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Luciano Medianero Morales


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PREFACIO 

PREFA: EL IMPACTO DE CHINA EN LAS REGIONES ESTRATÉGICAS

Erik Brattberg y Evan A. Feigenbaum

La huella económica y política de China se ha expandido tan rápidamente que muchos países, incluso aquellos con instituciones estatales y de la sociedad civil relativamente fuertes, han luchado por lidiar con las implicaciones. Ha habido una creciente atención a este tema en los Estados Unidos y las democracias industriales avanzadas de Japón y Europa Occidental. Pero los países "vulnerables", aquellos donde la brecha es mayor entre el alcance y la intensidad del activismo chino, por un lado, y, por el otro, la capacidad local para gestionar y mitigar los riesgos políticos y económicos, enfrentan desafíos especiales. En estos países, las herramientas y tácticas del activismo y las actividades de influencia de China siguen siendo poco conocidas entre los expertos locales y las élites. Mientras tanto, tanto dentro como fuera de estos países, la política transpone con demasiada frecuencia las soluciones occidentales y no está bien adaptada a las realidades locales.

Esto es especialmente notable en dos regiones estratégicas: Europa Sudoriental, Central y Oriental; y Asia meridional. El perfil económico y político de China se ha expandido inusualmente rápido en estas dos regiones, pero muchos países carecen de un banco profundo de expertos locales que puedan hacer coincidir el análisis de las implicaciones internas del activismo chino con las recomendaciones de políticas que reflejen la verdad política y económica interna.

Para abordar esta brecha, la Fundación Carnegie inició un proyecto global para comprender mejor las actividades chinas en ocho países "pivotes" en estas dos regiones estratégicas.

El primer objetivo del proyecto fue mejorar la conciencia local sobre el alcance y la naturaleza del activismo chino en estados con (1) instituciones estatales débiles, (2) sociedades civiles frágiles o (3) países donde la "captura de élite" es una característica del panorama político.

En segundo lugar, el proyecto tenía por objeto fortalecer la capacidad facilitando el intercambio de experiencias y mejores prácticas a través de las fronteras nacionales.

En tercer lugar, el proyecto buscaba desarrollar prescripciones de políticas para los gobiernos de estos países, así como para los Estados Unidos y sus socios estratégicos, para mitigar y responder a actividades que no atentan a la independencia política o al crecimiento económico y el desarrollo bien equilibrados.

Para establecer una imagen completa de las actividades de China y su impacto, este proyecto profundizó en el activismo chino en cuatro países de cada región, ocho países en total.

Comenzamos realizando talleres, para que personas influyentes de todos los países pudieran compartir experiencias y comparar notas. Los participantes invitados incluyeron formuladores de políticas, expertos, periodistas y otros, todos con un profundo conocimiento local, inmersos en la política, las economías y la sociedad civil de sus países. En Europa, los cuatro países fueron Georgia, Grecia, Hungría y Rumania, y en el sur de Asia, Bangladesh, Maldivas, Nepal y Sri Lanka. Las discusiones internacionales entre estos participantes regionales tuvieron como objetivo crear conciencia, discutir las implicaciones del creciente activismo de China en sus países y comparar notas sobre las diversas formas en que estos diversos países habían manejado la rápida afluencia de capital, programas, personas, tecnología y otras fuentes de influencia chinas.

After holding several workshops for each region, Carnegie scholars conducted extensive interviews and a comprehensive review of open-source data and literature on Chinese activities—including extensive media monitoring in local languages, from Nepali to Bengali, Georgian to Greek. These deep dives aimed to measure Chinese influence along three dimensions:

  1. Chinese activities that shape or constrain the choices and options for local political and economic elites;
  2. Chinese activities that influence or constrain the parameters of local media and public opinion; and
  3. China’s impact on local civil society and academia.

The first of these three dimensions is important because China’s sheer size means that it will inevitably play a role in these two strategic geographies. China is the world’s largest trader and manufacturer—and it sits on a significant pool of foreign exchange reserves and capital that countries in all three regions will invariably wish to tap. For this reason, these surveys aimed to identify, distinguish, and analyze only those specific activities that could constrict options, reduce the scope of choice, and reward a narrow interest group or elite.

The second of the three dimensions is crucial because China frequently couples its use of economic and political carrots and levers to broad-ranging public relations outreach. When China floods a country not just with investment but also with strategic messages designed to influence public opinion, there is often little space left for counter-narratives, especially in countries that lack independent media or have weak civil societies.

The third of the three dimensions is critical because in the most vulnerable countries of these two regions, civil society and academia are often too fragile to provide balanced coverage of the activism of external powers. In some cases, Chinese funding and so-called united front tactics have shaped domestic narratives.

Beijing, like other outside powers, cultivates friendly voices in nearly every country. But in some countries, there are few counterweights.

By exploring all three dimensions of Chinese influence simultaneously, Carnegie’s initiative has aimed to generate a clearer and well-balanced picture of Chinese activism and messaging in Europe and South Asia, while fostering a cross-national network of influencers who will continue to compare notes, learn across national boundaries, and spur a genuinely regional conversation about China’s rise and its far-reaching implications.

Erik Brattberg
Director, Europe Program and Fellow, Carnegie Endowment for International Peace

Evan A. Feigenbaum
Vice President for Studies, Carnegie Endowment for International Peace

SUMMARY

El rápido ascenso global de China ha creado nuevos desafíos para los Estados Unidos, la Unión Europea (UE) y los gobiernos europeos individuales. Beijing ofrece una alternativa a Occidente y ofrece soluciones listas para usar a los países que buscan desarrollo económico. Sin embargo, China también se aprovecha de las vulnerabilidades y debilidades locales, como las frágiles instituciones estatales, la captura de la élite y la débil sociedad civil, para ejercer su propia influencia económica, política y de poder blando. Una región donde Beijing ha hecho avances significativos es el sudeste, centro y este de Europa. Para China, esta región es particularmente interesante como punto de entrada al resto de Europa para la Iniciativa de la Franja y la Ruta (BRI), con oportunidades de crecimiento para las empresas chinas y con condiciones regulatorias y económicas más favorables que en Europa Occidental.

Si bien la creciente presencia de China en el sudeste, centro y este de Europa puede traer oportunidades socioeconómicas, también puede exacerbar las deficiencias de gobernanza, socavar la estabilidad política y económica y complicar la capacidad de la UE para llegar a un consenso sobre cuestiones clave. Cómo los países gestionan sus vulnerabilidades y desarrollan resiliencia en sus interacciones con China es el enfoque clave de este documento. Examina cuatro países en el sudeste, centro y este de Europa: Grecia, Hungría, Rumania y Georgia, quienes, a pesar de su diversidad, comparten ciertas características comunes que afectan sus relaciones con China, como el afán por impulsar el comercio y la inversión de China. Si bien no los cuatro países comparten vulnerabilidades idénticas, y aunque China ha tenido más éxito en algunos países que en otros, cada estudio de caso ofrece lecciones prescriptivas sobre cómo los países pueden manejar las vulnerabilidades de diferentes maneras.

Las metas y objetivos de las actividades de China en los cuatro países pueden describirse en términos generales como triples: impulsar las exportaciones e inversiones chinas, ejercer influencia política y fomentar una imagen positiva de China y las relaciones con China. Los cuatro países del caso son parte de la masiva Iniciativa de la Franja y la Ruta de China. Por ejemplo, en Grecia, el gigante naviero chino COSCO ha adquirido una participación mayoritaria en el Puerto de El Pireo para crear un centro regional de transporte y logística en el Mediterráneo como parte de la ruta marítima de la BRI. El modelo de negocios de China prospera en entornos donde las instituciones locales y los marcos regulatorios son débiles y donde los líderes políticos y empresariales locales están ansiosos por beneficiarse de la falta de escrutinio público y transparencia que a menudo acompaña a las inversiones chinas. Un buen ejemplo de esto es Hungría, donde la falta de escrutinio público o transparencia beneficia tanto a China como a las élites locales, alimentando aún más la corrupción local y la cleptocracia.

Erik Brattberg
Erik Brattberg es director del Programa Europa y miembro de la Fundación Carnegie para la Paz Internacional en Washington. Es un experto en política y seguridad europeas y relaciones transatlánticas.

Además, si bien China puede tratar de tener influencia política en países individuales a través del desarrollo de lazos bilaterales, generalmente está más interesada en aprovechar la influencia política para tener un impacto regional más amplio, como influir indirectamente en el consenso europeo y la alineación transatlántica en temas particulares de interés para Beijing, como los derechos humanos y las situaciones en el Mar Meridional de China. Hong Kong, Xinjiang o Taiwán. Por ejemplo, tanto Grecia como Hungría han acudidos en diferentes ocasiones en ayuda de China para socavar o bloquear las declaraciones de la Unión Europea sobre ciertos temas relacionados con China. Recientemente, en abril y junio de 2021, el gobierno del primer ministro húngaro Viktor Orbán bloqueó las declaraciones de la UE sobre Hong Kong. Sin embargo, mientras que el actual gobierno griego está dispuesto a ser visto como un jugador confiable dentro de la UE y la Organización del Tratado del Atlántico Norte (OTAN), Hungría sigue dispuesta a acudir en ayuda de China, impulsada por el deseo del gobierno de abrir la puerta a las inversiones chinas, obtener apoyo diplomático sobre el retroceso democrático de Hungría y comunicar las alternativas políticas y económicas de Hungría a Bruselas.

En diversos grados, Beijing ha participado activamente en la región para fomentar una imagen positiva de sí mismo, promover su modelo político y económico y dar forma a las narrativas locales sobre las relaciones con China en los cuatro países. La presencia de una sociedad civil débil y la influencia y el control oligárquico sobre los medios de comunicación y las organizaciones no gubernamentales (ONG) también pueden brindar oportunidades para que China intervenga y llene el vacío. Si bien China se involucra en algunos esfuerzos de poder blando, como intercambios entre pueblos y actividades culturales, la mayoría de estos son relaciones a pequeña escala o heredadas con poca relevancia actual. Recientemente, la pandemia de COVID-19 brindó a China nuevas oportunidades para avanzar al proporcionar asistencia muy necesaria en forma de equipos médicos, productos farmacéuticos y, finalmente, suministros de vacunas.

Sin embargo, en lugar de tratar de ganar corazones y mentes más ampliamente, los esfuerzos de poder blando de China se dirigen principalmente a ciertas élites influyentes clave en los negocios, la política, la academia o las ONG. Los Institutos Confucio chinos y las asociaciones académicas en los cuatro países tienden a ser a pequeña escala, pero la construcción masiva planificada de un campus de la Universidad de Fudan en Hungría, si se completa, constituiría una mejora importante en la presencia de poder blando de China en un momento en que la libertad académica en el país ya está en declive. A diferencia de otras partes de Europa, donde China se ha involucrado últimamente en las llamadas tácticas de diplomacia de guerrero lobo, ninguno de los cuatro países del caso ha experimentado una diplomacia china excesivamente agresiva o operaciones de influencia masiva en las redes sociales. Aun así, las percepciones públicas de China se han deteriorado en toda la región (como también lo han hecho en otras partes de Europa), aunque Grecia y Hungría todavía se encuentran entre los países más amigables con China en Europa.

Despite China’s increased role in the region in recent years and the presence of local vulnerabilities that China can exploit to its advantage, there are several points of resilience that limit China’s influence in the four case countries. For instance, while many countries in the region looked to China as an important economic and political partner after the global financial crisis more than a decade ago, they have gradually become disillusioned with Beijing’s ability to deliver on its promises or the specific terms of certain investment deals. As a result, two of its showcase initiatives, the BRI and the 17+1 format, are increasingly perceived by local governments as a vehicle for Beijing to exert political influence with few tangible results to show for. Political shifts in some European countries have also recently replaced more China-friendly parties with governments that are more skeptical of China and keener on reaffirming ties with the United States and the EU. In other cases, Chinese projects have been interrupted by pushback from local and subnational actors such as trade unions or municipal politicians.

Moreover, China’s soft power efforts appear to have had fairly little impact on improving China’s image in the region. In countries with vibrant media landscapes, China’s influence on shaping local debates and narratives is quite limited. Even in countries where perceptions of China were largely positive or neutral, opinions have soured in recent years, especially during the COVID-19 pandemic. Accounting for the limited impact of Chinese soft power in the region is, first, the limited interest in China and its model especially from young pro-Western people. In addition, it is also possible that China’s inability to deliver on its economic promises, the growing international criticism of Beijing’s domestic and foreign policies, and China’s perceived role in the pandemic have all reduced the effectiveness of its public diplomacy. Even as China has stepped in to provide medical supplies and vaccines, overly politicized Chinese assistance has also prompted more hostile diplomatic and propaganda tactics.

