Opinion: China challenge in South Asia
The only way India can deal with the Dragon is to remain active in South Asia
By Dhananjay Tripathi
Hyderabad: Conventionally, India is seen as a significant power in South Asia due to its geographical stretch, demographic strength and strategic depth. Along with these well-known factors, India is also looked at by others as the biggest democracy in the world, where a multi-party electoral system survived when it failed in many other developing countries of the world.
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Moreover, India’s economic growth and development have been praised by the international community. A post-colonial country that had witnessed a violent partition immediately after its independence undoubtedly travelled a long way to come to the present position. Despite several political contestations to India in the region, a section always looks at it as an example.
Thus, in all respects, logically, India is a South Asian power. Still, there are criticisms, and a group of South Asian strategic thinkers keep terming India as a regional hegemon. There are allegations that India keeps intervening in the neighbours’ domestic affairs to promote its interest. Therefore, several political leaders in different South Asian countries keep adding to the anti-India sentiments. While there was no match for Indian power in the region, South Asian countries, taking a cue from Pakistan, started approaching China.
China’s Economic Strength
China, discarding its socialist economic system, opted for economic openness in 1979. China was regarded as a slow and controlled economy, but after opening up to international investors, it surprised the world with its growth graph. China started registering an impressive growth rate, and for five consecutive years, from 2003-2007, the GDP growth rate of China was in double digits. In 2007, it reached 14%. By continuously maintaining its economic trajectory, China took 800 million people out of poverty. Although recently the Chinese economy has contracted, and in 2022 its GDP growth rate was around 3%, after relaxing the zero-Covid policy, it may go up to 5% in 2023 and can reach 7% in 2025.
China is at present the world’s second-largest economy, with a size of around $18 trillion and is just behind the United States of America (USA).
Comparatively, the Indian economy is number five globally, with a total nominal GDP value of around $3 trillion. In simple terms, the Chinese economy is comfortably ahead of India. With a strong economy, China is politically motivated to expand its influence in different regions of the world.
Footprint in South Asia
China’s strong economic presence in South Asia includes robust trade linkage with India. Interestingly, India-China trade is more than $100 billion, and the figures remained unaffected despite the recent border dispute between the two sides. The current figure is somewhat around $115 billion, and this trade favours China. India had a trade surplus with its largest trading partner ie, the US, but had a trade deficit of nearly $73 billion with China in 2021-22. Apart from India, China heavily invests in all South Asian countries.
According to the foreign affair committee of the Republican Party of the US, “the PRC has signed over USD 100 billion in investments on contracts in South Asia”. This $100 billion investment (some organisations are putting it around $150 billion) is part of the Belt and Road Initiative (BRI).
Here are some other figures to give us an idea of where China stands in South Asia regarding its economic footprint. In the Maldives, China has an investment of more than $1 billion, which is nearly half of the Maldivian GDP; in Sri Lanka, the number is around $11 billion; in Pakistan, it is more than $60 billion (part of BRI), while the China-Bangladesh trade figures are approximately at $25 billion.
Except for India and Bhutan, China has no political dispute with any other South Asian country. Even with Bhutan, China is now negotiating boundary issues and, in 2021, signed an agreement – a three-step roadmap for expediting the Bhutan-China Boundary Negotiations. It is believed that China and Bhutan have been close to making some decisions on the boundary dispute that includes Doklam. Not only this, China is also a major supplier of military hardware to many South Asian countries like Pakistan, Bangladesh and Nepal. Needless to say, Chinese ties with Pakistan have been a challenge for India’s foreign policy for quite a long time.
India: Policy Vision for SA
While India is not a small power, the point is that, compared with China, it needs to be in a position to make a formidable economic intervention in the region. Over the years, India is consistently making an effort to get involved in the region, like responding early to help Sri Lanka amid the financial crisis and reaching out to the people of Afghanistan even after the coming of the Taliban regime. India is supporting the Maldives and trying to improve its relations with Bangladesh.
While these steps from India’s side require applause, there remains confusion on South Asia in the Indian foreign policy circle. Even policy analysts and academics in India keep targeting South Asia at different times. There is a push for other regional groupings like BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), but how it can replace South Asia is an unanswered question.
China is making it difficult for India in the region, and the only way to deal with it is to remain active in South Asia. South Asian countries equally want Indian strong presence to keep a balance between the two giants. China is a challenge; dealing with it upfront will make India a global power.
