Growing Chinese Stature in Indian Ocean and Maldivian Politics

This article is written by Amal Sinha as a review to the assessment titled Growing Chinese Stature in Indian Ocean and Maldivian Politics by Dr Ritu Agarwal.


While China does want to dominate the world, I fail to see the link between being a contractor and banker for ports, creating demand and supply in the host countries, and naval activity. – Amal Sinha*


India faces yet another crisis in her neighborhood. The Maldives’ political turmoil has once again made China and India a contender in South Asian regional politics.

The Maldives has acquired new geo-strategic significance as China has shown its active involvement in the Indian Ocean region. There have been frequent reports of multiple deployments of Chinese submarines in the Indian Ocean. China has also developed many ports in countries like Pakistan, Bangladesh, and Sri Lanka. The geographical location of Maldives makes it strategically important for both China and India. The Maldives shares much closer geographical proximity to India, located just 340 km away from the Indian coast.

“While the individual facts stated are correct, port development and naval base development are two very different things. China has had a reputation for having a very thin line of difference between civilian and military institutions, but as of now, these are Chinese port construction companies which have constructed ports. This is a fair economic activity and does not automatically imply that China will have naval bases there. Submarine visits happened in Sri Lanka primarily because Mahinda Rajapaksa was extremely friendly to China, and needless to say is not a rational thinker.”

India has traditionally enjoyed stable political relations with the country, especially during the leadership of Maumoon Abdul Gayoom. The reports about China’s search for a new naval base in Southern Maldives made India cautious about China’s plan in her neighborhood. China wants to get access to the strategically relevant Indian Ocean region.

The present political leadership in the Maldives seems to be having more favorable equations with its Chinese counterparts than India. Though India has tried to revive bilateral political ties, there still exists a vast political difference between the two governments. China’s new maritime strategy to secure sea lanes in its favor to meet her oil and energy requirements has made it an active player in South Asia’s regional politics.

Countries in South Asia share common cultural and language affinities but possess diverging national interests which lead to contentious situations at times. It has become much more complicated since countries like China, Japan, and the U.S. renewed their interests in the region. The need for expansion of trade basket and domination over new sources of raw materials for economic and energy requirements turned South Asia into an arena of contestations for global politics. The main aspirant to change the geopolitics in its favor has been China, especially after it has increased its presence in multilateral institutions of global governance and emerged as a challenger to the US as a hegemonic power. The economic rise of China has created a new architecture of global trade and investment. The economic modernization of China and its commercial diplomacy have displayed the interdependence of Western economies vis-a-vis China.

“China is trying its best to challenge, even though it isn’t even remotely successful. China is having a tough time handling its own immediate challengers like Japan. In spite of all the efforts, they haven’t been able to control any naval zone. The South China Sea remains free for everybody. To rephrase the last statement, “The economic growth of China has created a heavy dependency of China on Western economies primarily because China is heavily dependent on the export of uncritical goods and does not hold any economic leverage on the West.” China may hold $1.7 trillion of US debt, but it is a tiny fraction of the $31 Trillion US securities market.”

China has stressed economic supremacy and strategic domination through attaining member of different international organizations in Asia as well.

“China does not hold economic supremacy or strategic domination on any major nation. It only attempts at bullying nations it buys commodities from, or are somehow desperate for capital.”

Over the last few years, China has systematically built up its sphere of economic influence in the region. China has provided concessional loans and financial aid to countries like Nepal, Bangladesh, and Sri Lanka. China has become a top trading partner of Bangladesh and also signed a free-trade agreement with Sri Lanka. Moreover, there have been high-level official visits between China and her South Asian neighbors.

“China is exporting out capital for multiple reasons, and not just to build up the economic sphere of influence. One reason it is doing that is that the Chinese economy gives little or negative returns. They utilize a head of state willing to make an unsustainable bet on building big projects without looking at the payback period. This has resulted in the deals with Nepal, Bangladesh, and Sri Lanka. Becoming a “trading partner” has no meaningful relevance. China is a predatory exporter and is heavily dependent on exports for value creation. It aggressively looks for markets everywhere. Pakistan signed a Free Trade Agreement with China and is now facing disastrous consequences in the form of a net $13B annual loss in forex reserves.”

China has also established strong ties with political elites ruling these countries. India, an important regional player in South Asia, is concerned about growing nature of ties between China and its neighbors. There has been a clear anti-India agenda articulated in these countries time and again. Historical and geopolitical factors play an important role in understanding these issues. Among all the South Asian countries, India is the most powerful country, both in economic and military terms. Most of these countries share their borders with India which provides the main transit route to them for connecting to the outside world. This includes the neighboring countries of Bangladesh, Pakistan, Nepal, and Bhutan. These nations are bound to be interdependent in matters of hydrological resources, energy, trade, security, and infrastructure development.

“Again, while some of the basic facts are right, generalizing all neighbors of India in one brush-stroke blur out the hard facts. For example, Nepal is heavily dependent on Indian ports for trade, and Chinese ports are financially unsustainable for it. And, South Asia is the least economically integrated region of the world. So, the interdependency in matters of trade is rather minimal. If we look at a case-by-case basis, we can get a clearer geopolitical picture.”

