Introduction

In his 19th Party Congress speech in October 2017, Chinese President Xi

Jinping stated that “China will deepen relations with its neighbors in
accordance with the principle of amity, sincerity, mutual benefits, and
inclusiveness, and the policy of forging friendship and partnership with its
neighbors.”[1] As neighbours of China, South Asian countries—including
Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri
Lanka—have increasingly come into contact with Beijing in the diplomatic,
economic, and security domains. These interactions demonstrate that
China is not simply appealing to the better angels of South Asian
neighbours. Rather, Beijing has crafted a geostrategic approach to the
region that assiduously seeks to secure its own national interests. South
Asian countries, therefore, will have to deeply consider the long-term
implications of China’s growing presence and activities in their region.

This brief outlines the issues facing different South Asian countries with
respect to their relationships with China, and finds that across the board
Beijing pledges them support via the Belt and Road Initiative (BRI)—
Beijing’s massive infrastructure development and investment programme.
Deep suspicions rightfully persist over this economic component of
Chinese strategy in South Asia as it could support Beijing’s broader
geopolitical goals—namely the potential geostrategic encirclement of India.
Either way, in the political and security domains, Beijing wields a finely
tailored approach towards each country to achieve its national interests,
whether counterterrorism in Pakistan and Afghanistan, port access in Sri
Lanka and Bangladesh, or sowing distraction and confusion in its chief
regional rival, India. Overall, the one consistent theme appears to be that
China is hardly engaging South Asia for mutual benefit, but primarily, if not
exclusively, for its own.

Chinese words meet deeds in South Asia

India
Official Chinese commentary on India tends to stay cordial. For example, in
October 2019, Xi visited Indian Prime Minister Narendra Modi at Chennai
for the second informal summit between the two leaders, with the first
having been hosted by Xi at Wuhan in April 2018. Chinese press
statements at the time indicated that both Beijing and New Delhi plan to
continue the “Wuhan Spirit” of cooperation. Following the summit, Xi said:
“We must hold the rudder and steer the course of China-India relations,
map out a hundred-year plan for the relations from a strategic and long-
term perspective, inject a strong endogenous impetus into bilateral
relations, and work together to realize the great rejuvenation of our two
great civilizations.”[2] Despite the lofty rhetoric, however, Beijing has also
acknowledged that China and India continue to have deep policy
differences. In the official readout of the October Xi-Modi summit, for
instance, Beijing highlighted the need for both sides to “dispel suspicions
and doubts, and properly handle differences and sensitive issues.”[3]

Chief among India and China’s disputes is the lingering territorial

disagreement over Arunachal Pradesh and Aksai Chin. Indeed, at the time
of writing this brief, bilateral tensions over the few weeks prior have flared
once again—the second time in three years since the months-long Doklam
standoff in summer 2017[a]—along the Line of Actual Control (LAC) at
Galwan Valley and Pangong Tso Lake. Thus far, Beijing has accused the
Indian side of “blocking” Chinese troop movements and “attempting to
unilaterally change the status.”[4] However, the Chinese state-run Global
Times tamped down expectations of another Doklam, though it still
accused Indian forces of “illegal construction of defense facilities across the
border into Chinese territory.”[5] For the moment, it appears that both sides
have dug in and tensions along the LAC will persist in spite of Beijing’s
earlier public statements that it seeks enhanced bilateral communication to
avoid a repeat of Doklam.[6]

In general, Beijing has been outspoken on matters of concern at the

border.[7]India in October, for example, conducted a military exercise in
Arunachal Pradesh.[8] Known in China as “South Tibet,” this region is home
to the Tibetan holy site of Tawang and therefore is integral to resolving the
Dalai Lama dispute, which has roiled China-India relations for decades.
Beijing also protested an Indian exercise held in September in eastern
Ladakh—near Kashmir and bordering the disputed Aksai Chin.[9] To be
sure, Indian military improvements in patrols as well as infrastructure
development along the LAC have contributed to the current round of
tensions, but China has also refused to clarify its position on the LAC by
exchanging their maps. This suggests that Beijing is content with the
ambiguous status quo because it enables China to ramp up pressure on
India in disputed areas when deemed politically or geostrategically
advantageous to do so.

Beijing has also been frustrated with Modi’s decision in August to strip
Jammu and Kashmir of its special status and to deploy troops to the region.
The next month, in September, China voiced concerns about Jammu and
Kashmir at the United Nations on behalf of Pakistan, only to more recently
dial-back its approach to focus on resolving the issue through encouraging
India-Pakistan dialogue. For example, Chinese foreign ministry
spokesperson, Geng Shuang said, “We call on India and Pakistan to step
up dialogue on disputes including the Kashmir issue to enhance mutual
trust and improve relations. It serves the common interests of both India
and Pakistan and represents the shared expectation of regional countries
and the international community.”[10]

The crucial problem with Beijing’s overtures for India-Pakistan dialogue on

Kashmir is that China has traditionally been aligned with Pakistan against
India on nearly every major issue, breeding deep Indian distrust of Chinese
intentions. Indeed, Beijing’s “all-weather” partnership with Pakistan serves
as the primary constraint on improving China-India ties. By keeping
Pakistan relations, as the two sides always say, “higher than the mountains
and deeper than the oceans,” Beijing has a useful strategic counterweight
that distracts New Delhi. For example, New Delhi tends to worry
considerably about Chinese activities involving Pakistan, such as the
potential establishment of naval facilities at Gwadar and how it might one
day become linked with other Chinese ports or naval bases throughout the
Indian Ocean. This could, as many have discussed, constitute a “String of
Pearls” strategy of encirclement.[11] New Delhi further worries about the
geostrategic implications of Beijing’s BRI flagship initiative, the China-
Pakistan Economic Corridor (CPEC), which is a collection of infrastructure
projects traversing disputed territory between India and Pakistan.

Regarding BRI, India is one of China’s few neighbouring states that has
outright and publicly rejected participation, much to the chagrin of Chinese
leaders. Beijing seeks to gain economically from India’s involvement in BRI,
but New Delhi clearly harbours deep suspicions about how BRI could be
used against it. Specifically, India worries that BRI is too enticing for the
smaller and poorer South Asian countries to turn down, thereby opening
the door to India’s potential encirclement by countries participating in the
project. While BRI certainly seeks heightened economic interaction with
India’s neighbours, it remains debatable whether Beijing has a grand plan
of leveraging BRI for regional power projection purposes in the future. What
is clear, however, is that New Delhi feels uncomfortable with Chinese
attempts to secure port access agreements along the Indian Ocean in
places like Sri Lanka and Bangladesh, and New Delhi is probably watching
Myanmar closely as well. The bottom line is that India will not want to
relinquish its dominant position in the Indian Ocean.

