Pearls and Irritations

The fall of Sheikh Hasina’s government in Bangladesh has been described as a strategic loss for India and a potential gain for China. But various obstacles may hinder China from gaining greater influence in the region. Political instability, economic challenges, and India’s enduring importance to Bangladesh will limit the extent of China’s influential inroads.

The fall of Bangladeshi Prime Minister Sheikh Hasina, an atypically pro-Indian Bangladeshi leader, has been a serious strategic loss for India. For many observers, India’s loss is certain to be China’s great strategic gain. But while Beijing may improve its position in Bangladesh, that conclusion is exaggerated and premature.

The Bangladesh crisis has given China an advantage over India and an opportunity to expand its influence. But Beijing is facing serious obstacles that will blunt its advantage, slow the expansion of its influence and make seizing this opportunity difficult.

The collapse of Sheikh Hasina’s Government following weeks of protests is a major blow to New Delhi. Not only had India effectively staked its relationship with Dhaka on Hasina’s regime, but the protest movement, which includes students, supporters of the opposition Bangladesh National Party and Islamists, has an anti-Indian bent.

Hasina’s Government was a valuable strategic asset for India. It stabilised the previously troubled India-Bangladesh relationship and opened a “golden chapter” in the relationship, according to both sides in a 2021 joint statement. During her 15-year tenure, Hasina addressed New Delhi’s long-standing concerns about cross-border militancy, protection of Bangladesh’s Hindu minority and Pakistan’s activities in Bangladesh.

For India, the partnership with Bangladesh was also crucial for promoting regional connectivity and economic integration in South Asia under Indian leadership. In a major win for India, Dhaka and New Delhi established a railway connection through Bangladeshi territory to supply India’s poor, restive and China-pressured Northeast, with plans for developing further rail links. The fall of the Awami League Government threatens these Indian gains.

Hasina’s government sought to strike a balance between Beijing and New Delhi, but with a tilt toward India. This tilt became obvious, despite many successful Chinese projects in Bangladesh, when Dhaka cancelled the China-supported and strategically crucial Sonadia deep-sea port, likely under Indian pressure.

The increasingly beleaguered Hasina Government had decided to lean strongly on New Delhi in 2024. It chose India over China for financing the reservoir of the crucial Teesta water project, which Beijing had long sought to finance despite Indian opposition prompted by security concerns. Beijing signalled its displeasure during Hasina’s July 2024 visit to China, by treating her coldly and providing just one billion renminbi (US$137 million) in financial assistance, as opposed to the requested US$5 billion. An angered Hasina cut short her visit.

The coup in Bangladesh gives China an advantage over India and an opportunity to expand its influence. Beijing, with its ample financial resources, enjoys an advantage over New Delhi in a Bangladesh that is mired in economic crisis and unfriendly towards India,.

The installation of a new Bangladeshi Government offers China an opportunity to expand its influence. That would not only allow Beijing to increase its influence on India’s eastern front, as it has done on India’s western front through its relationship with Pakistan, but also boost its presence in the Bay of Bengal and the North Indian Ocean. Crucially, together with recent Chinese inroads in the Maldives, it would help keep New Delhi boxed in in South Asia and less able to challenge Beijing in the broader Indo-Pacific theatre.

But it will be difficult for China to make use of its advantage and seize the opportunity. Political instability in Bangladesh, fuelled by the revolution, the lack of a clear political alternative, purges of Awami League officials and student takeovers of parts of the state, is a major obstacle against the expansion of Chinese influence.

To do business with Bangladesh, Beijing needs a stable government in Dhaka that can keep its commitments, particularly as China has centred its relationship on the Awami League Government. The presence of a powerful Islamist movement, which might play a key role in a future government and which has occasionally been critical of China, is also a negative for Beijing.

Bangladesh’s difficult economic situation is another obstacle. It means that China might have to offer large loans to Bangladesh — an expensive and high-risk bet on Dhaka’s future with limited immediate benefits. Moreover, the combination of economic crisis and political uncertainty complicates large Chinese investment projects in Bangladesh and is likely to put off Chinese businesses.

The United States, which opposed the increasingly undemocratic Hasina Government to India’s displeasure, is another constraint on Chinese influence. Washington, which was supportive of the protest movement, is close to interim leader Mohammad Yunus and is likely to increase its influence as Bangladesh emerges from the crisis. Dhaka will also need US support to secure desperately needed IMF and World Bank lending.

India remains critically important for Bangladesh, a fact that inherently limits how far Dhaka can align itself with Beijing. An unstable and economically distressed Bangladesh can ill afford a long quarrel with a country that is its largest export destination in Asia, a key energy import and connectivity partner and a neighbour along almost all of its land borders. If New Delhi acts fast to begin rebuilding ties with Dhaka, Beijing’s advantage in Bangladesh will be further reduced.

The political and economic situation in Bangladesh, US influence and India’s inherent leverage over Dhaka limit the extent to which Bangladesh can move closer to China. The revolution in Bangladesh will likely improve Beijing’s relative position vis-a-vis India but will not be the Chinese triumph that some predict.

Republished from EAST ASIA FORUM, August 25, 2024

Share and Enjoy !

SHARE TWEET SHARE COPY EMAIL PRINT