However, there are wider political differences which hinder the creation of a common platform to adopt regional integration for India and its South Asian neighborhood. Most of these countries have bilateral disputes with India over the issues of ethical insurgency, illegal migration, terrorism, water resources, border demarcation, and trafficking. They have also experienced political instability from time to time. Frequent changes in leadership and the ruling party bring out new power asymmetries within the region. These South Asian countries also have their security concerns regarding India’s position on ethnic insurgency and cross-border terrorism, which India has failed to address. The South Asian regional politics also grapples with frequent changes of political regimes, political regimes, leadership crises and economic backwardness.

“While such disputes do exist (not sure what ethical insurgency is, though), this not a major point of concern. Across the Asian and African continents, such disputes are common between countries. China’s disputes with its neighbors are far worse and utilized by the Communist Party for political returns. Also, regarding the list of things South Asian regional politics grapples with, the underlying institutional behavior has not been listed out. While interacting with a “country”, we are actually interacting with the individual institutions of that country, and the relationship depends on them. For example, Pakistan’s democratic institutions are extremely weak, and the military holds power. Nepal is more person dependent rather than institution dependent. After we look at the priorities of those individual institutions, we can possibly get a clearer picture.

Now, because most leaders in South Asia are looking for political mileage, large investments are a godsend for them. Which is why China managed to get these investments through. It still does not, in any way, express that one of these countries will become an anti-India state. For example, Bangladesh, under the Sheikh Hasina government, has been very co-operative with India.”

Domestic crises and political instability in the region have also made countries in the region more vulnerable to the pressures from economically powerful nations like China. Interestingly, China does not have a background of unfriendly diplomatic relations with countries in South Asia, except India. China’s intense desire to bring about this connectivity with its neighbors in Asia and particularly South Asia got reflected in its Belt and Road Strategy which intends to construct overland and maritime trade routes across Asian countries. The figures highlighting Asian connectivity were quite prominent during Xi Jinping’s visit to India in 2014. Jinping very much included the Maldives and Sri Lanka in his South Asian tour and discussed various bilateral projects with these countries. China also proposed to start a project of building a China-Maldives Friendship Bridge worth $210 million, mainly funded by Beijing. Gradually,  The Maldives became one of the most favorite destinations for Chinese tourists in 2014.

Under the grand initiative of Belt and Road, China has a clear plan of connecting to the Indian Ocean Region through Yunnan province in China and Myanmar. The official documents on Belt and Road have clearly indicated this in describing Yunnan as a radiating point connecting Asia and two oceans.

Asia here includes South Asia and Southeast Asia with the oceans being the Indian and Pacific Oceans. China’s strategy of making Yunnan a gateway in 2009 had a clear focus on promoting highways, railways, ports, waterways through this region and building channels of energy, gas, oil, trade, and information, connecting China to the outside world. The province was envisioned as an important passageway for all these transnational networks of economic and strategic routes. The special attraction of this package deal has been the promotion of the construction of an oil and gas pipeline between China and Myanmar through Kunming. China’s preferential policies towards border trade and the construction of border development zones along the Bangladesh-China-India and Myanmar corridor shows the economic need of integrating China to markets in South Asia through Yunnan. Though China has made a huge investment in overland infrastructure projects, it has its own limitations. In this regard, China’s Maritime Silk Road Project sought to extend wider shipping networks all across Asia.

China has already built port-related infrastructure projects in the countries ranging from Tanzania, Sri Lanka, Myanmar, Australia, and Israel. China wants to use maritime commerce and naval supremacy to spread its dominance over the world.

“While China does want to dominate the world, I fail to see the link between being a contractor and banker for ports, creating demand and supply in the host countries, and naval activity.”

The Chinese White Paper issued in 2015 clearly spelled out the official policies of putting maritime strategic objectives over land bound transnational linkages.

China wants to secure the key maritime locations for strategic and economic reasons. China’s defense spending has increased substantially over the last few decades. While the need for controlling the sea lines arise out of domestic requirements of increasing its export markets and building cheaper networks of transportation, but also includes China’s desire to dominate the supply chain for raw materials and oil which it needs to meet its ever-increasing energy demands. Thus, maritime infrastructure development is not only an economic requirement but also the strategic need of the country to project its naval capabilities.

In China’s drive for spreading its maritime domination through creating new naval bases in the seas, not in the immediate neighborhood, the countries in South Asia are going to be worst hit and will mainly be at the receiving end. China has provided huge loans and financial aid for constructing ports in countries like Pakistan, Sri Lanka and the Maldives and most of these countries are not able to repay these loans. According to statistics, Maldives’ owes over 70 percent of its current foreign debt to China. Even some of China’s infrastructure projects like the Hambantota port in Sri Lanka are not attracting enough business and, thus, the recipient countries are unable to repay the loan to China. Even the much debated China-Pakistan Economic Corridor (CPEC) is also going to make Islamabad fall into a huge debt of almost $90 billion. Most of these debt-ridden economies may sometimes have to follow demands and pressures from the Chinese government which may be inimical to their sovereign rights and economic growth. Given this situation, it is crucial for India to be a reliable partner in South Asian regional politics.


*Amal Sinha is a columnist on World Economics and its impact on Politics. His areas of interest include China, SE Asia, and the Middle East.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the view of The Kootneeti Team.

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The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of The Kootneeti Team

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Amal Sinha

Amal Sinha is a Consulting Editor at The Kootneeti on China and Geo-economics. His areas of interest include China, Pakistan, South East Asia, and the Middle East || Twitter: @amaleshwar

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