Finally, China undoubtedly wants to prevent India from getting any closer to
the United States. Although Chinese military preparation for potential
contingencies against Taiwan or in the East or South China Seas
understandably receives much of the attention in the West, Chinese military
scholars have written extensively about the potential for a renewed border
war against India along the Himalayas.[12] In fact, armed conflict with India is
so prominent in Chinese military thinking that it is encapsulated in a
campaign called the “Joint Border Area Operations (边境地区联合作战)”—the only
known campaign of China’s five official campaigns that would not primarily
occur in the naval and air warfighting domains.[13]According to Ian Easton,
who has studied these campaigns closely, a war against Taiwan occurring
simultaneously with another one against India in the south would be a
“nightmare scenario” for Beijing.[14] Thus, India’s strengthening security ties
with the United States would be a worrisome development on China’s
western flank, where it already apparently feels vulnerable.

Pakistan
A month before participating in his summit with Modi in October 2019, Xi
met with Pakistani Prime Minister Imran Khan in Beijing. Xi’s acceptance of
the meeting just prior to his summit with Modi was clearly meant to
demonstrate Pakistan’s continued importance in Chinese decision-making
in South Asia within the strategic context of countering India. According to
the joint press release, China-Pakistan discussions were “marked by
traditional warmth, mutual understanding, and strategic trust” and each side
reaffirmed their commitment to supporting the core issues of the other.
[15]
While Beijing “reiterated solidarity with Pakistan in safeguarding its
territorial sovereignty, independence, and security,” Islamabad “reaffirmed
its commitment to the One China Policy” and the need to “uphold
international law and basic norms of non-interference in internal affairs of
other countries.”[16]

With pleasantries out of the way, Xi and Khan discussed Modi’s decision to
strip Kashmir of its special status and Beijing “reiterated that the Kashmir
issue is a dispute left from history, and should be properly and peacefully
resolved based on the UN Charter, relevant UNSC resolutions, and
bilateral agreements. China opposes any unilateral actions that complicate
the situation.”[17] Although Chinese statements on Kashmir tend to favour
Pakistan, they should not be viewed as directly supporting Islamabad’s
position. Significantly, Beijing decided against stating that Kashmir was part
of Pakistani territory and instead took a more balanced approach to the
South Asian rivals. This has been a theme over the years in India-Pakistan
disputes.

Another recent example occurred after Pakistan-based terrorists in

February 2019 attacked Pulwama district in Kashmir, prompting Indian air
strikes against Balakot town.[18] In response, Beijing noted, “A harmonious
relationship between the two [India and Pakistan] are crucial to regional
peace, stability, and development and serves the interests of India and
Pakistan fundamentally. We hope the two sides will exercise restraint and
take actions that will help stabilize [the] situation in the region and improve
bilateral relations instead of doing the opposite.”[19] China has been similarly
even-handed in the aftermath of the Uri terrorist attacks (2016), Mumbai
bombings (2008), and Kargil crisis (1999).[b]

Another major factor for Beijing in its relationship with Islamabad is counter-
terrorism. As indicated in their joint press statement after the Xi-Khan
meeting in September, “China appreciated Pakistan’s unrelenting efforts
and tremendous sacrifices in counter-terrorism.” Beijing also “supported
Pakistan in implementing its National Action Plan and called on the
international community to objectively recognize Pakistan’s contributions to
regional peace and security through its success in fight against
terrorism.” [20] China’s keen interest in counter-terrorism relates back to
concerns about potential Muslim separatist activities in its restive
northwestern province of Xinjiang.[21] Beijing certainly views Islamabad as a
critical ally in this fight as it is a neighbouring state and has an intricate
understanding of Islamist groups.

In addition, Pakistan rarely criticises China’s harsh treatment of Uighurs in

Xinjiang. Beijing reciprocates by protecting Islamabad in international
organisations. For instance, Beijing has wielded its veto power at the UN
Security Council multiple times to prevent the sanctioning of Masood
Azhar, the leader of a Pakistan-based militant group called Jaish-e-
Mohammed, until finally relenting last year.[22] As the rotational president of
the Financial Action Task Force, Beijing also likely played a key role in
2019 in helping Pakistan avoid sanctions for terrorism financing.[23]

China also holds up its partnership with Pakistan as an important

demonstration of benign intentions to develop the rest of the world through
BRI. Indeed, BRI’s flagship project, CPEC, runs through territory under de
facto Pakistani control, but disputed by India. Following Xi and Khan’s last
meeting, the two sides reaffirmed their commitment to CPEC, stating their
“determination to speedily execute CPEC so that its growth potential can
be fully realized making it a high-quality demonstration project of
BRI.”[24] This statement tracks with previous flowery assessments of CPEC,
such as in July when Beijing touted “the achievements of the CPEC, adding
that the CPEC cooperation is heading toward a new stage featuring
enrichment, expansion, and high-quality development.”[25] It should be
noted, however, that in spite of the positive statements made by each side,
CPEC has faced numerous challenges, such as deep concerns
surrounding how Pakistan is actually going to afford CPEC.[26]

On Afghanistan, Chinese leaders believe that Pakistan serves as a useful

partner to achieve security in order to eventually benefit from economic
development there. The joint statement following the Xi-Khan meeting in
September indicates that “the Chinese side appreciated Pakistan’s efforts
in promoting peace and reconciliation process in Afghanistan. Both sides
maintained that an inclusive, and Afghan-led and Afghan-owned peace
process would be key to bringing peace and stability in the country.”[27] Both
Beijing and Islamabad are part of the trilateral China-Pakistan-Afghanistan
foreign ministers dialogue which, according to the last Chinese readout in
September, produced “positive achievements in facilitating Afghan
domestic political reconciliation, enhancing regional connectivity, and
improving regional common development.”[28] China almost certainly
assesses Pakistan to be a valuable asset toward better understanding the
situation in Afghanistan and in communicating with different actors in the
country, to include the Taliban, who China believes must be a part of any
future government. Finally, the trilateral discussions also agreed to push
“forward under the BRI” and “to enhance connectivity by extending the
CPEC to Afghanistan.”[29]

Afghanistan
China seeks Afghan reconciliation, to include Taliban integration, in a future
government. Most recently in September, Beijing noted that Afghanistan
“should have broad representation and inclusiveness in order to make all
factions and ethnic groups equally involve[d] in the political life so as to
build a united political foundation.”[30] This has been a consistent Chinese
policy over the years.[31]

As noted earlier, Beijing further seeks to incorporate Afghanistan into BRI.