El análisis de este documento identifica lecciones prácticas y prescribe soluciones para los responsables políticos de los Estados Unidos y la UE para ayudar a los estados vulnerables a gestionar mejor los desafíos de una rápida entrada de dinero y los esfuerzos relacionados para ejercer la influencia política, económica o de poder blando de China. El estudio también busca ayudar a los estados regionales y a los analistas locales a comprender y navegar mejor los problemas que rodean el enfoque de China hacia el sudeste, centro y este de Europa.

Recomendaciones a los Estados Unidos, la UE y los países de la región:

  • Evite representar el sudeste, centro y este de Europa como un caballo de Troya chino
  • No exagere la influencia económica de China
  • Comprender mejor los intereses locales
  • Evite asignar importancia estratégica a todas las acciones de China
  • Promover la buena gobernanza y desarrollar la resiliencia local
  • Fortalecer la capacidad de la sociedad civil
  • No te concentres demasiado en el poder blando
  • Estar presente y ofrecer alternativas
  • Responsabilizar a Orbán y sus compinches
  • Aproveche el atractivo occidental
  • Asegurar a los estados más pequeños que Occidente tiene mucho que ofrecer
  • Negar aperturas diplomáticas a China

INTRODUCCIÓN

A medida que la huella de China en Europa se ha expandido en la última década, muchos países, incluso aquellos con instituciones estatales y de la sociedad civil relativamente fuertes, han luchado para lidiar con las implicaciones y consecuencias. Europa Central y Oriental (a veces denominada CEE), así como Europa sudoriental, a menudo se considera particularmente vulnerable a la influencia política, económica o de poder blando de China. Los responsables políticos de los Estados Unidos y la Unión Europea han expresado a veces su preocupación de que la influencia de China en esta región podría ayudar a exacerbar los déficits de gobernanza, socavar la estabilidad política y económica y complicar la capacidad de la UE para llegar a un consenso sobre cuestiones clave.

Después de la crisis financiera mundial de 2008, muchos países de la región consideraron a China como un socio económico y, a veces, político cada vez más importante. Con la esperanza de que China pudiera ayudar a impulsar las economías en problemas, los actores locales firmaron múltiples acuerdos y acuerdos con Beijing, a menudo acompañados de diplomacia, pompa y ceremonia altamente elaboradas, con expectativas irrealistamente altas. En particular, la extensa Iniciativa de la Franja y la Ruta de China prometió oportunidades comerciales y de inversión en áreas como infraestructura, transporte y energía. Los países se inscribieron fácilmente en lo que ahora se llama el formato 17 + 1 para convertirse en socios comerciales preferidos con Beijing. Ejemplos notables de inversiones chinas en la región incluyen el Puerto de El Pireo en Atenas y un proyecto ferroviario que une Budapest y Belgrado.

Several reasons account for China’s growing interest and activity in Southeastern, Central, and Eastern Europe. First, the region can serve as an entry point into the rest of Europe for BRI land and maritime projects. Second, it is less economically developed than Western Europe. Its dependence on foreign investment means greater opportunities for Chinese firms to win infrastructure bids and ultimately acquire critical assets. Third, local regulations and economic conditions are typically more favorable for Chinese companies compared to Western Europe, where transparency and accountability mechanisms present bigger hurdles. Finally, China can also leverage local ties to influence EU decisionmaking or undermine EU unity on certain issues, as well as build legitimacy for the Chinese regime back home.

Philippe Le Corre
Philippe Le Corre is a nonresident senior fellow in the Europe and Asia Programs at the Carnegie Endowment for International Peace.

Fast-forward a decade and the situation looks far more complicated. While many countries in the region are still keen to receive Chinese trade and investment opportunities, Beijing’s track record has disappointed all sides for several reasons. First, while the 17+1 format is a useful way for China to engage with multiple individual countries, it never became a platform to advance Chinese interests broadly in the region. In fact, in many places, it has turned out to be an empty diplomatic shell, with summits and declarations but few clear policies. Six regional leaders skipped the most recent 17+1 summit in early 2021, which was chaired for the first time by Chinese President Xi Jinping himself, demonstrating a growing apathy toward the format. Second, frustration and discontent are mounting over the terms of specific Chinese investment deals in many of the regional states. There have been some high-profile deals, but they remain controversial and have not lived up to expectations that they would bring sustainable jobs and growth objectives. Third, political shifts in some European countries mean that seemingly pro-Chinese parties or politicians have been replaced at the ballot box with leaders more skeptical of China, who have canceled nascent deals. Fourth, several (though not all) of the countries in the region have pivoted away from China and back toward the United States and the EU in recent years, due to existing security partnerships and pressure from Washington and Brussels. The United States’ growing preoccupation with its rivalry with China has translated into increased pressure on regional European governments to reduce their dependence on Beijing and toe the line on issues such as 5G, Chinese ownership of ports and other strategic infrastructure, and investment screening. Similarly, the EU—increasingly wary about Chinese efforts to divide the EU with initiatives like the 17+1 format and the Belt and Road Initiative—has identified China as a partner, an economic competitor, and a systemic rival.1 Finally, the COVID-19 pandemic has further highlighted both the risks and the opportunities of China’s enhanced regional role. Even as China has stepped in to provide medical supplies and vaccines, overly politicized Chinese assistance has also prompted more hostile diplomatic and propaganda tactics.

This paper examines Chinese influence in four regional countries: Greece, Hungary, Romania, and Georgia. Much of Beijing’s activity in these four countries, as elsewhere in the world, can be characterized as regular commercial trade, which is broadly welcomed. The focus of this paper is on cases where Chinese influence has seemingly undermined democratic processes, fostered or taken advantage of corrupt practices, or been harnessed to a local political agenda.

Despite their diversity, all four countries share certain common characteristics that affect their relations with China. They have all been eager to attract Chinese investment to help jump-start job growth, reduce poverty, and build new infrastructure. In addition to infrastructure investments across the region, China has also invested in the energy and transportation sectors. For some countries, that influx of Chinese finance has added to their debt load.

Hit hard by the eurozone debt crisis, Greece, where China has extensive stakes in the Port of Piraeus, is the most recent member of the 17+1 club, joining the format in 2019. One of Eastern Europe’s biggest economies and a former ally in a previous era during the reign of Communist Party dictator Nicolae Ceaușescu, Romania followed this track initially but has grown more cautious. Disillusionment with Chinese investments and fraught domestic politics have blunted Beijing’s aspirations. Although not a member of NATO or the EU, Georgia enjoys a close security and political relationship with both through its long-standing participation in the alliance’s Partnership for Peace program, as well as its association and free trade agreements with the EU. Yet Tbilisi too looked toward China for help, signing a free trade agreement with Beijing, developing much needed infrastructure projects and seeking a counterbalance against an aggressive Russia to its north. Georgian hopes of a new Chinese partnership have dimmed, however. On big political issues Beijing tends to favor Moscow over Tbilisi, while Chinese investment to date has been smaller than many anticipated and often clouded by a lack of transparency.

On the other side of the spectrum is Hungary, where China has developed its closest partnership in Europe. As Hungary slides toward authoritarianism, the government of Prime Minister Viktor Orbán has embraced Beijing, allowing China to leverage pro-government local media and NGOs. The Hungarian government initially welcomed with open arms the proposal to establish a massive Fudan University campus in Budapest—the first outside China—although many Hungarians have pushed back at the project and the project’s future now is uncertain. Hungary has become a leading voice within the EU for closer relations with Beijing, having also opposed joint EU positions on several occasions, particularly when it concerned human rights issues.

METHODOLOGY

Greece, Romania, Georgia, and Hungary were selected for this study because they each share at least one of three characteristics that leave them potentially exposed to malign Chinese influence:

  1. State institutions are weak, making it harder to vet or monitor Chinese economic or political activities. Examples include poor investment screening mechanisms and weak regulatory, law enforcement, anti-corruption, or judicial agencies.
  2. Captured or “capture-able” states and systems, in which the political apparatus and/or civil society are subject to foreign penetration. Chronic crony capitalism, where elites have embraced China for personal or financial gain, has facilitated Chinese political influence, as have underfunded research institutions that accept Chinese funding, to provide Beijing-friendly voices and help justify questionable business arrangements.
  3. Civil society has relatively few independent voices, and independent media often lacks the power to expose instances of corruption and other wrongdoing.

While not all four of these countries share the same vulnerabilities, each case study offers prescriptive lessons, even when China is not intensely active or successful. Countries that manage those vulnerabilities in different ways can help teach others by sharing and comparing their experiences. For example, while three of the four countries are members of both the EU and NATO as well as the 17+1 format, nonmember Georgia, which has shown an interest in developing its ties with China, was included because it provides a useful comparison of Chinese tactics and successes across the broader region.

In terms of research methodology, this paper measures Chinese influence along three crucial dimensions:

  1. Activities that shape or constrain the choices and options for local political and business elites
  2. Activities that influence or constrain the parameters of media and public opinion
  3. China’s impact on local civil society and academia

For each of the four case studies, the paper poses the following critical policy questions:

  1. What underlying strategic logic and objectives drive China’s activities?
  2. What vulnerabilities and weaknesses has China been able to leverage—and by what means (that is, political, economic, technological, or informational tools)? How well coordinated is China’s use of these various tools and efforts?
  3. How effective are Chinese influence activities? What impact do they have on local institutions and public or elite perceptions?
  4. What threats does a Chinese economic profile that fosters dependence and constricts choices pose to the interests of the United States, its allies, and partners? What about direct efforts to exert influence on domestic politics?
  5. Has China played an important role in supplying medical equipment or COVID-19 vaccines? How has China been involved in regional economic recovery during and after the pandemic?
  6. How have these countries managed and mitigated their vulnerabilities? What lessons can other countries draw from their experiences?

The analysis in this paper identifies practical lessons and prescribes solutions for policymakers from the United States and the EU to help vulnerable states better manage the challenges of a rapid inflow of money and related efforts to exercise political, economic, or soft power influence from China. The study seeks to help regional states and local analysts better understand and navigate the issues surrounding China’s approach toward Southeastern, Central, and Eastern Europe.

GREECE: STILL THE DRAGON’S HEAD?

Since 2015, Greece has been seen as one of China’s closest allies in Europe. Chinese companies have made two significant investments there. Piraeus harbor, at the core of the Greek economy, is now managed by a Chinese state-owned enterprise. Xi has referred to it as the “dragon’s head” of the Maritime Silk Road.2 Greek leaders have played along, visiting China frequently and, on some occasions, adjusting their foreign policy to please Beijing. In Thessaloniki, Greece’s second harbor, another Chinese company—China Merchants—has also been playing a key management role although not holding a majority share. Meanwhile, China has developed a positive narrative toward Greece, using media, culture, and education as tools of influence. Chinese officials have also paid multiple trips to Athens, culminating in Xi Jinping’s state visit in November 2019.

Still, in recent months, there has been a visible shift in Greece’s stance toward China. Domestic debates have grown tense and complex. Beijing offered modest help during the pandemic (and made sure the Greek public knew about it). Although the Chinese press depicts Sino-Greek relations in a positive light, Greeks no longer see China as a savior for their economy. In fact, polls show an increasingly defiant Greek public. The country’s conservative government, elected in mid-2019, has reaffirmed Greece’s strong commitment to the EU and NATO, and recent surveys suggest the public supports that stance.3 The cabinet of Prime Minister Kyriakos Mitsotakis retained the EU’s triad definition of China as a partner, an economic competitor, and a systemic rival, and it has reaffirmed its full support for the transatlantic alliance, notably during former U.S. secretary of state Mike Pompeo’s visits in October 2019 and September 2020.

Paul Stronski
Paul Stronski is a senior fellow in Carnegie’s Russia and Eurasia Program, where his research focuses on the relationship between Russia and neighboring countries in Central Asia and the South Caucasus.

China’s flagship investment project in Piraeus has also become mired in conflicting local interests and controversies. Twelve years ago, Greece was opening its arms to China. Now, a combination of shipowners, trade unionists, and local politicians is openly rallying against the port’s main shareholder. Things could change again if Greece’s economy deteriorates further following the pandemic. With the absence of tourists and slower business, Greece’s renewed vulnerability could make it a target for China. Facing a wave of blockages across Europe, Chinese companies in the maritime sector are currently sitting on the fence waiting to see what will come next in Southern Europe after the COVID-19 pandemic.

