Merry-go-round in South Asia

China, Geopolitics, and the Global South

Uwe Hoering, April 5, 2022

In the last week of March, China’s Foreign Minister Wang Yi was on a whirlwind tour in South Asia, where the relations of several countries with Beijing, and thus the geopolitical constellations, seem to be shifting. After talks in Pakistan, where a serious political crisis is darkening the future of a Belt&Road flagship, the China Pakistan Economic Corridor CPEC, and a fly-by in Kabul, which has already been interpreted as a first step towards recognising the Taliban government, he made a visit to Nepal after a sensational detour into India.

Trouble in Kathmandu

One reason for Wang Yi’s visit to Nepal was probably that the government had conceded in the last minute before a US ultimatum expired at the end of February and agreed to a $500 million grant from the US Millennium Challenge Corporation for infrastructure projects. Since the MCC is seen as an instrument for imposing neoliberal policies in the Global South and the gift had been labelled as a contribution to curbing Beijing’s influence in the region, the approval was hotly contested for years. There was also criticism from China, which has steadily increased its own influence in Nepal. So Beijing was ‘not amused’ by the final acceptance. The high-level visit was therefore primarily a diplomatic manifestation: Signing of nine agreements and considerations for the further expansion of the New Silk Roads through railway lines and high-voltage power lines underlined Beijing’s continuing support for Nepal.

A sneak visit to Delhi

Wang Yi had also invited himself to Delhi at short notice, a request for a visit that, like its acceptance by the Indian government, caused widespread surprise. The visit itself was apparently somehow clandestine, “there were no senior officials or fanfare to greet him”, writes the South China Morning Post. There was also no meeting with Prime Minister Narendra Modi, only talks with Wang Yi’s political counterpart and the government’s security advisor.

Military tensions at the disputed border sections in the Himalayas continue to stand in the way of friendly relations between the two countries. But the Ukraine crisis may have awakened a mutual interest in rapprochement, as some observers suggest. India’s abstention on the UN resolution condemning Russia’s invasion and “similar positions” on the Ukraine crisis, which several Chinese publications highlight, have been carefully noted. Some commentators also see a widening gap between Washington and Delhi on ‘global norms and values’. Against this background, it is believed that Wang Yi wanted to explore whether India would participate in the planned summit of the emerging economies of Brazil, Russia, India, China and South Africa (BRICS) later this year in China. Wang’s emphasis on a ‘multipolar world order’, which was probably intended to ease fears of China’s ambitions for a ‘unipolar’ position in Asia, was a corresponding message to the Indian partner, who is worried about its status as a regional hegemonic power.

For the time being, the actual results of the surprise visit are obscured behind the diplomatic smokescreen. The magazine India Today stays suspicious of Beijing’s “strategic culture based on deception”. And the border conflict remains a serious obstacle to a more relaxed relationship. But the visit itself is highly significant, says Indian China expert BR Deepak, and a “glimmer of hope for China-India ties”.

A helping hand for Colombo

Sri Lanka at the Southern tip of the subcontinent, which is currently on the brink of national bankruptcy, is also an important battleground in the competition between the heavyweights in the region. In this year alone, loan payments amounting to seven billion US dollars are due. In view of the growing protests due to massive energy problems and shortages in the supply of food, the government has declared a state of emergency in the meantime. The country’s crisis, which has been simmering for years and has been exacerbated by high public debts, the Corona crisis and the collapse of tourism, has now gone completely off the rails under the ultra-nationalist rule of the Rajapaksa clan since its election victory in 2019.

During his tenure as president 2005 to 2015, the current prime minister Mahinda Rajapaksa laid the foundations for the current crisis. With Beijing, expensive prestigious projects such as the Colombo Port City, the Matalla Rajapaksa airport and the Hambantota port were built, adding significantly to the debt burden. China’s massive build-up at this important hub on the Maritime Silk Road naturally angered its Northern neighbour India, who saw its standing on the strategically located island in the Indian Ocean and its own claim to regional supremacy dwindling.

In Sri Lanka, too, the offer of a $480 million MCC grant caused political controversy and was rejected last year. It was considered to be part of US strategic plans for the Indian Ocean and would jeopardise Sri Lanka’s national sovereignty and security, according to President Gotabaya Rajapaksa, brother of the prime minister. Meanwhile, the government, much like Nepal, is trying to play the hegemonic gamecocks off against each other and solicit funding from all sides. On the one hand, it is hand-wringingly seeking help from Beijing, which seems ready to provide massive credit support, on the other hand, it is also approaching India, which is offering prospects of substantial financial aid as well. And Finance Minister Basil Rajapaksa will travell to the USA later this month to seek support from the International Monetary Fund in Washington for a bailout which, as experience shows, will require deep economic reforms and drastic austerity measures.

With Wang Yi’s whirlwind tour, Chinese foreign policy once again signalled how important the region is, not only regionally, but also to counter the growing presence of the US and its Western allies in the Indian Ocean.

Translated with (free version)

Uwe Hoering, Merry-go-round in South Asia. China, Geopolitics, and the Global South. April 5, 2022

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