According to a readout of Xi’s meeting with Afghan President Mohammad
Ashraf Ghani in June 2019, Beijing seeks to “steadily promote practical
cooperation in economy and trade [via BRI].”[32] In April, Chinese Foreign
Minister Wang Yi reaffirmed Beijing’s interest in helping Afghanistan
through BRI, stating “China is willing to work with Afghanistan to deepen
joint construction of the Belt and Road and advance bilateral cooperation in
various fields in order to jointly benefit the two countries and peoples.”[33]

Like in its relationship with Pakistan, China looks to Afghanistan to support

counter-terrorism operations to prevent instability from spilling over into
bordering Xinjiang province. Xi has pledged to “continue to help
Afghanistan build its capacity in fighting terrorism and maintaining stability.”
Xi further “called on the Afghan side to continue to firmly support China in
its fight against the terrorist force of East Turkistan Islamic Movement.”[34] In
a trilateral context, China, Pakistan, and Afghanistan are working together
to share more intelligence related to counter-terrorism.[35]

Lastly, China probably views the continued stationing of US troops in

Afghanistan as foolhardy. According to a Chinese opinion piece from
February 2017, “the total expense of the mission is even higher than that of
reconstructing Europe after WWII. However, only 63 percent of
Afghanistan’s territory is under the control of the Afghan government, and
the area is plagued by rampant opium plant and corruption
problems.”[36] The editorial goes on to state that “the [U.S.] government is
unable to function without international aids. The U.S. seems to be
overwhelmed by its operation in Afghanistan.”[37] Given these conditions,
Beijing probably finds it strategically advantageous to have the US hobbled
by this conflict and less able to focus on countering China in the Indo-
Pacific.

Bangladesh, Bhutan, Maldives, Nepal, and Sri

Lanka
In July, Chinese Premier Li Keqiang met with Bangladeshi Prime Minister
Sheikh Hasina, and the two leaders focused much of their discussion on
the need for the economic development of Bangladesh via BRI funding.
[38]
According to the joint communique issued after the engagement, “the two
sides shared the view that the BRI offers a model of international
cooperation for all the participants and provides new opportunities for
regional connectivity and economic integration.”[39] It is possible that Beijing
seeks to leverage BRI development of a power hub at Payra to obtain port
access in the future.[40]

In addition to the focus on economic issues, China and Bangladesh

pledged to deepen defense cooperation, especially in the areas of “defense
industry and trade, training, equipment and technology, mutual visits of
navy ships, and the UN peacekeeping operations.” [41] The Chinese navy in
2016 made its first port visit (and again in 2017) to Chittagong, perhaps
signaling Beijing’s belief that the largest port in Bangladesh holds
geostrategic value.[42] China is also the largest arms supplier of the
Bangladeshi military, providing 71.8 percent of weapons from 2008 to
2018, suggesting that Beijing seeks to further ingratiate itself with Dhaka
through these sales.[43] A final important feature of Chinese statements on
Bangladesh is that Beijing will continue to look to Dhaka for counter-
terrorism cooperation as both “opposed terrorism in all its forms and
manifestations.”[44]

Bhutan does not have diplomatic relations with China, and so there is much
less interaction than with other South Asian countries. However, in the last
meeting held in February 2019 between visiting Chinese ambassador to
India, Luo Zhaohui, and Bhutanese Prime Minister Lotay Tshering, Beijing
emphasised the need to continue working together with Bhutan on
resolving the border issue.[45] This is likely in reference to the Doklam region
in which a China-India dispute occurred in 2017. Either way, the last round
of China-Bhutan border talks were held in 2016.[46]
China’s relationship with the Maldives is near-exclusively focused on
leveraging BRI to develop Maldives as well as to raise Chinese influence
there to counter India. Beijing’s preferred Maldivian President, Abdulla
Yameen Abdul Gayoom, was defeated in elections in 2018, and the current
leader, Ibrahim Mohamed Solih, is more amenable to India’s wishes.
Bilateral ties, however, remain positive, with Chinese Foreign Minister
Wang as recently as July 2019 noting his appreciation for continued
Maldivian support of BRI.[47] Beijing has touted the completion of the “China-
Maldives Friendship Bridge” as a tangible example of what positive bilateral
relations can create to benefit average Maldivians.[48]Indian and Western
suspicions persist, however, that Beijing plans to develop Maldives for
geostrategic purposes.

Following his visit to India in October, Chinese President Xi went directly to

Nepal in what was the first visit by a Chinese head of state in 23 years.
While on the ground, Xi signed 20 agreements through BRI to better enable
China to develop and connect with Nepal.[49] The two sides “will accelerate
the building of the Trans-Himalayan Multi-Dimensional Connectivity
Network through connectivity projects including ports, highways, railways,
aviation, and communications, and have announced the launch of a
feasibility study of the China-Nepal cross-border railway.”[50] Beijing was
further pleased to see Kathmandu acknowledge that “Tibet affairs are
China’s internal affairs, and the determination [of Nepal] on not allowing
any anti-China activities on its soil.”[51]

Finally, on Sri Lanka, the Chinese focus is mainly on developing the island
and likely currying influence there for future geostrategic aspirations.
During a meeting between Chinese Premier Li and Sri Lankan President
Maithripala Sirisena in May 2019, the two leaders expressed an interest in
progressing with BRI projects, consistent with the last joint statement
issued in 2016.[52] Western “debt-trap” concerns persist, however, and
rightfully so. In exchange for paying down Colombo’s BRI debt, the
Chinese got Sri Lanka in December 2017 to hand over Hambantota port on
a 99-year lease; Hambantota is geostrategically located on the Indian
Ocean, potentially bolstering Beijing’s String of Pearls.[53]

In response, Beijing has noted that debt-trap fears are “a false proposition
created by Western media with a direct attempt to obstruct the joint
development of China and other developing countries, including Sri
Lanka.”[54] Beijing has instead argued that “the Hambantota port was built for
the Sri Lankan government and its people” and has focused on
improvements to the port making it more commercially viable.[55] To
demonstrate that it has no malign intentions at Hambantota, Beijing has
floated the idea that third countries should invest in the port.[56]
 Conclusion
As detailed in this brief, Chinese interests in South Asia stretch far beyond
simply maintaining amicable relations in the region. Rather, China is
dissatisfied at the LAC with India and is trying to improve the situation to its
liking. Beijing is also frustrated with New Delhi’s persistent support of the
Dalai Lama and rejection of BRI. As a result, China seeks to undermine
India by aligning closely with archrival Pakistan.