A BRIEF HISTORY

Chinese records describe early encounters between the Chinese and Greek civilizations as early as the reign of King Alexander the Great (336–323 BC), making the Sino-Greek relationship perhaps one of the oldest between an ancient European nation and imperial China.4 For all the niceties of antique imagery, though, they do not automatically unite the two countries in the twenty-first century. In Greece, some have called the relationship with China “a nostalgic look at a vaunted past,” which may reflect the country’s bitterness in the aftermath of a severe debt crisis as well as the need for renewed self-confidence.5 For a decade or so, it appeared a honeymoon between the heirs of glorious Athens and an assertive Chinese Communist Party suited both nations’ interests. Greece has been associated with the “Maritime Silk Road of the 21st Century” described by Xi in his October 2013 speech in Jakarta (weeks after he detailed the Land Silk Road in Astana), and it is now presented by China as a key supporter of the global BRI project.6

The Republic of Greece and the People’s Republic of China established diplomatic relations relatively late, in 1972.7 For years, center-right parties in Greece kept political ties with Beijing to a strict minimum, reflecting a strong traditional divide between the left and the right as well as a polarized attitude toward the United States that formed in the Cold War era. Former prime minister Andreas Papandreou, of the Panhellenic Socialist Movement (PASOK), was the first modern Greek leader to visit Beijing in 1986, followed by then Chinese premier Zhao Ziyang’s visit to Athens. Warmer relations followed. The hosting of successive—and successful—Olympics in Athens (2004) and Beijing (2008) brought the two governments even closer. For years, China had to make its first organized Olympics the most symbolic international event ever staged as part of the country’s renaissance. As the original Olympic nation, Greece was keen—and certainly flattered—to cooperate with China on this issue.

Around 2006, then prime minister Kostas Karamanlis’s conservative government decided to liberalize port services to boost competitiveness. China quickly took a commercial interest in the Port of Piraeus, one of the Mediterranean Sea’s best located harbors, with connections to the Near East, Southern Europe, and North Africa. That same year, Karamanlis visited China and the two governments agreed to enter a dialogue “to provide facilitation for the cooperation between administrators of port affairs as well as other administrators in transportation, security and port building in the two countries.”8

It did not take long for the Chinese state to purchase Greek bonds worth some $6 billion after the 2008 financial crisis. China also expressed interest in various infrastructure projects—especially in the Greek maritime sector, relevant to its own maritime global strategy as well as trade interests toward the European continent. Since the Hu Jintao era (2002–2012), China had been planning to become a strong maritime nation; the conveniently located Piraeus Port was a logical hub for Chinese shipping activities and trade in the region.

In November 2008, the Greek state reached a concession agreement for Piers 2 and 3 with the port management division of state-owned China Ocean Shipping Company (COSCO)9—at the time the world’s seventh-largest container shipping company.10 The state-controlled Piraeus Port Authority (PPA) and COSCO agreed to a thirty-five-year lease for the concession of Piers 2 and 3. Eight years later, a $431 million investment led to COSCO becoming the majority shareholder of the PPA, with 51 percent of the stock listed as of April 2016 and a commitment for further investments. In the meantime, the financial crisis had brought China and Greece even closer as the Southeastern European country was steered by the international troika of creditors—the European Commission, the European Central Bank, and the International Monetary Fund—to accept massive financial support through three successive bailout agreements.

To cure Greece’s financial woes, international creditors imposed the privatization of state assets in addition to major structural reforms and belt-tightening. Despite the Greek electorate’s deep frustration over the latter, the Syriza-led left-wing coalition elected in 2015 had no choice but to follow suit.11 This was also the case regarding the Piraeus agreement.12 De hecho, el gobierno de coalición de izquierda se dio la vuelta y optó por jugar la carta de la inversión en China, tal vez incluso con más fuerza que su predecesor. Por ejemplo, el entonces primer ministro Alexis Tsipras sorprendió a sus homólogos europeos en julio de 2016 cuando bloqueó una declaración de la UE que apoyaba la decisión de la Corte Internacional de Arbitraje de fallar en contra de China en un caso presentado por Filipinas con respecto al Mar Meridional de China.13 Un año después, diplomáticos griegos bloquearon otra declaración de la UE en las Naciones Unidas (ONU) que criticaba el empeoramiento del historial de derechos humanos de China. La decisión de Tsipras fue descrita como un movimiento oportunista (o tal vez como una herramienta de negociación con Beijing) por los aliados y comentaristas occidentales.14

Sobre el terreno, el acuerdo de COSCO en El Pireo no era una conclusión inevitable. La compañía china fue recibida inicialmente en los muelles con pancartas que decían "COSCO go home" exhibidas a lo largo de la costa y una huelga de noventa días de trabajadores portuarios por parte de los sindicatos portuarios. Los accionistas chinos, en respuesta, adoptaron un perfil deliberadamente bajo. Durante muchos años, el puerto había sido desgarrado por disputas laborales, ya que la tasa de desempleo de Grecia alcanzó el 70 por ciento en los suburbios del suroeste de Atenas, en parte debido al mal desempeño del puerto de El Pireo. Bajo la gestión de COSCO, la fortuna del puerto experimentó un cambio impresionante. La compañía china comenzó a renovar la infraestructura, introdujo más eficiencia y mejoró el estilo de gestión de la autoridad portuaria, lo que contribuyó a un mayor tráfico. Entre 2010 y 2012, el tráfico de transbordo se triplicó con creces.15 Según Sotirios Theofanis, ex director ejecutivo de la Autoridad Portuaria del Pireo S.A., "la razón principal del aumento del tráfico fue la decisión estratégica de China de desviar el tráfico de transbordo a El Pireo".16

Entre 2009 y 2018, el volumen de contenedores de El Pireo pasó de 0,8 millones de contenedores a 4,9 millones (medidos en unidades equivalentes de veinte pies, la unidad estándar de capacidad de carga), con un aumento del 190 por ciento desde 2017.17 Bajo la gestión de COSCO, el puerto de contenedores saltó al puesto número seis en Europa en 2018,18 y el número treinta y dos en el ranking mundial de puertos de 2018 de Lloyd's List.19 En 2016, COSCO formó la llamada Alianza Oceánica con el gigante naviero francés CMA CGM, la Orient Overseas Shipping Line de Hong Kong y la taiwanesa Evergreen Line, que se racionalizó para pasar su tráfico a través del puerto del Pireo.20 Las grandes empresas, como Hewlett-Packard (HP), Sony o (menos sorprendentemente) los fabricantes chinos de equipos de telecomunicaciones Huawei y ZTE, comenzaron a reubicar partes de sus actividades de distribución de otros puertos europeos a El Pireo. En 2013, un acuerdo firmado entre HP, la compañía ferroviaria griega, y COSCO llevó al fabricante de productos electrónicos a enviar mercancías como computadoras portátiles, computadoras de escritorio e impresoras a Grecia, y luego entregarlas en tren o en barco desde El Pireo a otros puertos en los mares Negro y Mediterráneo.21 HP, que había estado utilizando El Pireo como una de sus principales puertas de entrada de carga marítima para el sudeste y el centro de Europa, esperaba ahorrar costos a largo plazo utilizando el transporte ferroviario desde El Pireo para su distribución a los Balcanes, Hungría y la República Checa.22 Pero un factor crucial, el ambicioso proyecto ferroviario de China que une Budapest con Belgrado y, en última instancia, con El Pireo, ha tardado mucho más en materializarse de lo planeado originalmente.

EL PUERTO EN EL CENTRO DE LA RELACIÓN SINO-GRIEGA

Durante los últimos doce años, la relación entre China y Grecia ha girado en torno al Puerto del Pireo y el papel que Beijing espera desempeñar en la región mediterránea bajo la BRI. Desde que COSCO puso un pie oportunistamente en Grecia, la inversión china allí ha sido una fuente de orgullo en los medios de comunicación chinos.

Bajo el acuerdo de 2016, Grecia acordó otorgar a COSCO una participación adicional del 16 por ciento del PPA para 2021, siempre que la compañía china completara inversiones obligatorias por valor de $ 342 millones. Estas inversiones adicionales incluirían un nuevo muelle de cruceros, una zona de reparación de buques, un centro logístico y una terminal de automóviles, así como instalaciones hoteleras para atraer a un mayor número de turistas chinos.23 Ese aspecto de hospitalidad ha sido un elemento importante del plan chino, especialmente desde que se establecieron los vuelos directos de Beijing a Atenas en Air China en 2017. Sin embargo, durante la pandemia de COVID-19, todos los vuelos quedaron en tierra. Los dos gobiernos ahora están buscando con cautela relanzar oficialmente el turismo chino en Grecia en 2022. Es probable que el operador de viajes Thomas Cook, propiedad de Fosun International, con sede en Shanghai, desempeñe un papel importante si Grecia permite que los cruceros chinos regresen a la zona. El turismo, que se ha visto gravemente afectado desde principios de 2021, sigue siendo una industria importante para Grecia.

Pero los problemas clave están en otra parte. A mediados de 2021, según el Ministerio de Transporte Marítimo y Política Insular de Grecia, solo el 58 por ciento de las inversiones obligatorias han sido completadas por COSCO y su subsidiaria, Piraeus Container Terminal S.A. (PCT). En particular, algunas de las inversiones, incluida la nueva terminal de cruceros, que será construida por un contratista griego local seleccionado por COSCO a través de una licitación, se beneficiarán de los fondos estructurales europeos.24 Políticos locales, armadores y sindicatos se han manifestado contra COSCO. En la vecina ciudad de Perama, que se beneficiaría de la mejora de la infraestructura y el equipo, hay decepción de que el área haya permanecido como un remanso.25 Las empresas de reparación naval se han opuesto firmemente al plan de COSCO de construir un nuevo astillero en Perama,26 que no formaba parte del contrato original y podía perjudicar a los astilleros griegos existentes.

Los armadores, que proporcionan barcos fletados a las líneas navieras chinas y son grandes clientes de la industria de la construcción naval china, se quejan del acceso al mercado en la propia China. "Por un lado, COSCO está desesperado por mejorar su huella en el sudeste de Europa, por otro lado, no existe la igualdad de condiciones en China", dijo un operador naviero, quien destacó "la arrogancia de los funcionarios de COSCO".27 Los armadores griegos dicen que todavía controlan una flota del doble del tamaño de la de China y no ven una inversión de roles en el futuro cercano. Aún así, en 2017, la Administración Oceánica Estatal de China (SOA) enfatizó que el producto interno bruto (PIB) marítimo del país representaba aproximadamente el 10 por ciento del PIB general de China.28 Por lo tanto, no es una sorpresa que hacer de China una nación marítima haya sido un objetivo nacional desde el XIX congreso del Partido Comunista, que elevó la construcción de una "nación marítima fuerte" al "más alto nivel".29

Tomás de Waal
De Waal es miembro senior de Carnegie Europe, especializado en Europa del Este y la región del Cáucaso.

Unos meses después de que el partido Griego Nueva Democracia ganara las elecciones de 2019 bajo Mitsotakis, los medios griegos informaron de un número creciente de temas controvertidos con respecto a la inversión de COSCO. Estos incluyen la ausencia de una evaluación de impacto ambiental para la construcción de la nueva terminal de cruceros, y los riesgos de que la transferencia de escombros en la ciudad pueda causar congestión y contaminación.30 Otro tema de discusión ha sido la propuesta de COSCO de establecer el Sistema de Comunidad Portuaria Helénica (HPCS), una plataforma electrónica de gestión multifunción para el Puerto de El Pireo. Después de acaloradas discusiones, el Ministerio de Transporte Marítimo griego introdujo una nueva ley que reemplaza HPCS con el Sistema Nacional Integrado de la Comunidad Portuaria de propiedad estatal.31

The Piraeus Chamber of Commerce and Industry, representing local businesses, appears to have become highly skeptical of COSCO. There are growing concerns that part of the shipbuilding orders might move to Chinese shipyards.32 During a Piraeus city council special session on November 20, 2020, shipowner Vangelis Marinakis expressed his strong opposition to the Chinese company’s extension plans, stating bluntly that “Piraeus can expect no benefit from COSCO.”33 He was supported by several political parties, along with environmental groups who have rallied against the company’s plan to build a fourth pier on reclaimed land. Later, China’s ambassador to Greece, Zhang Qiyue, tried to save the deal by stepping in for COSCO. In March 2021, however, she was promptly recalled to Beijing—apparently due to the lack of progress.34

Instead of building a new pier, COSCO might now try to invest in additional equipment to increase handling capacity in Pier 1 to maintain Piraeus’s ranking for the next few years.35 It appears local actors have also refused to pay entry fees imposed by the COSCO-run PPA for commercial vehicles, even though these were part of the original global concession agreement between COSCO and the Greek government. “Currently, there is no fertile ground for an extension of Chinese presence,” said Rui Pinto, deputy chief executive of the Thessaloniki Port Authority.36 COSCO’s plan to build a car terminal in an area used by local ship-repair businesses has also encountered heavy criticism from locals, who fear it would be contrary to the interests of Greek shipyard owners.

