A New Geopolitical Reality in South Asia

In recent days, South Asia has become a focal point of discussions regarding China’s growing influence in the region. A series of significant diplomatic, economic, and political developments have brought Beijing’s strategic moves under renewed scrutiny. Among the most notable events was Sri Lankan President Anura Kumara Dissanayake’s official visit to China, during which he signed 15 Memorandums of Understanding (MoUs), further deepening Colombo’s engagement with Beijing. Simultaneously, India and China engaged in high-level Foreign Secretary and Foreign Minister discussions, reflecting the ongoing diplomatic maneuvering between the two Asian giants. Meanwhile, a controversy involving the harassment of six Chinese nationals by the Sindh Police in Pakistan has also added another dimension to the discourse.

During his state visit to China, President Dissanayake secured a $3.7 billion investment agreement with Sinopec, a Chinese petroleum refining giant, to establish an oil refinery in Hambantota. This deal comes as Sri Lanka continues to seek foreign investment to recover from its economic turmoil. Additionally, Colombo finalized a debt restructuring agreement with China Exim Bank and China Development Bank, a move that is expected to facilitate the release of the next tranche of Sri Lanka’s $2.9 billion International Monetary Fund (IMF) bailout package. The joint statement issued by both nations emphasized the commitment to ‘high-quality’ Belt and Road cooperation, signaling that Sri Lanka remains a key player in China’s ambitious global infrastructure initiative.

Significantly, Sri Lanka also reaffirmed its support for China’s stance on politically sensitive issues such as Zhejiang and Xinjiang. This diplomatic alignment suggests a deepening of relations between the two nations, reinforcing Beijing’s ability to shape geopolitical narratives in South Asia. However, despite his overtures to China, Dissanayake remains conscious of the importance of maintaining ties with India. Addressing a public gathering in Katukurunda on January 20 upon his return from China, he underscored the necessity of strengthening Sri Lanka’s relationship with India, which he described as “the most important.”

While Sri Lanka continues to engage with both Beijing and New Delhi, India’s investment projects in the country are encountering obstacles. The wind power projects in Mannar and Pune, which were approved under Adani Green Energy Sri Lanka Limited as part of a joint initiative by the Indian and Sri Lankan governments, have faced legal and financial challenges.

The Sri Lankan Supreme Court is currently reviewing the pricing agreement for fuel supplied to consumers under the project, and the government has appointed a committee to scrutinize the project’s high tariffs. This development is particularly noteworthy as the same wind power project was initially awarded to China before India secured the contract.

New Delhi has voiced concerns over the repeated delays in Sri Lanka’s execution of joint venture projects. Several agreements signed between India and Sri Lanka have been abandoned, the most recent being the Eastern Container Terminal at Colombo Port.

India’s struggle to implement its projects underscores the political and bureaucratic hurdles that Indian investments face, a challenge that Chinese projects appear to navigate more effectively.

In Bangladesh, China has emerged as a dominant player in infrastructure development and military cooperation. The political shift in Dhaka following the downfall of Sheikh Hasina in August last year has further cemented Beijing’s ties with the new interim government. Unlike India, which has seen its influence in Bangladesh wane due to what is perceived as an unfavorable political climate, China has actively reinforced its “all-round strategic partnership” with Dhaka.

As Bangladesh’s largest trading partner and second-largest buyer of Chinese arms, China enjoys substantial economic and defense relations with the country. Infrastructure projects spearheaded by Beijing are widely promoted as symbols of “genuine friendship,” in contrast to Indian-led projects, which are often viewed with skepticism and criticism. As a result, India’s engagement with Bangladesh has diminished considerably, with anti-India sentiments prevailing in Dhaka’s political discourse. This shift highlights China’s ability to sustain long-term diplomatic and economic relations in the region, regardless of domestic political changes.

Despite China’s expanding influence in South Asia, its investments and personnel in the region have faced security challenges. Pakistan, a key partner in Beijing’s Belt and Road Initiative (BRI), has witnessed growing tensions between Chinese nationals and local authorities. On January 27, four Chinese citizens filed a petition in the Sindh High Court, alleging that they were being unjustly confined to their residences under the pretext of security concerns. This incident is not an isolated one; Chinese workers in Pakistan have repeatedly faced security risks, including targeted attacks by militant groups.

Similar tensions have emerged in Bangladesh, where Chinese investments have occasionally sparked local unrest. In 2019, clashes broke out in Patuakhali between Chinese and Bangladeshi workers following the death of a Bangladeshi employee. In 2021, violent confrontations erupted in Banshkhali, Chittagong, after Bangladeshi workers protested against unpaid wages at a Chinese-operated project. The situation escalated when police opened fire on protesters, killing five workers. These incidents highlight the underlying friction between Chinese enterprises and local communities, raising questions about the long-term sustainability of China’s workforce presence in South Asia.

As the geopolitical landscape of South Asia continues to evolve, the competition between India and China for regional influence remains intense. While both nations invest heavily in infrastructure and economic projects, their approaches and reception differ markedly. Chinese investments, often accompanied by state-backed financial support and strategic partnerships, face less political scrutiny within host nations. In contrast, Indian projects frequently encounter domestic political resistance, nationalist sentiments, and legal hurdles, making implementation more challenging.

China’s economic diplomacy has proven effective in building long-term relationships with South Asian countries, leveraging financial incentives and infrastructure investments to secure strategic footholds. Conversely, India’s engagement, though significant, often struggles against nationalist narratives and political opposition. This dynamic has allowed Beijing to gain ground in countries where India once held a dominant influence.

China’s growing involvement in South Asia is reshaping regional dynamics, presenting both opportunities and challenges for its partners. While Sri Lanka, Bangladesh, and Pakistan continue to engage with Beijing for economic and infrastructural development, security concerns, labor disputes, and political sensitivities remain obstacles to seamless cooperation. India, despite being a major player in the region, finds itself increasingly challenged by China’s expanding influence and strategic maneuvering.

As South Asia navigates this complex geopolitical environment, the competition between China and India will continue to define the region’s economic and political trajectory. Whether China’s engagements translate into long-term stability and prosperity for the region or lead to further geopolitical friction remains to be seen. One thing, however, is certain—South Asia’s strategic significance in the global power game has never been greater.