India is already painfully aware of these realities, and since Modi came to
power in 2014, New Delhi has attempted to deter China while being cordial
and productive with it—most notably through the series of informal
leadership summits held between Xi and Modi at Wuhan (2018) and
Chennai (2019). However, as the recent border flare-up demonstrates,
Beijing does not simply appreciate New Delhi’s cooperation and dispense
with assertiveness in the bilateral relationship. Instead, China doubles
down, and that is likely to push India even closer to the US and other like-
minded democracies such as Australia and Japan—with all four countries
making up the Quadrilateral Security Dialogue or ‘Quad’. The Quad is
perhaps stronger today than it has ever been, and may be on the verge of
holding its first naval exercise.[57]

Beyond India, China further uses its long-standing and deep relationship
with Pakistan to insulate itself from terrorism and to establish a strategic
foothold in a future Afghanistan. Furthermore, Beijing leverages BRI in
nearly every country (except India)—potentially with geostrategic
implications, especially at ports throughout the Indian Ocean. Going
forward, all South Asian countries should be aware of what precisely
Beijing is attempting to achieve in their region, and the potential long-term
consequences.

CHINESE ENGAGEMENT IN SOUTH ASIA: THE STORY SO FAR

In recent years, the most powerful sources of

Chinese influence in the four South Asian
countries surveyed have been commercial and
financial.6 This is reflected in high-value project
finance and operations partnerships, not least
for the Hambantota and Colombo port projects
in Sri Lanka and the Padma Multipurpose Bridge
Project in Bangladesh. Without exception, the
governments of the four countries have
described China as a crucial development
partner, either as a funder or in providing
technological and logistical
support.7 Additionally, it is the biggest trading
partner in goods for Bangladesh and Sri Lanka,
and the second-largest for Nepal and Maldives.
Chinese investors have been the largest source
of foreign direct investment (FDI) pledges to
Nepal for six consecutive years till 2020–2021,
with more than half of the country’s total FDI in
the 2018–2019 fiscal year.8 However, the
economic element is increasingly intertwined
with political, government, and people-to-people
aspects of these relationships.
Chinese tourists have become an important
driver of growth for all four countries, with
active encouragement from the authorities in
China. For example, in 2019 before governments
shut down international travel in response to
COVID-19, the number of Chinese tourists in
Nepal increased by over 11 percent year-on-
year. They were no doubt encouraged by the
Chinese ambassador who released a
professionally shot set of photographs of herself
visiting the country’s tourist attractions.9 On the
other hand, in Maldives, leaders of the tourism
industry believe that a lack of government
backing in China stifled the flow of Chinese
tourists to the country, which has been open to
international travelers even amid the
coronavirus pandemic since mid-2020.10
Educational partnerships have expanded too.
Several Confucius Institutes have opened in
Bangladesh in quick succession. In Nepal,
multiple schools have made Chinese-language
courses compulsory after the Chinese
government offered to cover the salaries of the
teachers involved.11 In Bangladesh, journalists
have been awarded one-year, all-expenses-paid
fellowships to Chinese institutions, and multiple
newspapers have worked with the Chinese
embassy to coordinate roundtables on the
benefits of the BRI for the country.
The International Department of the Chinese
Communist Party (CCP) has assiduously built
alliances with political parties in the region. It
has organized virtual seminars and workshops
with members of the ruling parties in Nepal and
Sri Lanka to discuss the relationship and
avenues of cooperation between the parties.12 In
Bangladesh, the ruling Awami League signed a
memorandum of understanding (MoU) aimed at
enhancing cooperation with the CCP in the
presence of Prime Minister Sheikh Hasina, the
party president.13
The CCP has also mobilized another of its arms
in building influence in the region in recent
years. Several ambassadorial appointees to
South Asia have worked extensively in the
United Front Work Department (UFWD) of the
CCP, and not necessarily in the diplomatic corps.
The UFWD operates to influence political,
economic, and intellectual elites in other
countries; in the current context, that involves
forging a narrative that paints China as a key
player in the global order and a partner for the
future. Ambassador to Bangladesh Li Jiming and
former envoy to Sri Lanka Cheng Xueyuan trace
their careers back to the UFWD. Among others
in the region, Nong Rong, ambassador to
Pakistan is also known to have a background in
the department.
The pandemic has created opportunities for
China to work directly with the four countries in
new ways—on the provision of medical
equipment, biomedical expertise, and capital for
coronavirus-related needs.14 China supplied
testing kits, personal protection equipment, and
medical supplies to the four countries in 2020. It
extended a $500-million loan to Sri Lanka and
sent a team of experts to Bangladesh to treat
patients and train medical professionals. In 2021
it has supplied Sinopharm vaccines to the four
countries.15 With the crisis exposing
shortcomings in public healthcare capacities, it
is likely that in a post-COVID-19 world, when
South Asian countries talk about infrastructure,
they will mean hospitals and laboratories as
much as ports and highways. China will be eager
to step in. Its technological and scientific
collaborations, even if still inchoate, will offer
options through the Health Silk Road.16 A build-
out of telemedicine will require advanced 5G
technologies, opening opportunities for Chinese
companies, including its national telecoms
champion, Huawei.
These developments demonstrate that China’s
presence in South Asia is no longer
predominantly economic but involves a greater,
multidimensional effort to enhance its posture
and further its long-term strategic interests in
the region. But this increasing Chinese
engagement and influence will likely exacerbate
domestic divisions in all four states. It will create
stakeholders in close relations with China, which
has the potential to pit political and commercial
elites against each other. In the case of
countries with fragile institutions,
underdeveloped civil society, or elites
susceptible to capture, this may eventually
weaken the state itself. For now, however, in
most of the four states, China is still largely
viewed as a partner that can assist with
developmental needs—and it will not be easy for
the United States to contest this. Multiple
stakeholders from the region say that U.S.
interest in and engagement with smaller South
Asian countries is viewed locally as being
sporadic at best. China, on the other hand, is
perceived as a player with a plan. Moreover,
despite questions about and criticism of its
presence, Chinese actors have taken tangible
steps to build confidence in their resolve and
staying power.
BANGLADESH
The relationship between Bangladesh and China
took a few years to warm up, with the two
countries establishing diplomatic relations only
in 1976. However, by the time Bangladesh