Current tensions reflect the fragility and emotional aspects of the Piraeus deal in the eyes of both the shipping industry and local communities. But as Greek resistance to the Chinese presence rises (sometimes influenced by outside players such as the EU or the United States), Chinese media sources consistently insist on the “Sino-Greek engagement over long-term Chinese investment,”37 reflecting a true contrast between Greece’s and China’s assessment of their bilateral relationship. Recent media coverage on each side could hardly be more different.

BEYOND PORTS

Though port business may be highly profitable, it is also very competitive in the region. Other Mediterranean harbors have started to catch up, beginning with Morocco’s Tanger Med (which now ranks higher than Piraeus38) and Spain’s Valencia, not to mention the formidable alliance operation between Antwerp and Zeebrugge farther north.

China has attempted other inroads into the Greek market. For example, another port operator, CMPort—part of the China Merchants conglomerate—has been involved in Thessaloniki, Greece’s second-largest port, through Terminal Link, a joint venture with France’s CMA CGM.39 The former chief executive of Terminal Link, Boris Wenzel, also invited CMPort to install its terminal operating system at Thessaloniki.40 However, because the two Greek facilities are managed as completely separate businesses, they do not constitute a global investment strategy on the part of China.

Besides Piraeus and Thessaloniki, China’s business presence in Greece has stumbled. One of China’s largest commercial banks, Bank of China, proudly opened its Athens branch in late 2019, pledging to make greater contributions to the BRI by providing “professional and efficient financial services for Chinese ‘go global’ companies and use financial power to build a bridge for cross-border business between Greece and China.”41 The banking business, however, has flagged, in line with the global economic slowdown. Like many Chinese institutions, Bank of China is playing a long-term game and hopes to benefit from deeper interactions between Greece and China. For the time being, though, it has been a low-key operation—quite the opposite of China’s original goal.

Several Sino-Greek business deals have also been interrupted, if not outright canceled. In 2016, COSCO surprisingly stayed out of the race to privatize Greece’s railway operator TrainOSE, despite Premier Li Keqiang’s earlier interest. In 2018, the National Bank of Greece severed its negotiations with Gongbao for the sale of Ethniki Asfalistiki, the country’s largest insurance company.42 Five years after signing a $200 million investment agreement, real estate and financial group Fosun International withdrew in 2019 from a massive project to develop the former Hellenikon airport, apparently due to “years of delays caused by red tape and the country’s economic crisis.”43 Tellingly, the Chinese consortium was not entitled to bid for a gambling license that was eventually awarded to the U.S.-based Mohegan group and Greek construction company Gek Terna. More recently, in January 2021, the Greek government did not allow China’s State Grid (which already held a 24 percent stake in Greece’s high-voltage Independent Power Transmission Operator) to bid for a 49 percent stake in the country’s mid/low-voltage distribution network operator. Another Chinese state-owned enterprise, South Power Grid, was also disqualified. Lastly, the Greek government is leaning strongly toward non-Chinese suppliers for 5G technology. In March 2021, Cosmote, the largest Greek mobile service provider, selected Swedish telecommunications company Ericsson as its exclusive 5G equipment supplier. Greece also joined the U.S.-led Clean Network, an initiative on 5G launched by former president Donald Trump’s administration.44

HIGH HOPES FOR CHINESE TOURISTS

Despite COSCO’s long-term plan, which should in principle serve as an engine for potential Chinese cruise visitors, Greek tourism sector professionals have had mixed feelings. Of the 28 million foreigners who visited in 2019, the vast majority actually came from Europe and the United States—compared to only 200,000 from China.45 The ongoing COVID-19 pandemic has halted travel, and it is likely that Chinese tourists will not be back for some time. The island of Santorini, a huge draw for Chinese tourists, has been badly hit by the absence of international inbound flights. Santorini’s hotels have remained mostly empty, and it is unlikely that the newly branded “Greece-China Year of Culture and Tourism 2021” will bring Chinese tourists back to Greece in significant numbers anytime soon. Similarly, Sino-Greek cultural activities appear to be very limited, according to media coverage studied by the Institute of International Economic Relations (IIER) through 2020 and early 2021.46 This does not bode well for China’s image among the general public.

GOLDEN VISAS

It has been almost a decade since Greece (along with nearby Malta and Cyprus) started luring individual Chinese investors willing to invest about $290,000 or more in a Greek property against the promise of a renewable five-year residence permit, which in theory allows free travel throughout the twenty-seven EU states.47 Foreigners who have spent at least seven years in Greece are able to use their so-called golden visa to obtain a much-coveted EU passport. As of November 2020, 70 percent of golden visa holders were Chinese citizens (5,504 out of 7,903 in total)—and numbers continue to rise. In 2019, foreigners invested some $1.7 billion in the Greek real estate market,48 including Chinese buyers who were able to defy China’s strict capital control rules.49 Following a dire two years due to COVID-19, the Greek government will encourage new schemes in areas with fewer visitors, such as western or northern Greece.50

Meanwhile, the EU continues to criticize Greece’s golden visa program. European Commission President Ursula von der Leyen warned in her September 2020 state of the union speech that “European values are not for sale.”51 In addition, local analysts have pointed out that Chinese media almost never mention the golden visa scheme. One explanation for this discrepancy could be that a growing number of Chinese applicants for visas in Greece are effectively communicating their intention to leave China.52 The Chinese government would not want that to be discussed openly.53

CHINA’S DEDICATED SOFT POWER STRATEGY

Before the pandemic, many Greeks seemed grateful for China’s help. The combination of tourists, investors, merchants, and some cultural events—such as the Ancient Civilizations Forum in 2017 or the annual meeting of European Confucius Institutes in 201854—initially helped China win over the Greek public, or at least some Greek elites. This narrative no longer holds. The Greek public seems more interested in real action and jobs.

In 2016, China launched the first ever Business Confucius Institute at the Athens University of Economics and Business, with the clear aim of building stronger business ties between the two countries. There are also classic Confucius Institutes based at the Aristotle University of Thessaloniki and the University of Thessaly in Larissa. Both are mainly focused on Chinese language studies and avoid controversial issues such as Taiwan or Xinjiang. Much like in other European countries, China-backed organizations—such as the Greece-China Association and the Hellenic-Chinese Chamber—promote business ties between the two countries. Close Chinese contacts with Greek political parties have been irregular, apart from the hardline Greek Communist Party (KKE), which said in 2010 that “it continues to maintain bilateral relations with the [Communist Party of China].”55

Collaboration has also extended to other fields. In 2018, China and Greece signed an action plan for scientific and technological cooperation.56 A Chinese AI application development company, DeepBlue Technology, announced it would start an innovation channel between Greece and China.57 Other impactful plans include a Center for China Studies jointly run by the Aikaterini Laskaridis Foundation and the Chinese Academy of Social Sciences, and programs to attract more Chinese students in the years to come. The University of the Aegean has even launched an online facility for Chinese-language classes.58

The BRI is, of course, a permanent feature of China’s presence in Greece. In 2019, then prime minister Tsipras also felt the need to join the 17+1 format, a group of Southeastern, Central, and Eastern European countries that meet annually with top Chinese leadership (although the current Greek government has been much less enthusiastic than its predecessor).59 In the past, Greek officials have often taken part in BRI activities both in Greece and in China. Tsipras himself attended two Belt and Road forums in Beijing, in 2017 and 2019.60 During a separate official visit to China, he declared that Greece intended to “serve as China’s gateway into Europe.”61 His successor, Mitsotakis, has been more subdued, although he hosted Xi in 2019 and has said that he hopes for a “new era in Greek-Chinese relations.”62 Wary of regional tensions with Turkey, the Greek prime minister has also realized how much Greece needs the United States and the EU; China has little to offer in terms of security.

CHINA’S GROWING MEDIA PRESENCE

In terms of media presence, China’s Xinhua News Agency established a bureau in Athens years ago, employing some Greek stringers. It has also engaged in an official exchange with the state-owned Athens-Macedonian News Agency (AMNA) since 2016. The China Economic Information Service, an affiliate of Xinhua, also signed an agreement with AMNA to set up a Belt and Road Economic Information Partnership. In addition, Chinese media outlets have cooperated with Greek newspapers like Kathimerini, which has an English edition and has frequently published editorial dispatches from Xinhua. Greek state television and China’s National Radio and Television Administration signed a memorandum of understanding in late 2019.63 Like many of their colleagues in Southeastern, Central, and Eastern Europe, Greek journalists have been frequently invited to BRI events in China. It is important to note, however, that the Greek public has not benefited from independent coverage of Chinese news because Greek media do not have their own correspondents in China. All in all, that means Greece has been vulnerable to Chinese media narratives for some years. It will remain so, unless it invests in specialized coverage of China or Chinese-European relations.

Through its local presence, Chinese media has been offering an interesting narrative to the Greek public.64 First, it presents China as a “benign superpower, which is promoting a new set of harmonious international relations, based on rapid socio-economic development and ‘win-win cooperation.’” But it also focuses specifically on the Sino-Greek relationship: according to a recent IIER report, China “wants to be seen as a true friend that offers generous assistance to Greece.” Through 2020, Chinese media reports countered any accusations over Beijing’s responsibility for the pandemic with examples of the aid it has delivered to Greece.

THE IMPACT OF CHINESE INFLUENCE IN GREECE

Ever since the 2004 Athens Olympics (and especially since COSCO took over management of Piraeus), China has been courting the Greek public—with some success. Unlike other European countries, Greece has not been the target of China’s aggressive wolf warrior diplomacy (named for a popular Chinese blockbuster movie).65 Again, this softer diplomacy shows that China is playing a long-term game in Greece. As a sign of goodwill, Beijing has tried to remain accommodating and uncontroversial on its embassy’s Facebook and Twitter accounts. The Piraeus Port Authority has also been running soft communication campaigns through its own social media outlets. Although China’s image could be considered neutral in Greece, this moderate approach has yielded mixed results according to several recent surveys of the Greek public.

First, the Athens-based IIER determined that China’s soft power strategy toward Greece was largely successful between 2008 and 2018. According to its report, IIER found that “the general public assesses the relations between the two countries in a very positive light: in December 2016, a vast majority of the respondents (81.9%) qualified them as ‘friendly’ and ‘relatively friendly.’” The same IIER report also found that most Greeks appeared to support closer relations with Beijing regarding the economy (83.5 percent), politics (71.1 percent), and culture (87.5 percent).66 A second study, by the Pew Research Center in 2019, found Greeks, along with Hungarians, to be perhaps the most China-friendly Europeans: 26 percent said the world would be better with China as a leader, while 46 percent said the world would be better with the United States as a leader.67 For comparison, that same year, only 14 percent of respondents from Sweden favored China; 76 percent had more confidence in the United States.

The year 2020 appears to have been a turning point for China’s local perception, not only due to COVID-19 but also because of China’s clumsy attempts to fashion itself as a benefactor. Despite its overtures, the vast majority of medical supplies from China during 2020 were commercial orders rather than gifts. In April 2020, a survey conducted by Kapa Research, a Greek pollster, found that 44 percent of Greek respondents blamed China for the pandemic68—a claim strongly rejected by China’s ambassador in Athens.69

CHINESE OFFICIAL VISITS

Since 2008, visits by senior Chinese officials have multiplied: former president Hu Jintao attended the COSCO signing ceremony at Piraeus in 2008, prime ministers Wen Jiabao and Li Keqiang both paid official visits in 2010 and 2014, respectively, and the regular flow of visitors includes deputy prime ministers, ministers, vice ministers, and the heads of state-owned companies. It is no surprise that Chinese Politburo member and foreign affairs supremo Yang Jiechi’s visit to Athens in September 2020 received more coverage in the Chinese media than in the Greek press. Tellingly, Yang—who was on a diplomatic tour including Myanmar and Spain—called for building Piraeus into a world-class port.70

Chinese media’s positive spin on Sino-Greek relations does not often target the general Greek public. Instead, it’s aimed at business leaders, government elites, or, occasionally, a domestic Chinese audience, like when National Defense Minister Wei Fenghe visited Athens in March 2021. Although possible joint drills and training were discussed, it is highly unlikely that Greece, a NATO country, will engage in military exercises with the People’s Liberation Army (PLA). Rather, the goal of such a visit is to show to China’s domestic audience that Beijing has international friends willing to cooperate.71

During his own prominent visit in November 2019, Xi referenced COSCO’s presence as a “dragon’s head.”72 The goal, he said, is to make China an even larger player in the Mediterranean. Building on the narrative of kinship between two old civilizations,73 Chinese media reported that Xi and Greece’s then president Prokopis Pavlopoulos had agreed to “contribute the wisdom of ancient Eastern and Western civilizations to building a community with a shared future for mankind”74—this kind of discourse has been well-received among Greek elites.

