China loses influence in South Asia

Beijing’s ambitious objectives of expanding its influence in South Asia appear to be facing troubles thanks to rising anti-China sentiments in the region. People and politicians in Sri Lanka, Bangladesh, Nepal, and the Maldives have been expressing their opposition to China’s policies and its presence in their countries. The ongoing economic crisis in Sri Lanka, which led to the Chinese occupation of Hambantota port over non-repayment of loans, has added to the problem.
The “predatory” lending for China-led infrastructure projects especially under the Belt Road Initiative (BRI) has become the major reason for the growing suspicion about China. In the past year, several anti-China protests have been held in Sri Lanka as the people of the island nation hold Chinese for the economic crisis. Recently, Sri Lankan legislators protested against China’s refusal to restructure the debt and threatened to launch “China go home” campaign. “If the Chinese government and Embassy do not look after the interests of our Lankan people… there will be a China go home campaign soon,” said 32-year-old legislator Shanakiyan Rasamanickam.1
Interestingly, Chinese investment was opposed by Sri Lankans way back in 2017.2 The protestors that included Buddhist monks had warned the government that the BRI would lead their country to become a Chinese colony.3 Those warnings apparently turned true after Sri Lanka lost sovereignty over the Hambantota port to China. South Asian countries have been watching these developments closely and expressing concerns over the fallouts of taking Chinese loans.
Bangladesh is the second-highest recipient of Chinese loans in South Asia after Pakistan. Financial experts in Bangladesh criticised Chinese loans for being expensive and having no facilities such as grants, unlike loans from the World Bank, Asian Development Bank (ADB) or Japan International Cooperation Agency (JICA). Ahsan H Mansur, executive director of Dhaka-based think tank Policy Research Institute (PRI) highlighted the deception being used by the Chinese contractors. He said they show lower cost while taking up contracts but increase it significantly later.4 This adds to the debt principal and interest, thus increasing the loan burden.
The amount of defaulted loans in Bangladesh has reached approximately 12.38 billion. Expressing concern over the Chinese loans, Bangladesh
Finance Minister Mustafa Kamal warned developing countries to think twice
before taking Chinese loans. “Everybody is blaming China. China cannot
disagree. It’s their responsibility,” he said.5 The minister also took a jibe at
China over the ongoing economic crisis in Sri Lanka. There is another
reason in Bangladesh for growing anti-China sentiments. It is a persecution
of ethnic minority Uyghur Muslims. Protests were held across Bangladesh
in November to condemn China for human rights violations in Xinjiang.6
Maldives, where the political landscape is sharply divided between pro-
China and pro-India groups, too saw people protesting against the inhuman
treatment to Uyghur Muslims.7 “Loan sharks”, “China Out’ were the slogans
protesters raised. Now, the pro-India government in Maldives has restricted
China’s interference in the country and has adopted ‘India First’ policy.8
This is troubling news for Beijing especially when it made the investment
to the tune of USD 1.5 billion in the strategically important nation.9 The
loan amount haunts the Maldives as it does not find enough revenue to pay
back the Chinese debt.10 The Chinese response to the Sri Lankan crisis has
made Maldives wary of Chinese loans that are massive for the tiny nation
with a GDP of just USD 4.9 billion.11 Now, India has started taking efforts
to alleviate the Maldives’ debt problem, thus recapturing the space it had
lost to China.12
While Nepal had signed into BRI in 2017, the Himalayan country in March
2020 decided not to continue with it due to concerns over the debt trap.1314
Moreover, China is facing criticism over allegations of encroachment of
Nepalese territory at several locations and hurting Nepal’s export by
blocking the international border for months. 1516 China is fast losing the gains it had made in Nepal after Nepal Communist Party lost its power. Now, the return of the pro-India government, India is going to make things difficult for China to maintain its influence. China appears to be losing all gains it made in South Asia in the recent years.