signed on to the BRI during Chinese President Xi
Jinping’s visit to Dhaka in 2016, economic,
security, and geopolitical necessities had
ensured all-round engagement between them.
The largest number of infrastructure projects
developed with Chinese help in South Asia are in
Bangladesh. At the same time, the relationship
embraces elements of a strong security
partnership. According to a 2020 report by the
Stockholm International Peace Research
Institute, Bangladesh is China’s second-largest
buyer of military hardware globally, accounting
for almost one-fifth of the latter’s total exports
between 2016 and 2020. Chinese arms make up
over 70 percent of Bangladesh’s major arms
purchases.17 Between 2009 and 2011, this
included tanks, rescue vehicles, radars, ships,
missiles, and defense systems, costing
approximately $546 million.18 In 2016,
Bangladesh procured two diesel electric
submarines from China for $186 million.19
Bangladesh prefers to buy Chinese weapons as
they are cheaper than those of established arms-
exporting countries in the West or of Russia, and
also because China extends soft loans to make
these purchases.20 Security-related cooperation
extends to the police force. In 2018, the two
countries signed agreements on law-
enforcement training assistance and providing
arms and ammunition to the national
police.21 Beyond the technical benefits that
accrue to Bangladesh, this security relationship
—which is unique in a region that India
considers its direct sphere of influence—also
points at Dhaka’s dexterity in balancing its
relations with China and India.
This balancing act extends well beyond security.
China has been an ideal partner for Bangladesh
to expand its manufacturing base to cater to
diverse export markets, including the Chinese
one, and to overcome infrastructure gaps
through project finance and construction.
Economic engagement is primarily in trade,
infrastructure, and business-to-business
partnerships.
China is not among Bangladesh’s top ten export
partners,22 but it aims to remedy this with
policies and preferences to bolster the latter’s
export prospects. For instance, China has
allowed 97 percent of Bangladeshi goods duty-
free access to its domestic market since June
2020.23 More important, it is helping the country
to diversify its export base and move its industry
up the value chain.24 Bangladeshi entrepreneurs
can procure Chinese manufacturing machinery
at minimal interest and with substantial grace
periods.25 During Xi’s visit to Dhaka in 2016, the
two countries signed twenty-seven agreements
under which China would lend $24 billion to
Bangladesh for projects including coastal
disaster management and a road tunnel under
the Karnaphuli River, as well as help to
strengthen production capacity.26 China is also
directly setting up manufacturing industries in
Bangladesh, located in special economic zones
(SEZs) such as the Chinese Economic and
Industrial Zone-2 in Chittagong.27 Bangladeshi
companies have expressed a preference for joint
ventures with Chinese ones as, beyond
attracting investment and financing jobs, this
helps to facilitate the transfer of expertise and
technology.28 According to Bangladeshi
entrepreneurs, investment from China comes in
clusters, as an initial investment generally leads
to follow-on joint ventures, eventually
establishing an entire ecosystem.29
The energy sector has been the greatest
recipient of such investment, with Bangladeshi
companies establishing joint ventures with
Chinese counterparts. The 1,320-megawatt
Payra coal-powered plant, the largest power
plant in the country, which came online in 2020,
is brought up most often as an example of the
success of the model. It was developed by
Bangladesh China Power Company, which was
created as an equal-stakes joint venture between
China National Machinery Import and Export
Corporation and Bangladesh’s North-West
Power Generation Company.30 Apart from
electricity generation, the project is expected to
develop significant transportation operations
and infrastructure facilities on site, building
railroads and bridges, as well as developing and
increasing capacity of the Payra port.
Additionally, under a maintenance agreement
with the Chinese company, Bangladeshi workers
will be trained and technology to run the plant
will be transferred in the five years after the
start of operation.31 Beyond energy, China’s role
in Bangladesh’s cluster-based-industrialization
approach is visible in joint ventures set up for
various projects in Purbachal, the country’s first
“smart” city, which is being developed in the
outskirts of Dhaka, as well as for an industrial
zone in Chittagong for manufacturing firms and
associated industries.32
China has emerged as a key partner in
constructing and funding several infrastructure
projects in Bangladesh, such as the Padma
Multipurpose Bridge project, several
expressways, and power plants.33 As of January
2021, the government was implementing nine
crucial development projects, such as the
multilane road tunnel under the Karnaphuli
River, with Chinese loans and credits worth $7.1
billion.34 In 2018, the Dhaka Stock Exchange
enlisted the Shanghai and Shenzhen stock
exchanges as strategic partners to spur the
digital modernization of the trading system. The
Chinese exchanges are expected to help set up
platforms with information about listed
companies, to offer tools to analyze
performance, and to help increase network
security and provide digital surveillance
software.35
Reflecting a trend that has become an essential
component of Chinese engagement across the
region, the two countries regularly hold business
matchmaking exercises through trade bodies
such as the Bangladesh-China Chamber of
Commerce and Industry. China also exhibits a
degree of sophisticated coordination that
extends beyond these usual measures. Chinese
businesses, the embassy in Dhaka, and other
Chinese stakeholders appear to move in concert
when reaching out to their Bangladeshi
counterparts to gauge areas for new business
opportunities, which can then be followed by
informational seminars and offers of capital, all
to set the ball rolling on a rapid timeline of just a
few months from exploratory contact to
contract.36
Rising economic engagement has been
accompanied by heightened political
coordination. The CCP has been reaching out
and holding meetings with the ruling Awami
League and its principal opponent, the
Bangladesh National Party (BNP), since at least
2015.37 BNP Chairperson Khaleda Zia visited
China in 2016, meeting Xi who thanked the party
for actively helping develop China-Bangladesh
relations.38 Members of the two parties have also
visited China at the invitation of the CCP.39 In
2019, the Awami League signed an MoU with
the CCP to study ways in which the two parties
could learn from each other and collaborate.40
Although these elite and institutional
relationships have made rapid progress,
Bangladesh’s citizens generally still view China
as a blank slate. Beijing’s representatives have
tried to change this by partnering with think
tanks, business houses, and newspapers. In
2015, Ambassador Ma Mingqiang sought to
spread Chinese economic engagement in more
diverse regions of the country by promising to
help Bangladesh establish two SEZs at the cost
of $4.5 billion.41 These are currently under
development at Anawara, Chittagong, and
Gazaria, Munshiganj, which decentralizes the
Chinese presence. In 2018, at an event
