China has undertaken more projects in SouthAsian countries than anywhere else in the world. Even India figures prominently in terms of the number of projects China has aided between 2000-2017.
Rahul Karan
China’s development aid and assistance in SouthAsia between 2000-2017 has been a multifaceted story. It is distributed across multiple sectors of the domestic economies across SouthAsian countries.
SouthAsia is an important region for China’s diplomatic activity, given especially the gradual expansion of Beijing’s footprint in the region since 2000.
These engagements are the substance of Beijing’s relationship with countries in SouthAsia, allowing China to cultivate goodwill and enhance its image as a viable development partner. The scale of Chinese development finance in SouthAsia highlights the economic potential of the region and its strategic importance to China. Beijing’s ‘development-diplomacy’ reveals a pattern of close engagement between institutions and elites in China and the recipient countries.
As study of data from the Aid Data project reveals, SouthAsia occupies a significant place in China’s development engagements between 2000 and 2017. During this period, China’s diplomacy in SouthAsia took the form of loans, aid and development projects extended to recipient governments.
The dataset reveals that China initiated over 600 development finance projects in Bangladesh, Nepal, Sri Lanka, Pakistan, Afghanistan, Maldives and India. These came in the form of loans, grants, export/supplier credits, technical assistance programs.
Interestingly, while China’s outreach to South Asia mainly involved infrastructure investments, humanitarian assistance and budgetary support, debt forgiveness initiatives were an important feature of the Chinese projects.
The datasets show that Chinese projects in five key areas of China’s engagement with SouthAsia. The tale accompanying the following graphs is an evidence that the Beijing’s interest in the region predates its belt and road initiative.
South Asia is the preferred destination for China’s development finance
Five out of the six largest recipients of loans and aid from China between 2000 to 2017 were SouthAsian countries – Pakistan, Sri Lanka, Afghanistan, Nepal and Bangladesh. As is evident from the chart above, China has undertaken more projects in SouthAsian countries than anywhere else in the world, indicating the importance of the region for Beijing’s diplomatic priorities. Even India and Maldives figure prominently in terms of the number of projects between 2000-2017.
Pakistan is the largest recipient of Chinese development finance. India the smallest
China’s outreach to SouthAsia between 2000-2017 mainly targeted Pakistan, followed by Sri Lanka, Afghanistan, Nepal and Bangladesh. Given China’s close relationship with Pakistan and its economic interests like the China-Pakistan Economic Corridor (CPEC) corridor, Pakistan leads all SouthAsian countries receiving China’s development financing. India on the other hand, receives the least amount of loans and aid from China.
China’s outreach to South Asia is on the rise
Besides being the largest recipients of Chinese development finance and assistance, SouthAsian countries have also witnessed an increase in Chinese financial aid and investments since 2000. The number of projects undertaken per year in 2017 is slightly higher than the number of projects in 2000 for most countries in South Asia with the exception of India.
Chinese development financing focused on infrastructure investments and humanitarian assistance
China financial diplomacy between 2000 to 2017 was mainly channeled into infrastructure investments and humanitarian assistance. Infrastructure investments include a broad range of donations, loans and grants: from donating supplies worth 10 million RMB for Nepal’s general elections in 2013 to an 80 million RMB grant to Afghanistan for post-war reconstruction in 2006.
China has also provided humanitarian assistance to countries in SouthAsia on numerous occasions between 2000 and 2017. As the graph below shows, Chinese contribution towards emergency response in the region was one single largest chunk of money, as compared to other areas like transport and storage, energy, education and health. Indeed, Chinese contributions also went to civil society, possibly meaning civil society organisations. Here, China also provided financial aid and loans for the social sector including those engaged in education, health and social infrastructure.
China financed capacity building projects and provided emergency relief
China’s financial assistance was focused mainly on emergency and disaster assistance programs, supplying material goods and supplies to recipient governments during a crisis. China also invested in building capacity: transport and storage facilities like ports and energy projects like coal plants.
To reiterate, the importance of SouthAsia is not new to the thinking of Chinese policymakers engaged in crafting Beijing’s ‘development-diplomacy’. The multifaceted story of Chinese assistance to the region has allowed China to cultivate goodwill while enhancing its image in the region.
Image: Wikimedia