CONCLUSIONS

Looking at Chinese maps of the BRI, Piraeus is always at the center of the Maritime Silk Road. After all, the construction of a strong maritime power has become a national goal for China, and the Chinese position in Greece is at the forefront.75 Before the pandemic, China initially saw the Piraeus deal as a “historic opportunity” for a declining European economy to “return to the centre of the world through the revival of Eurasia.”76 Like Hungary or several countries in the Balkans, Greece was chosen to be part of a Chinese sphere of influence on the European continent. Thanks to major Chinese investments, that seems to still be a priority.

The outcome of such a policy, however, remains unclear. First, Greece has been busy handling its regional disputes with neighboring North Macedonia and, especially, Turkey. It needs NATO and the EU’s diplomatic and military support to counter Turkey’s militarization of the region surrounding Cyprus. Second, as is often the case with Chinese investment projects, the reality has differed from the initial proposition. “In the grand scheme of things . . . China invested in the port of Piraeus at a time when nobody was interested and it has been a successful investment,” Mitsotakis said in a recent interview. “But,” he went on to say, “Greece is not particularly dependent on Chinese investment, when I look at the map of Foreign Direct Investment, certainly I look at countries that are interested in investing in Greece.”77 Problems continue to accumulate around the Piraeus deal, and locals are more sensitive and angrier than expected about the benefits—or lack thereof—from COSCO’s financial involvement and oft-overbearing presence.

For China’s ambition as a new superpower, the stakes are running high. Despite close contacts with both Russia (through the Russian Orthodox Church) and China, Greece remains firmly anchored in traditional Western institutions and alliances. Finally, the pandemic seems to have engendered the same sense of disappointment in the Greek public as in other Southeast European nations vis-à-vis China. Athens may still have a long way to go before becoming the dragon’s head. Soft power, official visits, and expansion plans have not managed to fill that gap and—for the time being—the Greek people do not want to trade their independence and European ties simply to comply with the grand strategy of Xi’s China. What is clear, though, is that China has engaged in a long-term game regarding Greece, which—despite recent turnarounds—Beijing still views as a valuable hub and partner in Europe. The way China has engaged with the country for almost two decades demonstrates clear commitment to its long-term plan. Both the EU and the United States may have managed to keep Greece on their side for now, but the future remains uncertain if China continues to pursue a strong and ambitious maritime agenda in the Mediterranean Sea and beyond.

HUNGARY: A WILLING CHINESE PARTNER IN THE HEART OF EUROPE

Hungary, having embraced closer ties with China in the early 2000s, is something of an outlier in the EU. It has become one of the most vulnerable countries in the region for Chinese influence under the government of current Prime Minister Viktor Orbán. Hungary’s vulnerability is due to relatively weak state institutions that are largely controlled by an increasingly authoritarian ruling party and the limited voice of civil society. The ease with which Beijing has facilitated elite capture plays an important part in China’s ability to cultivate key decisionmakers, who, in turn, are eager for better relationships with their Chinese counterparts. Orbán, who personally directs the country’s policy toward China, has been in power for over a decade and has troubled relations with his counterparts from Hungary’s traditional Western partners.78 Reportedly, Orbán views the Chinese government—which prioritizes the principles of state sovereignty and nonintervention in the domestic affairs of its diplomatic partners—as an alternative to the liberal West, where his counterparts have been highly critical of Hungary’s democratic backsliding.79 He and other prominent Hungarians speak warmly of China’s economic development model.

For Budapest, Beijing became a key partner for diversifying its economic policy away from Europe after the 2008 global financial crisis. Over time, Orbán has begun to shift Hungary’s foreign policy strategy toward Beijing as well. The Hungarian government uses China as leverage with Brussels and to posture to Euroskeptic sentiment at home. Under Orbán, Hungary has positioned itself as a regional hub for China in Central and Eastern Europe, although the Chinese financial flows to the country have been far less than expected just a few short years ago. For Beijing, Hungary is a relatively open door in Europe, given the Orbán government’s embrace of China as a diplomatic and economic interlocutor and his search for partners in advancing his illiberal model of governance at home. For the Chinese leadership, he is a useful interlocutor to help deflect international criticism of and stymie European consensus on Chinese human rights violations, particularly in Hong Kong and Xinjiang.

State or government-friendly oligarchic control over the media stymies alternative views of Beijing, which enables leaders in both Budapest and Beijing to hail the relationship as a win-win. Positive media coverage helps compensate for the limited impact that Chinese soft power projection has had thus far in the country. Recent polling suggests that Hungary’s Western partners are viewed far more positively than China among average citizens—a finding that is in line with neighboring Poland and the Czech Republic.80 Hungarians harbor slightly negative views of China’s international clout and see Beijing primarily as a source of financing. China’s efforts to cultivate more positive views of itself among society at large—through public diplomacy such as Confucius Institutes or sister-city relationships—have largely fallen flat. Nonetheless, the positive top-down media coverage of China helps compensate for the limited impact of Beijing’s soft power efforts, particularly among Orbán’s key constituencies.

A BRIEF HISTORY

Budapest’s outreach to Beijing is not new. Like many former Warsaw Pact countries, Hungary formally recognized the People’s Republic of China in October 1949. Unlike other countries, however, both Hungary and China marked the seventieth anniversary of that diplomatic recognition with great fanfare in 2019.81 Relations ebbed and flowed during the Cold War depending on the ideological winds emanating from both capitals.82 Hungary was a pioneer of democratization in the Eastern bloc. The ruling Hungarian Socialist Workers’ Party surrendered power in October 1989, a month before the Berlin Wall came down.

After the end of the Cold War, the trajectories of Hungary and China quickly diverged for about fifteen years. Eager to shed all remnants of the country’s communist past, Hungary focused on integrating with the West and had little interest in China. Orbán and his right-wing Fidesz party, which originated in opposition to the communist party, ironically criticized the Chinese Communist Party and its human rights record in the 1990s. During his first term as prime minister (1998–2002), Orbán met with the Dalai Lama, creating a spat between the two countries.83 Yet since returning to office in 2010, he has avoided antagonizing Beijing with similar engagements or criticizing China’s human rights record.84

The geopolitical and geoeconomic shifts of the past twenty years facilitated Orbán’s move closer to China. By the mid-2000s, around the time that Hungary joined the EU, Beijing began courting the countries of Southeastern, Central, and Eastern Europe. Chinese leaders saw new EU members as potential entry points into the union as a whole.85 These countries were close to lucrative markets farther west and increasingly integrated into pan-European logistics and supply chains.86 Yet it was far cheaper to do business in the region, where labor costs were lower and regulations less stringent. The lack of transparency in Orbán’s Hungary has since helped facilitate state capture, which is exacerbated by Hungary’s lax attitude toward investment screening and its willingness to skirt EU requirements on public tenders. Hungarian elites’ vulnerability to Chinese economic influence arises in large part from their eagerness to cooperate with Chinese investors for individual gain.87

However, it was Hungary’s socialist government, led by Péter Medgyessy, that first embraced Beijing in the mid-2000s, facilitating the first wave of Chinese economic investment in the country.88 Medgyessy today remains an advocate of engaging China. His long track record with Beijing dates back to his time as a minister in the pre-1989 communist government. He has continued to visit the country in his post-government career, frequently highlighting the country’s governance economic models in public speeches in China.89 His praise reflects consensus across the Hungarian political spectrum of China’s importance as a trade and investment partner.90 The bulk of early Chinese investment in Hungary during Medgyessy’s time consisted of small businesses in the trading and service sectors geared toward selling Chinese-produced goods.91 With time, however, multinational Chinese firms—including Bank of China, Huawei, Lenovo, Wanhua, and ZTE, among others—came to see the country as a stepping-stone for more ambitious endeavors across Europe.92

ORBÁN’S PIVOT

Orbán’s embrace of China is twofold. On the foreign policy front, it is part of his broader effort to enhance his leverage with the European Union. A country like China attaches few strings to its diplomatic and economic engagement when it comes to governance, human or labor rights, debt, or environmental issues—all areas where Orbán’s government has problematic track records. On the domestic front, engaging China is intended to gain economic assistance, which was seen by many Central and Eastern European countries as vital after the 2008 global financial crisis. Some Chinese investments, such as the controversial and costly plan to build a new rail line between Budapest and Belgrade, have been handed to Hungarian oligarchs with close ties to the government. The turn toward China helps Orbán play to Euroskeptic sentiments in Hungary, by showing his own citizens that the country has alternatives to the EU—which has helped the populist leader consolidate his hold over Hungarian politics. Orbán uses outreach to Israel, Turkey, and Russia for similar purposes.

Upon returning to office as prime minister in 2010, Orbán launched his Eastern Opening policy to reduce Hungary’s dependence on the European Union and Western financial institutions, which impose strict conditionality on debt relief. The Eastern Opening is Orbán’s effort to rebalance Hungary’s foreign economic policy by engaging with partners to Hungary’s east, primarily China but also Azerbaijan, India, Japan, Russia, Singapore, South Korea, and Turkey. Orbán’s pivot to the East has been accompanied by his increased use of a so-called Eurasianist discourse, intended to reposition Hungary as a Eurasian rather than a completely European country.93 Orbán’s Eastern Opening sparked a flurry of business and commercial exchanges between Hungary and China, as well as high-profile diplomatic engagements with lofty hopes that it would jump-start the country’s troubled economy. The Orbán government’s efforts to reach out to other Asian powerhouses, however, have been far less successful.

Hungary has become one of Beijing’s strongest advocates within the EU. It was the first EU country to sign onto Beijing’s BRI. Since 2012, it has also been a member of what is now called the 17+1 framework; it hosted the format’s annual summit in Budapest in 2017. Budapest today enjoys a prominent role in the group. In 2017, Budapest and Beijing upgraded their relationship to a comprehensive strategic partnership94—largely a symbolic status that many other countries enjoy, but one that highlights the senior-level attention Hungary receives from China despite its small size, limited global stature, and relatively minor economy. Budapest’s importance to China has increased in recent years as other Central and Eastern European countries, particularly EU members, have soured on Beijing due to unfulfilled expectations or political shifts at home. Unlike some of his regional counterparts, Orbán attended the virtual 17+1 summit in 2021, praising Xi personally for the assistance China has provided to Hungary during the COVID-19 pandemic.95 China’s Defense Minister Wei Fenghe visited Budapest in March 2021 with a public message condemning Western sanctions against China over Beijing’s human rights violations in Xinjiang. High-level visits with Chinese leaders similarly help offset Orbán’s growing diplomatic isolation from Hungary’s traditional Western partners over the country’s own democratic backsliding.96

It is primarily Orbán’s longevity in office that has helped keep Budapest firmly in line with Beijing and eager to avoid public fights with China, as one Hungarian interlocutor described in a private workshop organized by Carnegie. This was particularly evident when Michael Kovrig, a dual Hungarian-Canadian citizen, was arrested on trumped-up charges related to a Canadian-Chinese dispute over the detention of Huawei’s chief financial officer, Meng Wanzhou, in British Columbia.97 Unlike Canada, Hungary appeared eager to avoid any public spat with Beijing and handled Kovrig’s case as a relatively low-level consular case, effectively outsourcing the issue to Ottawa.98 Hungarian officials in Beijing even avoided attending a public protest by the Western diplomatic community outside Kovrig’s trial. All of this suggests Budapest simply seeks to avoid alienating Beijing in public whenever possible.

MIXED ECONOMIC RESULTS OF HUNGARY’S PIVOT TO CHINA

The bulk of Chinese investment in the country under Orbán has not met expectations, although the flurry of recent high-profile projects could change that in coming years. China’s most successful projects in Hungary predate or coincide with Orbán’s 2010 return to office. China’s Wanhua Chemical Group, for example, is the largest investor in Hungary and an early symbol of the Eastern Opening policy’s success after the group acquired BorsodChem, a chemical plant in northern Hungary, for about $1.7 billion in 2010. The deal was formally signed by Orbán’s predecessor, but the actual investments occurred after he took power again. Additional cash flows to modernize the plant brought the total investment up to around $2.2 billion. The purchase positioned the Chinese company as a top producer of polyurethane materials in Europe and enhanced its role as one of the world’s prominent chemical producers—clearly a win for Wanhua and China.99 Wanhua’s acquisition of BorsodChem accounts for about 60 percent of cumulative direct and indirect Chinese investment in Hungary to date (roughly $3.7 billion), which suggests Chinese investment is lopsidedly concentrated in a few key industries and corporations.