organized by the Bangladeshi conglomerate
Cosmos Group, Ambassador Zuo Zhang detailed
Chinese efforts to resolve the Rohingya crisis, an
issue that is important not just to people in
eastern Bangladesh along the Myanmar border
but also at the national level.42
In recent years, China has launched multiple
initiatives to develop what it calls “soft
influence.”43 Friendship centers, cultural
programs, and engagements with think tanks,
newspapers, and local governments around the
country are China’s channels of choice. In 2015,
forty years of diplomatic relations were marked
with a three-day cultural program on facets of
Chinese life and society.44 That same year,
Beijing proposed to establish the Bangladesh-
China Friendship Exhibition Centre at a cost of
$80 million.45 However, as one local stakeholder
pointed out, it is China’s image as an economic
powerhouse that is most attractive to the public
—creating the impression of it as a “wealth
creator” in Bangladesh and not merely an actor
passing through the country temporarily.46
China has been using scholarships and
educational exchanges to reach out to
Bangladeshis, especially younger ones. It has
emerged as the preferred overseas destination
for Bangladeshi students. During Xi’s 2016 visit,
an MoU promising scholarships to 600 students
was signed.47 Beyond tie-ups with local
universities, where it has opened Confucius
Institutes, Beijing has offered Bangladeshi
students summer courses in China and visits to
the Confucius Institute head office.48 Chinese
businesses have also been roped into such
outreach programs. China Harbour Engineering
Company Limited (CHEC), a Chinese state-
owned enterprise (SOE) with an extensive
presence across South Asia, has provided
scholarships, new facilities, and school supplies
to high-school students near one of its worksites
in Chittagong.49
Public health was an area of cooperation even
before the COVID-19 pandemic. A Chinese naval
hospital ship made a port visit at Chittagong in
2013, where it provided medical services.50 In
2015, China provided equipment amounting to
$4.1 million to the Health and Family Planning
Ministry.51 Since the beginning of the pandemic,
it has been helping government as well as
private entities with testing kits, protective suits,
and other equipment.52 A team of medical
experts was sent to Bangladesh in June 2020 to
assist in managing pandemic response and
mitigation measures.53 Help has been
forthcoming from the Chinese private sector too
—Alibaba, for instance, sent testing kits and
masks to Bangladesh in April 2020.54 The China-
backed Asian Infrastructure Investment Bank
has so far approved $350 million in loans to
Bangladesh to fight the pandemic.55 The vaccine
relationship between the two countries hit a
speed bump over co-funding of clinical trials of
the Chinese Sinovac vaccine in 2020,56 but that
seems to have been forgotten now, with Beijing
gifting 1.1 million doses of Sinopharm vaccine in
two tranches.57 Bangladesh is now reportedly
exploring the possibility of co-producing Sinovac
in the country, which would align with China’s
growing image as a country that is producing
wealth and helping Bangladesh move its industry
into new areas higher up the value chain.58
Despite all of this rapidly growing engagement,
there are elements of Bangladesh’s approach to
China that have run into problems. The
Rohingya conflict in Myanmar, which has led to
an inflow of refugees in Bangladesh after
sectarian conflict between Rohingya Muslims
and Rakhine Buddhist communities, has been a
cause of great concern for Dhaka. It views China
as capable of exerting influence on Myanmar,
and the two sides have discussed the issue at the
highest levels when Sun Guoxiang, special envoy
for Asian affairs from the Chinese Foreign
Ministry, met Bangladesh’s foreign minister in
April 2017.59 China has tried to mitigate any
negative Bangladeshi reaction to its stance by
providing Rohingya-related aid on multiple
occasions. For example, in June 2019 the two
sides exchanged letters on providing rice aid to
the refugees.60 However, Bangladesh believes
geopolitics has come in the way of China doing
more to resolve the issue despite promises.61
NEPAL
Nepal is unique among the four countries
studied because it borders the Tibet Autonomous
Region (TAR), and the fact that the Nepali
people have been tied to Tibetans through bonds
of trade, culture, and family for centuries.
Beijing has been keen to leverage its
relationship with Kathmandu to aid its own
objectives in Tibet and with Tibetan diaspora
communities that have left over the decades.
Ahead of the Beijing Olympics in 2008, protests
that broke out in the TAR were mirrored in
protests in Nepal, which has a significant
Tibetan refugee population. One Nepali
stakeholder confirmed that Beijing was unhappy
with the daily protests organized by the Tibetan
community in Nepal at the time.62 Since then, it
has pressured Kathmandu into significantly
reducing the number of movement passes issued
to Tibetan refugees. When Xi visited the country
in 2019—the first Chinese leader in two decades
to do so—a mutual legal aid treaty, agreements
on border management, and even an extradition
treaty were discussed.63
The most recent inflection point in Nepal’s
relationship with China was in 2015 when India
implemented an unofficial, months-long
economic blockade to express its displeasure
over citizenship provisions in the country’s new
constitution. This led to a critical fuel shortage
and choked relief material arriving in response
to the debilitating earthquake earlier in the year.
Most critically, the blockade reinforced the
dangers of dependence on one dominant market
and infrastructure link, cementing the sense
among Nepal’s elites that the country would
need to cultivate China to increase its
options.64 This led the two countries toward a
comprehensive transit and transportation
agreement that came into effect in February
2020. Apart from sending a political signal to
India, the agreement enabled landlocked Nepal,
at least in theory, to end its sole dependence on
India for goods and trade by giving it access to
Chinese ports.65 While the economic viability of
Chinese facilities as an alternative to Indian
ports for the transshipment of goods to and from
Nepal has been questioned, the agreement also
marked the beginning of a period of greater
political closeness between the CCP and Nepali
leaders, then led by prime minister K.P. Sharma
Oli from the Communist Party of Nepal-Unified
Marxist Leninist (CPN-UML).
The two parties have coordinated closely on
political and ideological issues. This has included
high-level meetings such as one between Oli and
the chairperson of Chinese People’s Political
Consultative Conference, Yu Zhengsheng, in
2016.66 Symposiums, such as one on “Xi Jinping
Thought” in September 2019, are regularly
organized by the CPN-UML and attended by
high profile Nepali and Chinese leaders. The
CCP regularly funds visits for members of
political parties across the spectrum, from
leaders to grassroots-level cadres.67 In May 2021,
in a meeting attended by representatives of
major Nepali political parties, the International
Department of the CCP Central Committee
proposed providing COVID-19 assistance
through political parties in the country.68
China clearly accords considerable significance
to having an ideologically aligned counterpart in
