The Sri Lankan government has cleared one more Chinese project – the expressway linking the southern port city of Hambantota with Matara, which will be the second phase of the previous Chinese-funded project that connects Matara with Colombo. This was one of former President Mahinda Rajapaksa’s pet projects – connecting his hometown with the capital.

The Chinese government-owned CTG is open to funding $50 billion worth hydroelectric power projects in Pakistan
The Chinese government-owned CTGC is open to funding $50 billion worth hydroelectric power projects in Pakistan

At the ceremony marking the launch of the new project on Saturday, President Maithripala Sirisena said China is a “very close friend” and Sri Lanka has “a lot of respect” for China for providing development assistance. He vowed to work with China to “further strengthen” the ties between the two countries and promised continuity with the previous government’s policies.

To be sure, the developments in Sri Lanka must come as a morality play for the Indian foreign and security policy establishment. Indeed, the right-wing Hindu nationalist organization Rashtriya Swayamsevak Sangh (which mentored the Narendra Modi government’s Sri Lanka policy from behind the scenes) must be feeling shell-shocked.

What happened to the Tibetan scud missile India hoped to fire at China by getting Sirisena to host the Dalai Lama in Colombo? Mum is the word in Delhi.

It will be good fun to read again a commentary on the implications of the “regime change” in Sri Lanka last January, featured on the website of the Vivekananda Foundation: “More than anything else… Sirisena will have to recalibrate Colombo’s equations with Beijing. Over the past half a decade, Rajapaksa had deftly used the Chinese card against India… Rajapaksa allowed the Chinese large stakes in vital sectors of Sri Lanka than necessary… Sirisena had promised to review that policy.

“Fortunately, the [Indian] foreign policy establishment appears to be thinking on its feet. Prime Minister Narendra Modi was the first leader to call Sirisena and congratulate him. India’s high commissioner to Colombo Yash Sinha also was the first off the block to go and meet the new President [Sirisena].”

Evidently, Sirisena has a mind of his own and Modi and Sinha’s goodwill gestures notwithstanding, Sri Lanka has no intentions to curb its relations with China in deference to Delhi’s wishes.

The point is, China-funded projects in Sri Lanka created over a hundred thousand jobs during the past 5-year period. It appears that 90 percent of the labor force in the Chinese-funded projects consisted of the local youth, many of whom have been trained by the Chinese companies to handle new technology.

Be that as it may, another report coming in from Pakistan is even more of an embarrassment for the Modi government than Sirisena’s China policies.

Delhi has let it be known that it is displeased with the construction of the China-Pakistan Economic Corridor in which Beijing has pledged to invest $46 billion. India’s grievance is apparently that some of the projects in the Economic Corridor are located in the Pakistan-Occupied Kashmir and the Northern Areas of Pakistan, which India claims as its territories.

Now comes the startling report that the Chinese Leviathan specializing in dam construction, China Three Gorges Corporation [CTGC], is open to funding $50 billion worth hydroelectric power projects in Pakistan, many of them in the so-called Indus Cascade on territories that India claims to be its, such as Skardu in Gilgit-Baltistan.

Delhi’s demarche to Beijing to lay off Indian territories (within Pakistan) is being ignored. However, the curious part is that CTGC has a Pakistani subsidiary known as China Three Gorges South Asia [CSAIL] in which the International Finance Corporation [IFC] headquartered in Washington holds a 15 percent stake. The CTGC chairman Lu Chun was quoted during a visit to Islamabad in April as saying,

“Pakistan is one of the most important overseas markets of CTGC, we are pleased to contribute to the development of Pakistan’s economy, along with IFC. China Three Gorges South Asia Investment Limited will grow together with Pakistan’s economy, and proactively explore new cooperation opportunities across the region.”

In sum, the Chinese company is joining hands with a member of the World Bank group to fund power projects in Pakistan. What can Delhi do now? Lodge protest with Washington?

Trickier than the above two unhappy instances is going to be the latest Chinese proposal for building an Economic Corridor from Tibet to India via Nepal. It is one of those “win-win” projects that Delhi will have difficulty to stonewall. The problem is that both China and Nepal are keen on it but Delhi is apprehensive that the project may undercut India’s calculus that Nepal falls within its “sphere of influence.”

Of course, given the Chinese diplomatic ingenuity, it is entirely conceivable that there will be downstream “win-win” proposals at some point to have the Tibet-Nepal-India Economic Corridor extended to Bhutan and Bangladesh as well.

Oh, these Chinese and their “win-win” projects in South Asia! The Modi government’s South Asian diplomacy is landing in a cul-de-sac. Its twin-objective has been to get Beijing (and the international community) to tacitly accept the South Asian region as India’s “sphere of influence” and, secondly, to dissuade India’s small neighbors from cozying up to China.

China is ignoring the Indian entreaties, while the small South Asian countries apparently love to hold the Chinese hand.

India’s retaliatory steps so far – new defense pact with the US, strengthening of US-Japan-India trilateral forum, naval deployments in the South China Sea, Indian warships calling on Perth, proposed naval exercise with the US and Japan in the Bay of Bengal and so on – do not appear to impress the Chinese. If anything, they might be inspiring Beijing to conjure up all-the-more seductive “win-win” projects in the South Asian region.

A face-saving exit route for India’s diplomacy seems to be to join China’s “win-win” projects and to influence them from within. Wasn’t it Abraham Lincoln who said – ‘The best way to destroy an enemy is to make him a friend’?

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