Two of the most prominent and controversial Chinese investors in Hungary today, Bank of China and Huawei, established themselves in the country even earlier. Bank of China’s Central and Eastern Europe regional headquarters is in Budapest, where it has served since 2003 as an intermediary to facilitate Chinese investment flows and fund infrastructure. Bank of China (CEE) established its own standalone Hungarian affiliate, Bank of China (Hungary), in 2014, which soon expanded into Austria and the Czech Republic as well.100 The Hungarian National Bank consented to Bank of China (Hungary) becoming a regional renminbi (RMB) clearing and settlement house.101 Hungary also was the first Central European country to issue RMB-denominated sovereign bonds in 2016.102

Huawei arrived in 2005, establishing its main European supply center in Hungary. From there, it distributes products across Central Asia, Europe, the Middle East, North Africa, and Russia. Huawei is the second-largest mobile vendor in the country, enjoying 30 percent market share in mobile phones and 20 percent in tablets.103 Huawei also owns several assembly plants and is keen to expand its presence in the country’s telecommunications and internet infrastructure development sectors as the country moves toward 5G (as does its rival, ZTE). Both are sensitive points for the United States and many of Hungary’s EU and NATO partners, although there is little public pushback against Huawei in Hungary itself.104 Furthermore, despite pressure from the Trump administration to curb Huawei’s activities, the Orbán government in 2020 announced the establishment of the company’s new research and development center in Hungary. 105

Although Hungary is the top destination for Chinese investment in Central and Eastern Europe, investment flows have slowed in recent years and are primarily focused on either infrastructure (like railways or dry ports) or acquisitions (such as hotels and assembly plants), creating few long-term sustainable jobs in new employment sectors.106 Solar energy is a promising new field for Chinese investment, particularly as Hungary strives to reduce emissions and comply with EU mandates on green energy. China’s National Machinery Import and Export Corporation is finalizing construction of a $120-million solar power plant in Kaposvar, first announced in 2019.107 Chinese officials continue to make grand promises of increased financial flows and the establishment of businesses in Hungary. Chinese firms are credited with creating roughly 15,000 jobs in the country,108 but that figure pales in comparison to companies from Europe, which remains Hungary’s most important trade and investment partner. Germany’s Bosch, for example, alone has 13,500 Hungarian staff members.109

TRADE AND INFRASTRUCTURE: LESS THAN MEETS THE EYE

Hungary is one of the most important trade partners for China among the members of the 17+1, but far less important among European countries as a whole. Multinational companies dominate Chinese-Hungarian trade with Hungarian subsidiaries of Western European conglomerates, like Audi, which exports Hungarian-made car parts to China.110 Trade turnover between China and Hungary has increased from $3.9 billion in 2005 to over $7 billion in 2018, with Hungary now purchasing mainly mobile phones, electronic equipment, and other consumer goods. Hungarian car parts and machinery constitute the country’s major exports. Tourism is a growing sector of cooperation, although the pandemic has paused travel between the two countries. Recently launched flights between Budapest and Shanghai and Chongqing have been suspended. Tourism likely will rebound after the pandemic. For a relatively small European country, Hungary also has a high number of diplomatic missions in China, with an embassy in Beijing and consulates in Shanghai, Chongqing, and Hong Kong. Hungarian interlocutors indicate Budapest has plans to open a consulate in Guangzhou, although those plans appear on hold for now.111 These facilities aim to promote trade, investment, and tourism. A series of official trading houses, established by China but run by prominent Hungarians, perform largely the same task, while also apparently helping to enrich their Hungarian figureheads.

Both Beijing and Budapest see the country as playing a role in the BRI, given its central geographic location in Europe. Thus far, however, the BRI has had lackluster results in Hungary. The most visible project under the BRI umbrella is the Budapest–Belgrade railway connection, first announced in 2013; the project has been long delayed in Hungary due to controversies over whether the Orbán government complied with EU regulations on issuing a public tender for its construction. Mired in corruption allegations and controversy for years, the Hungarian portion at last appears to be moving forward after Hungary signed a $1.9 billion loan agreement with China’s Export-Import Bank to cover 85 percent of the costs—the terms of which Budapest classified for ten years, allegedly as part of the loan agreement.

A second tender for the railway was awarded to a Chinese-Hungarian consortium consisting of China Railway Group Limited (China’s state railway company) and Opus Global, a holding company controlled by Hungarian businessman Lőrinc Mészáros, a long-time Orbán associate. This again highlights transparency concerns and the potential for corruption in a country where construction projects frequently go to friends and allies of the prime minister. Several Hungarian analysts also question the railway project’s long-term feasibility and profitability, noting the steep costs for construction and limited potential for cargo and passenger traffic.112 The purportedly unfavorable loan repayment terms will take decades or longer to pay off.113 These analysts, however, have few domestic platforms to convey these concerns. There appears to be greater awareness of these issues outside the country than within.

Given the country’s central location in Europe, both Beijing and Budapest highlight the new railway’s ability to link up with the planned Trans-European Transport Network,114 enabling Budapest to serve as a key freight forwarding center in continental Europe. Yet north-south cargo traffic between the Mediterranean and Hungary currently is minimal, and it is unclear whether demand will grow enough in the coming decades to justify large financial outlays, particularly because there is an existing rail line that could be modernized at far less cost.115

COVID-19’S IMPACT ON HUNGARIAN-CHINESE RELATIONS

The COVID-19 pandemic accelerated the already warm relationship between the Chinese and Hungarian governments. Hungarian officials did not follow the Trump administration in 2020 as it laid blame on Beijing for the pandemic, although some individual Hungarians certainly did.116 Roughly one-third of Hungarians in a recent poll claimed their perception of China deteriorated over the past year, despite Hungarian officials’ and government-friendly media’s frequent emphasis on the massive amounts of medical equipment, pharmaceuticals, and eventually vaccine supplies that China sent to Hungary.117 Both sides tout those shipments as symbols of close cooperation. That has helped push the narrative that China is part of the global solution to the pandemic, rather than to blame. Budapest, however, purchased most of these supplies, including large-scale orders of ventilators, pharmaceuticals, and other protective gear from China at far higher prices than other European governments and via offshore intermediaries.118 Much of the equipment remains unused.119

Hungary’s willingness to use Chinese vaccines became apparent by January 2021 as the EU struggled to authorize, procure, and rollout adequate supplies of vaccines across the bloc in a timely manner. Orbán was the first EU leader to authorize the emergency use of two Chinese vaccines, Sinopharm and CanSino, directly flouting Brussels. With one of the highest COVID-19 mortality rates per capita in the world in early 2021, Hungary began looking elsewhere for vaccine options. Orbán eventually relied on a multivector approach to sourcing vaccines, authorizing Indian- and Russian-made vaccines in addition to China’s vaccines and the EU-approved shots.120 Securing these vaccine supplies from a broad base of suppliers enabled the Orbán government, which is up for reelection in 2022, to highlight its image as a problem solver, while European politicians dithered and the continent entered another deadly wave of infections.121

Chinese vaccine purchases, however, have followed a similar pattern to COVID-19 mask and ventilator purchases.122 In March, the government announced it had acquired Chinese vaccines via a Hungarian intermediary company with a murky ownership structure, after Budapest waived public procurement requirements for the purchase.123 The end result again came at a far higher cost per Chinese dose ($37) than Western (roughly $2 to $15) or Russian vaccine counterparts ($10).124 Skirting public procurement mandates raised the ire of Orbán’s critics, although early on Hungary proved far more successful in inoculating Hungarians than the EU as a whole. In Hungary, 58.4 percent of people had received at least one dose and 28.7 percent had received two doses of a COVID-19 vaccine by May 7, 2021, according to EU statistics, whereas the EU average was just 33.3 and 11.8 percent, respectively.125

LIMITED CHINESE SOFT POWER

China’s media presence in Hungary is limited in large part because the Hungarian media generally takes a positive view of China, minimizing controversial issues like human rights or Beijing’s own struggles with the pandemic.126 Spreading favorable stories about China in state or government-friendly media helps bolster Orbán’s foreign policy achievements, mitigates Budapest’s growing diplomatic isolation from its traditional Western partners, and plays to Euroskeptic segments of the population, which constitute an important base of support for Orbán’s ruling Fidesz party.127 Fidesz voters generally are now positively inclined toward Beijing, a remarkable turnaround for a party with origins as an anti-communist movement. The country’s opposition-oriented and independent media outlets disseminate more negative content—touching on human rights issues like the plights of Tibet, Xinjiang, or Hong Kong—but they have a much smaller reach.

Both the Chinese embassy and Chinese businesses keep a relatively low profile in Hungary. The embassy rarely engages in formal public relations activity, although it does host a series of cultural events. There generally is also no need for aggressive wolf warrior diplomacy from Beijing due to little public criticism of China.128 Hungary hosts a growing list of Chinese cultural institutions, which now includes a think tank, five Confucius Institutes, several formal linkages with Hungarian universities, a bilingual school, a traditional Chinese medicine facility, and numerous cultural and friendship organizations. There also are now approximately 20,000 ethnic Chinese living in Hungary, some of whom arrived via a now-discontinued golden visa scheme—similar to that in Greece—that the Orbán government promoted from 2013 until 2017. The reach of this diaspora population and all these institutions, however, appears limited.

The Chinese Academy of Social Sciences established the China-CEE Institute in Budapest in 2017. The first Chinese-sponsored policy research institution in the region, its aim is to establish linkages with academic institutions across Central and Eastern Europe. It has a broad research mandate, covering political, social, technology, economic, and governance issues across the whole region, not just in Hungary.129 Many of its reports are authored by the same small group of European scholars, with Chinese managers and editors overseeing and financing their work. The institute’s social media presence remains weak, with only 175 LinkedIn followers and 400 Twitter followers, although the institute posts the same feed across all of its social media platforms.

Hungary’s main Confucius Institutes are located at Eötvös Loránd University in Budapest, the University of Szeged, the University of Miskolc, and the University of Debrecen. There is also a Confucius Institute for Traditional Chinese Medicine at the University of Pécs with a dual focus on Chinese language and traditional healing methods.130 All five institutes serve as libraries, language schools, and cultural hubs—generally places where Hungarians, especially youth, can gain greater exposure to Chinese film, art, history, calligraphy, and sports, as well as research and prepare for foreign educational opportunities in China. The Budapest center claims to reach approximately 2,000 people each year with its language programs (though it has provided no supporting evidence to justify that estimate). The Chinese Student and Scholars Association, an official Chinese student organization with branches across the world, exists in Hungary, although its various chapters do not appear very active.131 Despite this presence, overall knowledge of and interest in China appear to remain limited in Hungarian society. Instead, China has focused on cultivating potential future elites, often presenting them with prospective business or educational opportunities. Beijing offers study tours to Hungarian professionals, including journalists and academics, to learn about China, as well as lucrative scholarship programs for high school, college, and graduate school students. The alumni of these programs have gone on to advocate for closer political, commercial, and cultural ties.132

One alumnus is Levente Horváth, the Hungarian National Bank’s chief adviser on China, who graduated from Shanghai’s prestigious Fudan University and headed its alumni organization in Hungary.133 He has spearheaded ongoing efforts to create a Fudan campus in Hungary by 2024, which would be the first branch of a Chinese university in the EU.134 The impetus for Fudan’s expansion into Hungary was a 2017 financial training exchange, in which the Hungarian National Bank sent a delegation to Fudan.135 It was followed by the creation of a joint MBA program between Hungary’s Corvinus University and Fudan in 2019.136 Serious negotiations on the establishment of a full-fledged Chinese campus began that year,137 just as Central European University (CEU)—founded by Hungarian-born American George Soros in 1991138—was forced to move to Vienna after years of wrangling with the Orbán government over academic freedom, the university’s legal status, and Soros’s own criticism of the country’s democratic decline.139

If finished, Fudan’s Hungarian campus certainly will be well-positioned to enhance Chinese soft power, cultivate a rising generation of elites, and enhance educational linkages with Chinese academic institutions, as the CEU previously did with its U.S. counterparts.140 The Hungarian minister of innovation and technology has said that Fudan’s proposed Budapest campus could transform Hungary into a regional knowledge hub.141 While prominent universities opening up global campuses has become a lucrative business, construction costs for Fudan in Hungary are high. Currently estimated at roughly $1.8 billion, these costs far exceed recent annual state allocations for all higher education in Hungary (generally between $900 million and $1.5 billion142).143 The bulk of these costs (roughly $1.5 billion) will be financed through a loan from the China Development Bank to be repaid within fifteen years. The Hungarian state will fund the remainder, as well as donate a $2 million plot of land for the campus. The China State Construction Engineering Corporation—an entity sanctioned by the U.S. Department of Defense for alleged close ties with the PLA, and by the World Bank for corrupt practices144—is the purported front-runner to build the campus, likely again without a public tender and supposedly with Chinese labor and materials. It is one more example of how Chinese projects appear to take advantage of state capture in Hungary, often at the expense of Hungarian taxpayers.