Nepal’s power structure, and its current
ambassador, Hou Yanqi, has been especially
active in the country’s party politics. As rifts
within the CPN-UML surfaced in early 2020,
Hou met with top party leaders and urged them
to stay united.69 Near the end of the year, as the
party finally split, a team led by the vice minister
of the International Department of the CCP, Guo
Yezhou, met with President Bidya Devi Bhandari
and CPN-UML leaders to bolster the
ambassador’s attempts to avert the political
crisis and forestall the party split.70
Increasing cooperation between Nepal and
China in multiple areas is not just the product of
ideological affinity between the communist
parties of the two countries. It is also influenced
by the reality of public support for the
relationship in the post-blockade period and the
elevation of China as a viable development
partner, especially after Nepal signed onto the
BRI in 2017. There has been growing admiration
for China’s growth story and talk of China as a
model of political and economic governance. The
two countries have signed several agreements
on legal issues including boundary management,
mutual legal assistance in criminal matters, and
cooperation at the attorney general level.
Infrastructure features heavily in the
relationship. Even as ratification of the country’s
compact with the U.S. Millennium Challenge
Corporation’s (MCC) has run into trouble in
parliament,71 Nepal has sought Chinese aid for
major projects such as the Pokhara International
Regional Airport, a cross-border optical fiber
link, and the upper Marsyangdi Hydropower
Station. The Kerung-Kathmandu cross-border
railway project is one of the most crucial ones
underway. When completed, it is expected to
facilitate Nepal’s connectivity with the rest of
the world through China’s road network. As Hari
Prasad Bashyal, the consul general of Nepal in
Lhasa, noted in 2014, “The expansion of railway
networks will help develop trade, business, and
tourism along with building relations at the
(people-to-people) level between the two
countries. The Chinese have shared that they
have been considering our request to expand the
railway networks to Nepal.”72
As in Bangladesh, China has facilitated
technology transfer to Nepal, creating the
perception and reality of aiding wealth creation
and expanding employment. Emblematic of this
is the rising number of joint ventures such as
Hongshi Shivam Cements—a combined
investment of $333.6 million into a cement
factory that aims to produce 12,000 tons of
cement daily and employ 2,000 Nepali
workers.73 Trade relations have deepened in the
past decade, with China accounting for 15.2
percent of Nepal’s imports as of 2019, up from
11.1 percent in 2012.74
Military ties and security exchanges with Nepal
have been among China’s weakest in the region.
However, new initiatives have been announced
since 2017, including the annual joint military
exercise Sagarmatha Friendship. Under a Joint
Command Mechanism Agreement, the two
countries have discussed joint patrolling of the
border.75 During Xi’s 2019 visit, they also
exchanged letters on providing border security
equipment to Nepal.76
The COVID-19 pandemic has allowed China to
advance its vision of a Health Silk Road in
Nepal. By March 2020, Kathmandu had signed
up to the “Chinese model against COVID-19” and
started working with China on best practices to
handle the pandemic, using Chinese testing kits
and other equipment.77 In recent months, China
has provided 1.6 million doses of the Sinopharm
vaccine to Nepal, in addition to 1,500 oxygen
cylinders as a grant.78 Nepal has also worked
with China to promote traditional medicine,
sending doctors to collaborate with Chinese
practitioners.79 During Xi’s 2019 visit, the two
countries agreed to cooperate in setting up a
plant to produce Ayurvedic medicine in Nepal.80
China is also intent on public outreach. Thirty
Chinese NGOs have been operating in Nepal
under a framework agreement signed between
the Social Welfare Council of Nepal and the
China NGO Network for International Exchanges
in 2018. Since 2017, Beijing has made offering
Mandarin courses more attractive for schools by
bearing the cost of employing teachers. Nepal’s
premier higher-education institution, Tribhuvan
University, among others, has signed
agreements to establish Confucius
Institutes.81 India has been the traditional
destination of choice for Nepali students looking
for higher education opportunities abroad, but
China, through financial aid and scholarships,
has increasingly made itself the destination of
choice for those looking for technical skills and
graduate degrees, in particular.82 For instance, in
April 2015, China announced 1,500 scholarships
for five years to facilitate the production of
skilled human resources in Nepal.83 An estimated
6,400 Nepali students were studying in China by
2019.84 This has led to a steady infusion of
technocrats and experts trained in China within
the Nepali establishment, perhaps setting the
pattern for a generation.85
Media cooperation and coordination of content
has been increasing steadily too. Teams of
journalists from both countries regularly visit
each other for knowledge sharing and
consultations.86 As far back as 2014, a team of
Chinese journalists visited Nepal and was
briefed by representatives of the Kantipur Media
Group, one of the largest media companies in
the country. China Radio International runs
special Nepali programs as well as Chinese-
language classes.87
China has used visits and consultations to
expand institutional partnerships, such as one
led by the Chinese Institute of Contemporary
International Relations (CICIR), a think tank
under the Ministry of State Security, just ahead
of Foreign Minister Wang Yi’s visit in 2014.88 In
2016, a CICIR delegation met political leaders
across the spectrum including then prime
minister Pushpa Kamal Dahal, the former Maoist
guerilla leader; CPN-UML Chairperson and
former prime minister K.P. Sharma Oli; and
Nepali Congress Chairperson Sher Bahadur
Deuba, who is now serving his fifth term as
Nepal’s prime minister, in preparation for Xi
Jinping’s visit later that year.89 A widely read
newspaper surmised that “China is monitoring
Nepal’s political developments, activities of
political parties, and international relations
through its ‘think tanks.’”90
China has also leveraged environmental
cooperation and humanitarian assistance and
disaster relief (HADR) to enhance its relations
with Nepal for some years. It sent a rescue team
within 24 hours of the devastating April 2015
earthquake.91 It followed this up with geologists
and seismologists to assess long-term
measures.92 The show of solidarity reached its
highest level with Foreign Minister Wang Yi
visiting people displaced by the earthquake
during an official visit.93 Beyond funds and
human resources, China has directly
participated in reconstruction; for example, by
rebuilding the Durbar High School in
Kathmandu, which it handed over in September
2020. The two countries also signed an
agreement in 2018 under which China would
provide HADR equipment to Nepal and help it
establish an earthquake-monitoring project.94
SRI LANKA
Sri Lanka has been a flagship of Chinese
economic engagement in South Asia since well
before the introduction of the BRI in 2013. This
has gradually expanded with direct investments
and state-backed policy loans.95 The country
features prominently in widespread narratives
