New Study shows China spent $126 billion to gain influence in South & Central Asia.
China’s growing Public Diplomacy has seen its largest financial allocations to Pakistan and Kazakhstan as a part of its outreach to drum up support in South and Central Asia, a new study has revealed.
The study named Silk Road Diplomacy, was done by AidData, a non-profit organisation, in collaboration with the Asia Society Policy Institute and the Center for Strategic and International Studies. It used a variety of methods to quantify Beijing’s efforts to woo support in Asia.
Between 2000 and 2018, Pakistan garnered 30% of China’s international financing, while Kazakhstan was a close second with 26%
“Beijing’s financial diplomacy – representing an estimated US$126 billion in committed, implemented or completed in the South and Central Asia region dwarfs its other public diplomacy tools in sheer scale and visibility,” the study said. “An early country to sign on to Belt and Road Initiative, Pakistan received the lion’s share of its financial diplomacy,” the study says.
The China Pakistan Economic Corridor project received $60 billion “to build its network of roads, pipelines, industrial parks and a port along the Arabian sea.”
The study points out that “infrastructure projects” top the agenda and account for 95% of the financial assistance to countries in South and Central Asia. The balance of 5% goes to “general budget support, humanitarian assistance and debt relief.”
However, the study also points out that China is likely to back projects that other funders may have refused to finance due to the country’s inability to “manage debt.” This leads to criticism that China “entices countries to borrow beyond what they can pay.”
The study also labels the assistance as “circular lending,” where China-funded projects have Chinese companies and labour carrying out the bulk of the work. This mitigates the risk to China’s lending, the study says, but has “attracted criticism” from some of the recipient countries “who are not seeing benefits to the local economy.”
However, the study also points out that this kind of aid with strings attached is not unique to China. However, it warns that due to the lack of transparency in the financial assistance packages, “there is greater opportunity for political capture and corruption.”
This is something that traditional rivals like India have repeatedly flagged in the region
“We have consistently warned our South Asian neighbours like Sri Lanka of the debt trap that Chinese financial assistance leads to,” a senior Indian government security official told Asia Times.
“We have seen this in the Maldives and we have seen this in Chinese investments in the Hambantota region of Sri Lanka as well as the new city they are purportedly building off Colombo.”
“Chinese investments in Gwadar, Pakistan, has also not gone down well with the local Baloch community,” the official said.
According to the study, Pakistan has received $38.43 billion and Kazakhstan $32.87 billion so far. Sri Lanka is at $12.70 billion and Bangladesh at $10.32 billion. India has received about $6.3 billion in the form of financial packages from China.
“At the end of the day, citizens appear to be somewhat polarised regarding Beijing’s financial diplomacy overtures in their countries,” said Siddhartha Ghose, AidData Associate Director and a co-author of the report.
“These activities are associated with both lower approval and disapproval of Chinese government leadership. Some of these mixed feelings may stem from the fact that the Chinese government often ties its offers of financing to the use of Chinese firms, labour and supplies, with limited trickle-down to the local economy.”
Interestingly, the study also tracked Beijing’s efforts to woo senior and elite leaders in countries it deems to be of strategic interest. “It demonstrates a preference for hosting leaders on its home turf as opposed to going further afield,” the study notes.
This being a “top priority,” Beijing seems to be most interested in cultivating government diplomacy in South Asian nations. Not surprisingly, it recognises India as a dominant player in South Asia, while Kazakhstan is the regional powerhouse in Central Asia.
South Asia received 85% of Beijing’s “party-to-party” visits where delegates visit as representatives of the Communist Party. Sri Lanka, Nepal and Bangladesh received the bulk of these visits in the study period.
Military diplomacy is also a key part of Beijing’s toolkit to reach out to countries of its core strategic interest. Military-to-military relations are seen as “more durable” than those forged by their civilian counterparts.
This is seen by the Chinese leadership as a core foundation to further its security objectives in the region. Nearly a third of its military exercises in the region are with Pakistan, while surprisingly, India is also listed as one of its top five partners for joint military drills.
Pakistan is an obvious partner and its joint exercises are centred around providing security to the China-Pakistan Economic Corridor.
Beijing is also expanding its media outreach in these countries to influence their polity. Once again, India and Kazakhstan emerge as the key focus for China’s media outreach efforts
The study says that Beijing uses two methods for its media outreach expanding its international broadcasting operations and cultivating relationships with journalists and media outlets.
While the main message of these efforts is to portray China as a reliable partner in the region, it also drums up support for its position on Tibet and Taiwan.
The government spent nearly $9 billion on international broadcasting and publicity in 2009, with the bulk of the funding going to China Radio International.