It is unclear where the anticipated 5,000–6,000 student body will come from, as there reportedly were only about 250 students majoring in Chinese language at Hungarian universities in 2017.145 The proposed university branch would likely have to draw on an international student population, including students from China. Some Hungarian academics have expressed concern that the Fudan project will dilute the state budget for higher education, help squelch academic freedom, and entice smart Hungarians away from the country’s established universities.146 If completed, the Chinese leaders of Fudan will be responsible for developing course curricula, which will be geared toward higher education like the CEU before it.147 Replacing the CEU with Fudan is a strong statement of shifting political tides with broad implications for academic freedom. Hungarian academe has proven thus far to be resistant to Chinese overtures, although recent efforts by Orbán’s government to privatize universities and transform them into foundations controlled by oligarchs close to the prime minister are likely to curb academic freedom on its own.148

The Fudan project has also sparked additional controversy. Budapest’s liberal mayor, Gergely Karácsony, has publicly opposed it and pledged to put the choice before voters in a referendum that could block or at least delay construction on grounds the central government is overriding local development plans for the site. City officials had earmarked the area for much-needed student housing for the city’s existing higher education institutions.149 On this issue, Karácsonymay have a better finger on the pulse of average Hungarians than Orbán himself does. Civil society activists have begun to coalesce against the project, citing its high costs, heavy debt burden, and lack of any public engagement from the government or China. In a recent poll, roughly two-thirds of Hungarians said they oppose the project, and thousands protested against it on June 5, 2021—the first large-scale protest since COVID-19 restrictions were lifted. In a populist twist of his own, the mayor ordered four streets around the planned campus to be renamed Free Hong Kong Road, Uyghur Martyrs’ Road, Dalai Lama Road, and Bishop Xie Shiguang Road (after a persecuted Chinese Catholic priest)—a move that sparked an angry response from Beijing.150 Nonetheless, public anger is galvanizing the opposition against both the project and Orbán, forcing the government to put it on hold for now.151 The opposition appears willing to use Orbán’s nontransparent ties to China against his Fidesz party in the 2022 general election.

CONCLUSIONS

Hungarian politicians of all stripes recognize the importance of China as an economic and trade partner. Beijing’s main constituencies in the country are political and economic decisionmakers, who have turned toward China after a series of crises (that is, financial, migration, and the pandemic) or disputes with the West over Hungary’s democratic decline. Hungary, like the EU as a whole, will most likely continue to face political, social, and economic crises, with Beijing keen to offer relatively easy diplomatic or economic alternatives. The Hungarian government has no illusions about China, but it is willing to tolerate Chinese influence in order to score certain political and economic gains. With such a welcoming posture, Hungary has enabled China to make economic and political inroads into Europe.

Nonetheless, selling itself to average Hungarians appears far tougher. Sixty percent of Hungarian respondents in a late 2020 poll continued to see the EU as the most important partner for their country’s long-term development—almost double the number that chose China (33 percent).152 Average Hungarians have little interest in Chinese culture or awareness of what is going on in China. However, policy is made not by average citizens, but by political elites. Engaging China reaps economic rewards for many of Hungary’s prominent politicians and business leaders, particularly Orbán’s cronies. Some members of the opposition have also been accused of benefiting from Chinese corruption schemes; the lack of transparency in Hungarian business circles and willingness to buck EU public tender requirements are clear vulnerabilities that have facilitated a fair amount of elite capture.153

Beijing, in turn, is a useful tool for Hungarian officials hoping to signal their government’s displeasure with its traditional partners in the West and gain leverage vis-à-vis Brussels (and Washington) by demonstrating that it has political and economic alternatives. Beijing never takes public stances on Hungary’s domestic challenges or its squabbles with Brussels. Rather, as an alternate source of capital, Beijing is perceived as a geographically distant partner that imposes few EU-style regulations or conditionality, even if the terms of some of Chinese-Hungarian economic deals often appear lopsided to China’s advantage. Repaying the debt for the Budapest–Belgrade railway or Fudan University’s envisioned Hungarian campus is not high on Orbán’s agenda, but staying in power certainly is. Hungary’s growing debt burden to Beijing will be left for some future leader to deal with.

For Beijing, Hungary is a relatively easy entry point for advancing its political influence on the continent and complicating EU consensus. Budapest shows hesitancy to go against China on the global stage and repeatedly has broken with the rest of Europe on China, including watering down criticism of Beijing’s posture in the South China Sea or condemnation of its human rights policies. Although Hungary did not block recent EU sanctions on Chinese officials responsible for gross human rights abuses in Xinjiang,154 Hungarian Foreign Minister Péter Szijjártó denounced them in Brussels as “pointless, self-promoting and harmful.”155 Szijjártó’s statements are primarily symbolic, but Hungary’s public criticism of the sanctions was well received in mainland China.

Citing the need to conform to the One China policy, Budapest broke with its European and transatlantic allies to block Taiwan’s bid to participate in the World Health Organization (WHO) with observer status during the height of the COVID-19 pandemic—a move that likely complicated the global response to the pandemic and denied Taiwan a platform to help disseminate lessons learned from its highly effective measures to stem the disease early on in the pandemic.156 In April 2021, Hungary also blocked an EU statement criticizing Beijing’s imposition of a new national security law in Hong Kong that has diluted civil liberty protections for city residents and led to the arrest of several prominent democracy advocates.157 With Hungary retaining such a welcoming environment for China, Beijing will continue its efforts to enhance its influence in Budapest, taking advantage of the country’s weak institutions, limited platforms for civil society, and the relative ease with which it has cultivated Hungarian decisionmakers. In addition, Budapest will likely continue coming to China’s defense, so long as it avoids any major reputational costs inside the EU or with the transatlantic alliance—something Hungary generally has evaded so far.

Yet for all the hype about Beijing’s economic ambitions in Central and Eastern Europe, China does not seem all that interested in Hungary itself. Apart from pandemic-related mask or vaccine diplomacy, Hungary rarely is a prominent topic in Chinese media, which pays greater attention to Europe’s more geopolitically important countries. China clearly sees its engagement with Hungary as a stepping-stone into the EU. This approach does little to win the hearts and minds of average Hungarians, who remain skeptical of the benefits of partnership with China and disappointed by Beijing’s engagement—at least for now.

ROMANIA: NO LONGER CHINA’S “BACKYARD”

Located at the crossroads of Southeastern, Central, and Eastern Europe, Romania has often been perceived as a country that pivots between big powers. In 2004 and 2007, it became a full member of both NATO and the EU, respectively. Under the previous regime, dictator Nicolae Ceaușescu of the Romanian Communist Party (RCP) attempted to strike a balance between the Soviet Union and China, until his own government collapsed at the end of 1989, shortly after the fall of the Berlin Wall. While the young generation was looking west, Romanian elites kept relatively close ties to China for most of the 1990s, hoping to attract investment and preserve a once-powerful connection. Beijing, in return, was cautiously keeping Romania as a potential long-term ally. Today’s situation appears quite different, as Romania increasingly leans toward the West and away from China, which offers little to the new generation of Romanians and has not been able to deliver on its promise of investment. Although Beijing has managed to retain a small part of its old network of Romanian friends, its involvement in the country can be characterized as a missed opportunity as Romania becomes an increasingly self-confident EU member state.

A BRIEF HISTORY

Romania established diplomatic relations with the newly proclaimed People’s Republic of China in early October 1949, the same month the Chinese Communist Party took power officially in Beijing. Over the course of their relations, China supported Romania’s stance against Moscow as Bucharest embarked on its own political journey in and out of the Soviet Union’s orbit. For a while, Sino-Romanian bilateral exchanges intensified in education, technology, and industry. Romanian and Chinese experts visited, studied, and occasionally worked in the other country. In the late 1970s, former president Jiang Zemin became the most prominent Chinese figure to work in Romania, even going so far as to learn the language.

The zenith of Romania’s close relations with China was on display when Ceaușescu opposed the Soviet occupation of Czechoslovakia in 1968. Historians recall that China’s then premier Zhou Enlai encouraged Romania, saying “Resist, if you need, we will provide you guns too.”158 Indeed, Ceaușescu’s government received Mao Zedong’s direct support. Step by step, the Romanian leader became a close, reliable ally to China—one of the few in Europe at the time of the Cultural Revolution (1966–1976), despite geographical and cultural gaps. In 1970, Beijing provided technical support to Ceaușescu’s regime when Romania was devastated by floods. These actions, in addition to personal bonds between Mao, Zhou Enlai, and Ceaușescu, helped build a unique connection between Beijing and Bucharest. To this day, the two countries are still tied by a certain degree of nostalgia, especially in China, where Romania is still often described—somewhat naively—as an old friend.159

China continues to try to cultivate Romania—both the government and the public at large—via diplomatic and soft power actions. For example, in late 2019, Jiang Yu, the Chinese ambassador to Bucharest, called for Romania to participate in a “community with a shared future,” one of Xi’s handpicked diplomatic slogans. “China is willing to work with its Romanian counterparts to hold a variety of cultural events, strengthen nongovernmental and local exchanges, and promote people-to-people ties, so that the idea of community with a shared future will find its way even deeper into the hearts of both peoples” she wrote in a Chinese newspaper.160 Her statement had little resonance, especially among the younger generation of Romanians who have come of age since Romania became a full EU member and remain highly critical of the pre-1989 RCP regime and its affiliates.

Following the collapse of the Ceaușescu regime in late 1989, Beijing kept in relatively close contact with the new Romanian leadership under the presidency of Ion Iliescu—a former communist—and organized multiple bilateral official visits, including those of Iliescu himself in 1991, 1994, and 2003, and return visits by Jiang Zemin in 1996 and his successor, Hu Jintao, in 2004. China took advantage of a weakened Romanian economy throughout the 1990s to expand its exports across the board. Average annual bilateral trade amounted to around $3.5 billion between 2000 and 2009, with a deepening Romanian deficit toward the end of the decade.161 After 1989, political brotherhood did not mean a balanced economic relationship, which contributed—as in many other European countries, including Georgia and Hungary—to a sense of disappointment among average Romanians. Meanwhile, the Central European country was transitioning from a planned economy to a market economy, as it prepared for a full rapprochement with the West through memberships in both NATO and the EU. China’s domestic political positioning shrank even further, despite attempts by leaders of Romania’s center-left Social Democratic Party (PSD) to keep it alive. The PSD-led government under Adrian Năstase closely engaged with China to no avail. According to a senior Romanian official, “from the early 2000s, China itself appeared more focused on the EU and the US” than on small countries in Eastern Europe.162

In 2012, Romania became an active member of the China-backed 17+1 format (then only 16+1, prior to Greece joining in 2019), which meets annually. Beijing attempted to create a unique club of mostly former socialist countries in the hope they would become a separate community with a special relationship with China. This worked better in Hungary than elsewhere, although PSD leaders in Romania, such as former prime minister Victor Ponta, appeared flattered to receive such attention from Beijing. When Ponta himself hosted the second leaders’ summit in Bucharest in 2013,163 his bilateral meeting with Chinese Premier Li Keqiang was described enthusiastically as “a landmark for Sino-Romanian relations.”164 The meeting was primarily meant to serve as a launchpad for fresh Chinese investments into Romanian infrastructure. Ponta and his ministers suggested a dozen projects to Chinese companies, including hydropower plants, a nuclear power plant, and high-speed railways, as well as a management contract for the Port of Constanta—all of which failed to materialize.165

The pattern of China making generous offers during 17+1 meetings without ultimately delivering gradually gave way to disappointment, “the more so as Chinese investments began to massively flow toward the more developed and prosperous parts of the European Union (2015-2016).”166 At the same time, Romanian officials came to realize “the tension of being part of both 17+1 and the EU,” according to a senior diplomat.167 While the old China-Romania friendship could be seen as an advantage in some ways, domestic politics soon showed the political elites where Romania belonged.168 This was particularly evident during the Trump presidency, when Romania received high grades in Washington for raising its contribution to NATO to 2 percent of its GDP.169 As a sign of their renewed partnership, President Klaus Iohannis and Trump together marked “with pride the 15th anniversary of Romania’s accession to [the] North Atlantic Treaty Organization” in October 2019 at the White House.170 Under Iohannis, such gestures have made a close relationship with Beijing highly unlikely.

Furthermore, despite apparent Chinese pressures,171 both Iohannis and Prime Minister Florin Cîțu (of the right-wing National Liberal Party, or PNL) chose not to attend the latest virtual 17+1 summit, even though China was for the first time symbolically represented by Xi himself.172 Five other leaders from Central and Eastern Europe did not attend the February 2021 meeting, bowing to a mixture of European and U.S. pressure as well as a sense of disillusionment with Beijing’s failed promises.

