As part of its geopolitical studies, China has long had a strong presence in the Indian Ocean region. The threat has always been India, one of the giant superpowers in South Asia. But also Chinese opponents like the United States have not seen such an increase in China’s power and capabilities through economic aid and cooperation. Has China’s influence in South Asia begun to wane recently? This is the first time that Bangladesh has signed an agreement of currency swap with Sri Lanka, overcoming India’s monopoly on various economic aid cooperation with South Asian countries.
China’s expansion policy in the Indian Ocean has so far been centered on several parts of Africa, as well as Sri Lanka, the Maldives, Bangladesh, and Pakistan. Lending and investment have created a kind of dominating relationship with these countries. Sometimes China has been seen to put pressure on the debt-ridden state and sometimes it has annexed the territory of that state, which are referred by string of pearls.
What is string of pearls
The string of pearls is basically a hypothesis of the Chinese plan for the Indian Ocean region. This theorem was formulated by a US expert in 2004. It basically refers a path to various maritime spots in the Indian Gulf where China wants to build their military and commercial bases, from land of China to Sudan port to Horn of Africa. It includes several maritime spots, notably the Mandeb Strait, Malacca Strait, Hormuz Strait, Pakistan, Bangladesh, Sri Lanka, Maldives and Somalia. The reasons may be Sri Lanka’s economic weakness and political instability, the influence is much higher in Sri Lanka.
Chinese methods of influence
The methods it followed in order to expand his influence in the Indian Ocean region, almost all of them are found in the case of Sri Lanka. One of the main method is the debt trap. China has been providing various loans to Sri Lanka for last fifteen years, initially it had soft loans but now it has turned into hard loans. As Sri Lanka was unsuccessful to repay, an entire island is leased for Ninety nine years. Besides economy it is needless to say in political aspect that Sri Lanka has followed China’s lead in the international arena.
Another China’s method is to invest in developing and underdeveloped states. Referring the Policy, Colombo Port City is a prime example of Chinese investment in Sri Lankan territory over the past decade. The last policy of Chinese system includes trade.
Over the past two years, Sri Lanka has relied heavily on China instead of neighboring India for trade. However, this is not only true in the case of Sri Lanka, but also in the Indian Ocean region, including Bangladesh and Pakistan, where trade dependence on China has increased.
Is Chinese influence diminishing?
Although China has always sought to dominate the various states of the South, India has countered in this regard. It has always stood by its neighbors in all areas of lending or investment or trade, although it has a lot of differences with Sri Lanka over the Tamil issue. Moreover, now that the Sri Lanka is in need of dollar, the country has sought help from Bangladesh. In this circumstances Bangladesh has recently signed a currency swap agreement with Sri Lanka worth about 200 million dollar. According to the agreement Sri Lanka will be able to pay money to Bangladesh through the exchange currency which was pre defined in very low interest.
India was an alternative to China’s monopoly power in South Asia in lending, but this is the first time Bangladesh has provided loan assistance to a SAARC country. Chinese influence is decreasing in South Asia, this cannot be said for sure. Although Bangladesh has come forward with the cooperation of Sri Lanka, Bangladesh itself is a developing country which has to rely on the help of various countries and organizations. The desire to further improve its position in South Asia behind lending to Sri Lanka may be more of Bangladesh or its friend in international arena. However, one of the reasons for not borrowing from China is that Sri Lanka is already heavily indebted to China. According to a recent report, Sri Lanka still has to repay about five billion dollars in debt to China.