about China’s “debt-trap diplomacy,” with
references to mega-projects such as the
Hambantota Port and Colombo Port City project
(also known as CHEC Port City) usually
headliners. Colombo Port City is the largest
foreign direct investment in Sri Lanka to date at
$1.4 billion, and it promises to create 100,000
permanent jobs once completed.96 But the
relationship with China is much more layered
and diverse than this narrative suggests, with
Sri Lanka exercising agency and intent.
The economic relationship has been highly
personalized and tied significantly to China
cultivating a relationship with the Rajapaksa
family that was in power from 2005 to 2015 and
has been again since 2019, this time with
brothers Gotabaya and Mahinda serving as
president and prime minister respectively.
Throughout this period, questions have arisen
about the viability of projects and about
impropriety.97 But none of this has dislodged a
relationship built on a foundation of political and
strategic necessity. For Sri Lankans of diverse
political stripes, China has been a useful ally—
but this was especially true of the Rajapaksas,
since many in the international community
wanted to hold them accountable for human-
rights violations committed during the civil war
with the Liberation Tigers of Tamil Eelam
(LTTE), and especially in the conflict’s final
phase in 2008 when Mahinda was serving as the
country’s president.98 For China, the country has
offered a friendly stepping stone from which to
expand its presence in South Asia; it also
represents a potential strategic asset sitting
astride sea lanes, through which China’s energy
supplies from the Middle East pass.99
China has thus not reached out to just the
Rajapaksas. When their bitter opponent,
Maithripala Sirisena, defeated Mahinda
Rajapaksa for the presidency in 2015, Beijing
quickly welcomed a delegation of ministers from
his new government.100 In time, Sirisena’s
government approved Rajapaksa’s China-funded
projects that it had criticized and initially
paused.101 In a message to Xi in 2017, Sirisena
endorsed the BRI, expressing hope that it would
usher in a new era of bilateral ties.102 China
continues to emphasize that, irrespective of the
political color of the government in Colombo, it
views itself as a friend of Sri Lanka. Most
recently, this has been reflected in the way that
the Chinese embassy named and thanked parties
and leaders individually for attending a
commemorative event to celebrate the
centennial of the CCP.103
The most significant decision concerning
Chinese engagement in the country since the
return of the Rajapaksas to power has involved
passing a bill approving the CHEC Port City in
May 2021. This was done just days after the
Supreme Court pointed out that sections of the
bill were inconsistent with the country’s
constitution and required a popular
referendum.104 Soon after the bill was passed,
ministers released statements assuaging
concerns about the port city being granted
extra-constitutional status and highlighting
investment opportunities that the project would
bring to the country.105
China’s importance as a lender, investor, trader,
builder, and partner is in part guided by Sri
Lanka’s own economic progress that helped it
graduate to lower-middle-income status in 2017,
effectively disqualifying the country from much
of the concessional assistance from the Asian
Development Bank (ADB) and the World
Bank.106 Because of this, Sri Lanka has felt
compelled to diversify its sources of capital,
turning substantially toward international bond
markets. The share of Chinese loans, while
growing, is still less than 15 percent of external
debt.107 But the trajectory is clear: in 2019, $684
million out of a total of $1.1 billion in bilateral
loans was from China. By comparison, Japan
accounted for $178 million in loans and $9.4
million in grants.108 In 2020, loans fell to $720
million with China accounting for $324 million
and Japan $161 million.109
Experts say that Sri Lanka needs to improve its
debt management overall, not only with regard
to China.110 However, for the time being, Beijing
is a useful source of funding and its role as a
capital provider is widely accepted. Part of the
reason is that China has sold the story of its own
success. Sri Lankan stakeholders note how
government employees on visits to the country
were extremely impressed by its economic
progress and particularly taken by the message
that, if China as a developing nation with its own
history of a “century of humiliation” by outsiders
could achieve this degree of prosperity, so could
Sri Lanka as a postcolonial
country.111 Additionally, in the popular
imagination, China is seen as a consistent
partner and not a fair-weather friend. Beijing’s
decision to continue to develop projects in the
country despite negative publicity over ones
such as the Hambantota Port has strengthened
this sentiment.112
A strategy of long-term commitment is evident
when one looks at China’s outreach to the
general public in Sri Lanka, which is motivated
by the reasoning that the Rajapaksas will not be
around forever.113 In recent years, it has started
coordinating events and funding people-to-
people organizations such as the Sri Lanka-
China Friendship Association and the Sri Lanka-
China Youth Friendship Association. Sri Lanka is
increasingly popular with Chinese tourists, who
accounted for a peak of 13.2 percent of all
foreign tourists in 2016, up from 1.8 percent in
2010, before falling back to 8.8 percent in
2019.114 To capitalize on the two countries’
common Buddhist heritage, China has cultivated
the majority Buddhist religious constituency,
establishing the Sri Lanka-China Buddhist
Friendship Association in 2015 and funding a
Buddhist television station.115
China invites Sri Lankan journalists, academics,
and policy professionals to the country, and it
coordinates with them through platforms such as
the Sri Lanka-China Journalists’
Forum.116 Academic institutes and think tanks
affiliated with the CCP have ties with research
institutes considered close to the
Rajapaksas.117 One local stakeholder pointed out
the persistence in extending invitations to visit
China, “overwhelming” Sri Lankans to the point
where they would agree to attend.118
These efforts have successfully created a
reservoir of goodwill among the public, which
looks at the United States and India through a
more cynical lens.119 Some stakeholders said that
the current impression in Sri Lanka is that
pandemic-related assistance from the United
States is conditioned on reducing the scope and
intensity of ties to China—which makes the
option of accessing U.S. vaccines less attractive
on policy and strategic grounds, whatever its
appeal may be on public-health grounds.120 The
skepticism extends beyond responses to the
pandemic, making Sri Lanka wary of motives
behind any kind of aid from the United States.
Meanwhile, Beijing has taken advantage of this
vacuum in the relationship by identifying
Colombo’s other immediate needs and extending
a $500-million loan to ease the strain on the
country’s foreign reserves in March 2020,
followed by another $500 million in April
2021.121 The two countries also signed a $1.5
billion currency swap deal this year.122 China has
also plowed ahead with vaccine and medical
assistance: after providing testing kits and
medical equipment in 2020, it has supplied 1.1
million doses of the Sinopharm vaccine to the
country.123
UNPACKIN