China's South Asia outreach has a 'minus India' angle amid New Delhi's 'Neighbourhood First' push

Bengaluru, India

The fifth China-South Asia Cooperation Forum (CSACF) is being held in China's Kunming in Yunnan province, coinciding with the eighth China-South Asia Expo between July 23-28, 2024. The CSACF is part of a 'minus-India Initiative' that aims to serve China's long-term interests and "grand designs", along with the 'One Belt and One Road (OBOR)' initiative. A similar initiative was proposed by Beijing in 2021, focusing on COVID-19 vaccines and poverty alleviation, which included Afghanistan, Bangladesh, Nepal, Pakistan, and Sri Lanka, but excluded India, the Maldives, and Bhutan.

Over the past 10 years, closer ties between China and South Asia have translated into trade volume doubling. 

The trade volume between China and South Asian countries reached 197.4 billion USD in 2023, with an average annual growth rate of 8.3 per cent, according to sources. Wang Liping, an official with the Ministry of Commerce, stated that China and South Asian countries account for one-fifth of the global economy.

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China in the Indian Ocean Region with dichotomy of 'aid'

In the maritime domain, China is already promoting the ‘China-Indian Ocean Region Forum,’ organised by the China International Development Cooperation Agency (CIDCA). Through this, Beijing is contending for influence in the strategic Indian Ocean region (IOR) with substantial investments in ports and infrastructure in several countries. 

However, there exists a dichotomy in the concept of ‘aid.’ While New Delhi’s assistance is more in terms of grants, lines of credit, and capacity building, Beijing’s ‘aid’ comes with Chinese characteristics, that is, it is always motivated by a desire to gain access to new markets and economic returns.

For instance, in Sri Lanka, the Chinese-built Hambantota maritime port was formally handed over to China on a 99-year lease in late 2017 because the Sri Lankan government could not afford to maintain it. China has increasingly enforced ownership as a condition when the recipient country cannot repay the loans, thereby compromising the country’s sovereignty. 

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Some analysts, especially in Africa, argue that many China-funded projects are not particularly beneficial for local people and are merely a way for China to access a country's market and resources.

A 2017 study by AidData recorded that the majority of Chinese foreign aid was not in the form of "traditional aid" — direct grants — but rather intended for commercial projects and loans that were required to be repaid with interest.

The omission of India from the China-Indian Ocean Region Forum has sparked debates about China’s intentions in the Indian Ocean Region (IOR). China has maintained a military presence in the IOR with regular deployments of naval warships to the Gulf of Aden since 2008, ostensibly for ‘anti-piracy operations.’ This presence took on a strategic dimension when Beijing opened its first foreign military base in Djibouti in 2017.

China’s growing involvement in the Indian Ocean and India’s exclusion from the China-Indian Ocean Region Forum raise questions about the evolving dynamics of the region and Beijing’s ambitions. In April 2024, China named five seabed features in the Indian Ocean after Chinese musical instruments, bringing the total number of undersea topographies it has named in the region to nine. China’s discomfort with the Indian Ocean being named after India has prompted it to challenge the ‘Indianness’ of the Indian Ocean region.

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In 2021, Chinese President Xi Jinping declared China a moderately prosperous society (Xiaokang) in all respects, thus claiming to have achieved the first centenary goal of the Chinese Communist Party. For China to further its economic growth, it is essential to have a harmonious neighbourhood and promote its ‘Peaceful Development’ and ‘Win-Win’ model theories. 

Hence, it is all the more important for Beijing to maintain a ‘peaceful periphery’ that supports its rise. 

This includes neutralising any of India’s regional strategies or joint cooperation initiatives, such as the QUAD.

By developing CSACF initiatives, China is cultivating economies bordering India and seeking to reduce India’s influence in these countries. These actions provide valid reasons for India to be concerned. 

Chinese engagement in South Asia amid India's 'neighbourhood first' approach

From Taliban-ruled Afghanistan to junta-ruled Myanmar, Beijing has emerged as a critical partner of the countries in India's neighbourhood. 

Most notably, a day before Nepal's former Prime Minister Pushpa Kumar Dahal 'Prachanda' lost his vote of confidence in Kathmandu, his Maoist Centre (MC) approved a railway project under China’s Belt and Road Initiative (BRI).

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These developments highlight the complexities for New Delhi in upholding its ‘Neighbourhood First Policy’ in the face of China’s engagements in the region through initiatives like CSACF as part of its South Asia strategy.

Given Beijing’s fast-track initiatives in its strategy towards South Asia, coupled with occasional diplomatic opacity from the PRC, India needs to be vigilant and develop a comprehensive counter-strategy to push back against Chinese influence in its neighbourhood.

(Disclaimer: The writer's views do not represent those of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.)