China has become a topic of discussion in South Asia over the past few days. Whether it is Sri Lankan President Anura Kumara Dissanayake’s state visit to China from January 14 to 17, during which he signed 15 MoUs; the India-China Foreign Secretary-Foreign Minister level talks; six Chinese nationals in Pakistan filing harassment cases against the Sindh police; China aiming to assist in training students studying in institutions managed by Jamaat Islami Bangladesh—media coverages like these speak volumes about Beijing’s growing engagement with South Asia and India’s strategic gains and losses.

Sri Lanka, China and India

China is a vital destination for the political leaders in South Asia. It serves as a strategic signal to India and facilitates investment for new projects with a request to reschedule debts. During his visit to China, Dissanayake successfully signed a $3.7 billion investment from Sinopec (a petroleum refining corporation) for an oil refinery in Hambantota, Sri Lanka. An agreement with the China EXIM Bank and the China Development Bank to restructure Sri Lanka’s debt to China will likely help secure the release of the IMF’s next tranche of $2.9 billion disbursement. The joint statement emphasised partnering on ‘high quality’ Belt and Road cooperation. Sri Lanka pledged to support China’s position on Xizang and Xinjiang. They agreed to ‘jointly open up new space for win-win development of higher standard, stronger resilience and greater sustainability’. This visit was viewed as Dissanayake’s attempt to walk the ‘tightrope’ between India and China. He visited India last year, shortly after assuming the presidency.

In a public meeting in Katukurunda following his return from China, Dissanayake on 20th January said, “So we have to forge strong links with other countries. In this, the most important is India”. He also reflected on the discussions between an Indian company and the Ceylon Petroleum Corporation regarding the construction of an oil refinery with 61 oil tanks jointly managed by India and Sri Lanka in Trincomalee, a port city on the northeast coast. India has agreed to supply liquefied natural gas to Sri Lankan power plants to generate electricity.

Interestingly, the wind energy project in Mannar and Pooneryn granted to Adani Green Energy Sri Lanka Ltd as part of the India-Sri Lanka governments’ initiative is now being challenged in the Supreme Court of Sri Lanka. The pricing agreement to provide energy to consumers has been revoked. The project is under review by a committee appointed by the Sri Lankan government, ostensibly for high tariffs. This project, which is near to India’s coast, was earlier given to China. New Delhi has expressed concerns about the delays by Sri Lanka in all the joint venture projects, some of which, the most recent being the Eastern Container Terminal of the Colombo Port, were cancelled after an agreement was signed.

A new beginning?

India’s Foreign Secretary, Shri Vikram Misri, visited Beijing on 26-27 January to participate in a meeting of the Foreign Secretary-Vice Foreign Minister mechanism that exists between the two countries. The ties between the two countries had deteriorated following the Galwan incident (a series of clashes between Indian and Chinese troops in the Galwan Valley along the Sino-Indian border on June 15, 2020). Indian Minister of External Affairs, Dr S Jaishankar, emphasised the need to detangle its relationship from the complications of post-2020 border situations with China and underlined India’s approach based on ‘mutual respect, mutual sensitivity and mutual interests’ as guiding principles.

In the Special Representative meeting on December 18, 2024, the two countries underlined that peace and tranquillity at the border would help the ‘normal development of bilateral relations’. Both China and India shook on resuming direct flights between them. They have also agreed to operationalise the mechanisms to resume the Kailash Mansarovar Yatra and share data on trans-border rivers and border trade.

China and Bangladesh

China also strengthened its bilateral ties after the ouster of Sheikh Hasina in a revolt against her regime in August last year. Immediately after the political change, China emphasised its ‘all-round strategic partnership’ with the new interim regime in Bangladesh, as the US appeared to be a close partner of the newly formed government. China swiftly engaged the religious political parties that were crucial in organising the street protests against Hasina. In September 2024, the Chinese Ambassador to Bangladesh, Yao Wen, met Jamaat-e-Islami Amir Dr Shafiqur Rahman at the party office in Moghbazar. China also hosted a 14-member delegation consisting of Jamaat Islami and its student front, the Islami Chatra Shibir and four other Islamic parties—Khilafat Andalon, Khilafat Majlis, Nezam Islam Party and Hefazat-e-Islam—in Beijing on November 26-28, 2024. It also hosted the Balochistan National Party leaders in the same month.

China has also trained students in Jamaat-run institutions and orphanages. It is also Bangladesh’s largest trading partner. Meanwhile, Bangladesh remains the second largest recipient of Chinese-made weapons. China’s infrastructure development in Bangladesh reflects ‘genuine friendship’, and Indian projects are portrayed as unfair and unequal. As India has minimal interactions with Bangladesh, given its anti-Indian stances, the Chinese engagement shows how political change in South Asia does not affect China’s relations, which is seen as a balancer to India. Bangladesh’s recent overtures to Pakistan, which was accused of genocidal killings in 1971, is to send a message to India that played a major role in the 1971 liberation and is currently sheltering Sheikh Hasina.

Challenges to Chinese investment

The Chinese are facing difficulties in Pakistan due to security threats to their workers as there have been clashes between them and locals. On January 27, 2025, four Chinese nationals petitioned against political harassment at the Sindh High Court. They also claimed they were not allowed to move out of their premises without being justified on the pretext of their ‘security’. In 2018, such restrictions on Chinese workers working on a motorway project resulted in a scuffle between the Chinese workers and the police in Punjab province. The workers were later deported to China. In 2019, Chinese and Bangladeshi workers clashed in Patuakhali (a town in Bangladesh) over the death of a local Bangladeshi. Similarly, in 2021, clashes between locals and Chinese workers were reported in Banshkhali in Chittagong over unpaid wages to the local workers, leading to police firing, which killed five Bangladeshi workers. Such conflicts with local workers were also reported in Sri Lanka, where China is developing the infrastructure.

Despite challenges, China has become an important economic and strategic partner for South Asian countries. India is equally engaged in development projects in the region. Unlike China, Indian projects compete with domestic nationalist political narratives and are subject to intense political scrutiny. With the change of each ruling political regime in South Asia, the contours of their bilateral relations with India and China change as well.