimed to understand the nature of Chinese engagement in Bangladesh, the Maldives, Nepal, and Sri Lanka. China has emerged an attractive partner because of its strategy of attending to the development priorities of these countries. In many cases, relationships have grown so quickly that many have struggled to grapple with the implications. Impact is highest on states already under duress and shows in their institutions, civil society, or in elites being prone to being influenced. Therefore, for every successful partnership, such as the Matara-Beliatta railway in Sri Lanka, there is an instance of the Chinese embassy in Bangladesh objecting to expressions of Tibetan resistance; or for a China-Maldives Friendship Bridge being completed, there is an instance of threats to Nepali publications reporting on Covid-19.
Why then, do the countries partner with China? These states are keen to fulfill their development priorities and seek partners that can consistently assist them. China has carefully developed an image of listening to what the countries need and delivering. Additionally, contrary to popular discourse, these states wield considerable agency. In 2015, for instance, the Sri Lankan government suspended several projects citing regulatory lapses. In 2018, Bangladesh blacklisted the China Harbour Engineering Company following its attempts to bribe a government employee. And in the Maldives, the current administration has questioned the amount China claims it owes them.
The challenge for India, the United States (US), or others interested in the region, is to develop a policy that productively engages these countries. This policy should be based on its own merits, delinked from how these countries engage with China, and should aim to demonstrate an intent to engage. By leaving out Bangladesh and Sri Lanka from the Summit for Democracy, the US has missed a low stakes, high return opportunity to show these countries that they matter.
Prospective partners have enough to do, starting with helping address systemic deficiencies. This includes assistance in developing an effective process of oversight, investment screening, and contract review. Maldives and Sri Lanka have maximum exposure to Chinese debt and may require assistance in developing a way forward that allows them to service or restructure the debt.
Bangladesh, Nepal, and Sri Lanka have either graduated out of least developed status, or, are on their way. This makes them ineligible for much of the concessional financing available. The US can use its influence in Western organisations to ease the transition and help these states develop the capacity to access alternative avenues for assistance.
Most importantly, technical assistance and capacity-building must prioritise civil society and people-to-people connections. State-supported financial assistance has made China an attractive destination for students from the region. However, educational institutions in the US and other Western countries still command respect. Making Western institutions more accessible to students from the region, at the very least, through tie-ups with local institutions, can both serve a purpose, and be economically viable.
Finally, media outlets and civil society have been focusing on good governance. They have questioned the human rights records of the regimes, and pointed out opacity in Chinese contracting practices, often at great risk to themselves. Enabling them to get stronger will empower these constituencies to ask tough questions and demand transparency.
The article was co-authored with Saheb Singh Chadha for the Hindustan Times on December 02, 2021.