Beware of China Bearing Gifts

Today, the Chinese portray the 15th century voyages to the Indian Ocean by their admiral, Zheng He, as aimed at promoting diplomacy and trade. But the record shows that these were expeditionary voyages of the Ming dynasty navy that apart from making gifts to local leaders and religious and other institutions along the route also involved itself in local politics. In one case, in Sri Lanka, Zheng even effected a regime change.

History has been repeating itself after a fashion in the modern era with China throwing its support behind then Sri Lankan president Mahinda Rajapaksa’s in his fight against the LTTE, his economic development programmes and then his re-election effort in 2015. Following his loss, however, Beijing slowly made amends with his successor Maithripala Sirisena, and recently announced a ‘gift’ of US$295 million to be utilized for any project of the latter’s wish.

Of course, in the background also lies the transfer of Hambantota port in Sri Lanka’s south along with 15,000 acres around it on a 99-year lease to the Chinese company operating the port by way of Colombo meeting its debt obligations incurred under Rajapakse. This had occasioned protests against the Chinese and the Sri Lankan government.

Hambantota and other Chinese infrastructure projects in South Asia come under the rubric of Beijing’s Belt and Road Initiative (BRI). And if China’s record is anything to go by, South Asian economies are walking into debt traps by participating in the BRI.

As Sri Lanka has discovered, Chinese infrastructure development does not come free or even cheap. Even Pakistani politicians and intellectuals have frequently raised questions about the terms of CPEC projects.

In November 2017, Pakistan turned down the idea of including the Diamer-Bhasha dam in PoK in the CPEC because as a Pakistani official put it, China’s conditions for funding were ‘not doable and against our interests’. This followed Nepal’s termination of a MoU with a Chinese company for the joint construction of the US$2.5 billion 1,200MW Budhigandaki Hydroelectric Project. The then Nepalese Deputy Prime Minister declared the agreement was ‘marred by irregularities’. Meanwhile, in January this year, the Bangladesh government blacklisted the Chinese company that had been awarded the Dhaka-Sylhet road expansion project for attempting to bribe local officials.

India has stridently opposed the BRI for a variety of reasons. These range from the violation of its sovereignty in Pakistan-occupied Kashmir with the China-Pakistan Economic Corridor (CPEC) to the lack of transparency and accountability in the terms of the Chinese contracts, and their questionable environmental and labour standards and practices.

While New Delhi is correct in raising these and other security-related concerns about the increasing Chinese presence in South Asia, it has also been doing this for too long without either offering credible alternatives to its smaller neighbours, including Pakistan, or even seeking to place its bilateral relations on a more stable, friendlier footing.

The Indian fuel blockade against Nepal in 2015, for instance, appears to have fundamentally changed the mood in that country against India with all parties clear that any kind of dependence on India is unsustainable. The Chinese have nimbly stepped into the breach starting with offering Nepal among other things, an alternative Internet gateway and a new police training academy but also now using Tibet as the channel through which the BRI will connect with Nepal.

The economic integration of South Asia has so far been a failure because India as the central player – both in terms of geographic location and size of economy – has failed to take leadership, and make the necessary concessions to persuade, cajole or incentivize its neighbours. Today with the BRI, however, China, which is not even a member of the SAARC looks to knit the economies of South Asia together minus India and to reorient them away from their larger neighbour.

When complaints are raised against BRI, meanwhile, Beijing is quick to publicly offer to renegotiate terms as it has with Imran Khan’s government-in-waiting or to offer sweeteners as it did to Sirisena. While some of these announcements might not amount to much, Chinese confidence stems from the fact that its biggest challenger, India, is known in the rest of the region more for its big brotherly attitude and the lack of synergy and capacity to implement its promises.

New Delhi, therefore, needs to reconsider its attitude to its smaller neighbours and start walking the talk.

This article was originally published as Jabin T. Jacob, ‘India’s neighbours should beware of Chinese bearing gifts’, Moneycontrol.com, 16 August 2018.

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