THE CURRENT STATE OF ECONOMIC AFFAIRS

Sino-Romanian trade in the first decade of the twenty-first century saw a dramatic increase, which led to a large Chinese surplus.173 According to the Romanian Ministry of Foreign Affairs, the total value of trade between Romania and China in 2020 amounted to $6.68 billion. The total value of Romanian imports was $5.74 billion, while Romanian exports to China rose to just about $943 million.174

Besides trade, long-term economic cooperation through Chinese investment has not produced substantial results. Chinese companies with a small Romanian presence—but very few local hires—include China Tobacco International, Eurosport DHS, Yuncheng Platemaking, Honest General Trading, and China’s two telecommunication giants, Huawei and ZTE. Other examples include branches of multinationals recently acquired by Chinese conglomerates, such as Pirelli (the Italian tire manufacturer was acquired by a Chinese state-owned enterprise, Chinachem Group, in 2015175) and Virginia-based pork producer Smithfield Foods’ Romania subsidiary (now owned by WH Group, formerly known as Shuanghui Group).176

In recent years, the Romanian government has started to revise its policies in line with the EU’s guidelines to enhance a foreign investment screening mechanism,177 which has been fully functional since October 2020. In addition, a set of mitigating measures on 5G technology—a particularly problematic issue for China given both European and U.S. concern over Chinese companies’ involvement in developing and building 5G infrastructure in Europe178—has been introduced by the European Commission along with the development of new rules on international procurement.179 Finally, a regulation on foreign subsidies distorting the internal market was announced by the EU in May 2021.180 None of these regulations or proposals, many of which were clearly aimed at Chinese economic expansion in the EU, were opposed by Romania, China’s so-called old friend.

Furthermore, the Romanian government has established its own rules to protect local businesses, especially from corruption.181 Assisted by the emergence of anti-corruption civic movements and by its membership in the EU, Romania has been pushing for better implementation of the rule of law.182 Such an operating environment has made it more difficult for state or private foreign actors (including from China) to take part in unofficial activities. In fact, foreign companies from countries that have not signed public procurement agreements with the EU are now blocked from public infrastructure projects. Foreign entities willing to bid for such projects will be barred—a move that, in theory, should harm Chinese companies that are eager to participate in tenders (although few have had much success in Romania). “We are wary of companies that benefit from direct and indirect subsidies from their home country and unfair competitive advantage,” said the prime minister in a recent interview. “I generally can’t have such companies making bids and winning contracts, whether they are from China or anywhere else,” he added bluntly.183

Romania has reversed course with Chinese investors frequently, as domestic politics fluctuate and unsuccessful prime ministers lose power before they can close on Chinese-Romanian economic projects. These frequent changes in Romanian governments have “hindered the development of closer relations under the Belt and Road Initiative.”184 For a country such as China, which likes entertaining long-term projections, it has been difficult to engage with Romanian governments under such fluid circumstances.

Once the great hope for Sino-Romanian cooperation, the nuclear energy sector presents other difficulties for China. Through its state-owned China General Nuclear Power Group (CGN), Beijing had tried to set up a nuclear facility in Cernavoda through a partnership with Romanian state company Nuclearelectrica. But in May 2020, the Romanian government asked Nuclearelectrica to “identify new partners” and terminate negotiations with CGN for the construction of two nuclear reactors.185

Similarly, the Tarnita-Lapustesti Hydropower Plant, a pumped-storage hydroelectric station that was first proposed under the Ponta government, was initially going to be assigned to one of three interested Chinese consortia in 2015. Instead, it was shelved by the next Romanian government.186 Plans for a new 600-megawatt unit at the coal-burning Rovinari Power Station, funded by China Huadian Engineering, also did not move forward. Instead, the government launched a new energy plan for the years 2020 through 2030 without China’s help.187 In the end, total Chinese foreign direct investments in Romania amount to just about $1.03 billion, according to the National Bank of Romania. Such figures do not include telecommunications giant Huawei’s sales and support activities in the country, as they are considered European investments—Huawei’s investment came to Romania via its European headquarters.188

Through its Bucharest office, Huawei has actively courted Romanian politicians in the hope of expanding its footprint in infrastructure. Their efforts did not prevent the Romanian government from passing legislation that bars certain non-European bidders from taking part in the 5G auction.189 In April 2021, the Romanian government proposed a draft bill stating that companies controlled by a foreign government—which have a history of unethical corporate behavior, are not subject to an independent justice system in their home country, or do not have a transparent ownership structure—are not eligible to supply equipment for Romania’s 5G networks. Both Iohannis and his allies in the center-right government have repeatedly voiced resistance to awarding Huawei a contract to implement 5G technology in Romania. Looking at the company’s history and ties to the Chinese state, Huawei does not appear to comply with at least two of the stated conditions: it does not have transparent governance and it has, in the past, been sanctioned by the United States for alleged unethical behavior. Like any other Chinese corporation, Huawei is also subject to the opaque nature of China’s judicial system. According to the Romanian government, Huawei therefore presents “risks, threats or vulnerabilities to national security.”190

CHINA’S LOW PROFILE IN ROMANIA

Located in central Bucharest, the Chinese embassy is one of the largest diplomatic compounds in the city. It is, by and large, a legacy of a bygone era: activities, for the past couple of years, have been relatively low-key. Unlike other Chinese embassies, the embassy in Bucharest only launched its Facebook page in 2019 and has no obvious other social media presence. By staying away from controversies that could alienate a country it still sees as a friend (if not an ally), China seems keen to preserve what relationship remains. The total number of Chinese residents in Romania, however, remains dismally low—according to the Ministry of the Interior, it stands at only 7,544, down from 10,000 residents in 2004.191 Overall, the Chinese population in Romania is small compared to other European countries of a similar size. There is no Sino-Romanian diaspora, like one could find in France, Italy, the Netherlands, or even Hungary.

Although its embassy has remained quietly active for decades in some circles (especially outside Bucharest), China has not had a strong public presence besides the occasional networking event or article in the local press. On the contrary, Romania’s profile in China is still relatively high compared to other Central or Eastern European countries. During the Ceaușescu years, the Chinese public heard a great deal about Romania. In some Communist Party circles, the perception of Romania as a close friend continues. The reality in Romania, however, is quite different. As one analyst commented, “there is clearly a generational shift regarding China. The old generation, especially those who lived through the communist era, tend to be more open to China, while younger people lean toward the EU and the U.S.”192

In April 2018, three years after most European countries, Romania finally joined the China-backed Asian Infrastructure Investment Bank (AIIB) and has remained a quiet member. With regard to the BRI, a so-called Silk Road community-building initiative was launched in 2019 by the China NGO Network for International Exchanges to promote people-to-people exchanges in Romania. Contrary to countries including Hungary, Greece, or Georgia, China’s paramount infrastructure plan has not featured highly in Romanian media and there are no identifiable BRI projects in the country.

POLITICAL TIES

Since 2010, China’s official visits to Romania have included Prime Minister Li Keqiang, members of the Politburo Standing Committee, and other high-level or midlevel party officials that reflect long-term ties with an old friend. The reality on the ground, though, is again different. China has cultivated links mostly with retired politicians, some from the Ceaușescu era (or “the usual suspects,” as one government official privately described them193) but also former PSD leaders like Adrian Năstase and Victor Ponta or the former center-right prime minister and mayor of Cluj-Napoca, Emil Boc, who frequently take part in conferences sponsored by China. Ion Georgescu, the PSD mayor of Mioveni, is another local leader with strong connections to China. Recent attempts by the Chinese embassy to engage with other political parties (particularly the ruling National Liberal Party) appear to have produced limited results.194 For example, in a recent Economistul article, the list of Romanian guests to a briefing by the Chinese ambassador included, among others, Gheorghe Popescu (general secretary of the Romania-China Friendship Association); Viorel Isticioaia-Budura (the former long-time Romanian ambassador to China), and Alexandru Potor (public administrator of Ialomita County.195 This clearly shows that China’s constituency in Romania remains specific rather than mainstream. Although it still considers Romania a friend, China is neither attempting to reach a wide constituency nor investing in propaganda to spread its message.

Still, the embassy has been a patron to the Romanian-Chinese House, a pro-China association headed by businessman Nicolae Dumitru. The organization’s website proudly lists the support of businessmen, retired politicians, academics, and diplomats—including three former Romanian ambassadors to China.196 In a similar vein, the semi-official, embassy-sponsored Romania-China Friendship Association has expanded through the country with local county chapters that quietly serve as a way for the Chinese embassy to interact with local stakeholders.197

Romania has four active Confucius Institutes, which, prior to the COVID-19 pandemic, hosted cultural and educational events on China and offered scholarships for Romanian students studying Chinese.198 There are also Confucius classes in cities including Bucharest, Iași, Constanța, Deva, Bacău, and Pitești. Reports have mentioned other academic initiatives, such as a degree-granting program on Chinese medicine at the University of Transylvania and a joint MBA program between the Lucian Blaga University of Sibiu and the Shanghai-based East China University of Science and Technology, inaugurated in 2018 as the Sibiu Sino-European International Business School. In 2019, the two countries also launched the China-Romania Agricultural Science and Technology Park in Bucharest.199 However, these initiatives appear extremely limited compared to Romania’s ties with European universities through Erasmus dual-degree programs and EU-sponsored joint research projects.200

SISTER CITIES AND SISTER COUNTIES

Due to the countries’ long-standing political relations, the number of sister cities and sister counties is relatively large. These range from large cities such as Bucharest (sister city of Beijing) or Constanța (sister city of Shanghai) to the small town of Pucioasa (which is twinned with the picturesque Yangshuo in Guangxi province). On principle, these agreements should help cooperation on investment, people-to-people exchanges, cultural activities, and official visits. Needless to say, due to the pandemic, these activities have been almost entirely nonexistent since early 2020. At the start of the pandemic, both sides donated some masks through these traditional channels and some Romanians requested Chinese medical supplies in limited numbers. But there has been no such thing as Chinese vaccine diplomacy in Romania. Asked if he would buy vaccines from China, Prime Minister Florin Cîțu declared instead that “he was in touch with the European Commission” and that “Romania would try to produce its own vaccine locally, through the Cantacuzino laboratory.”201

CONCLUSIONS

Previously considered one of China’s best friends in Europe, Romania has become firmly part of the Western camp. Iohannis, who has been described in local media as “pro-Western,” consulted closely with the previous U.S. ambassador to Romania, Trump political appointee Adrian Zuckerman, who apparently lobbied heavily against Chinese influence.202 Zuckerman was also instrumental in securing the Romanian president’s visits to the White House in the summers of 2017 and 2019.

As a relatively new member of the EU, Romania is also well represented in Brussels. European Commissioner Adina Vălean holds the transport portfolio within the European Commission and Dacian Cioloș is chairman of the influential Renew Group in the European Parliament. The country’s leadership is keen to demonstrate it is not about to fall into China’s sphere of influence. Unlike Orbán in Hungary, who has been central to his country’s friendly relations with China, most Romanian politicians are extremely cautious toward Beijing.

Echoing countries such as Georgia, Hungary, and Greece, the Chinese-Romanian relationship today is characterized by a relative lack of debate regarding China’s growing international role. While Romanian media does not cover China extensively (due to the lack of China-based foreign correspondents), too few academics, analysts, or journalists seem to focus on this topic. Chinese commentators are keen to blame Washington for the shift. Some have even commented on the “return of the U.S. to Central and Eastern Europe.”203

Beijing believes the United States—which has “rediscovered the strategic importance of Central and Eastern Europe”204—is building an anti-China coalition. Although China sees rising confrontation with a Europe wholly under Washington’s influence,205 it has not invested much to preserve its image in Romania, where it has undoubtedly lost some credit with young generations over the past few years. Although there are examples of the West’s new approach to the region—such as the Three Seas Initiative, which includes Romania206—the reality for this U-turn is more likely domestic. Local politicians, trying to stick to the EU line, use China in their own political messaging.

The stark dichotomy between China’s rhetoric about Romania and how younger Romanian generations perceive China in return, as well as bilateral relations, is sobering. While China wants to show its economic and political influence in the region, many analysts see different facts on the ground: “Chinese economic influence by itself cannot match Western economic ties,” explained the authors of a recent report that suggests one should study “the demand-side of China-CEE relations, not the Chinese supply-side.”207 Perhaps more preoccupied by Russia than China, the Romanian government tries to demonstrate its willingness to cooperate with the rising superpower while trying to avoid overdependency on Beijing’s largesse.208

For China, Romania is a prime example of a lost opportunity. Beijing has failed to engage with the new leaders of a former ally, which has experienced a dramatic shift in the years since joining the EU and NATO.

GEORGIA: ON THE SILK ROAD BUT LOOKING WEST

A BRIEF HISTORY

When Georgia declared independence in 1992, after the dissolution of the Soviet Union, China was one of the first countries to recognize the new state. Despite this, the two countries never developed close political ties or cultural links. Georgia did not even appoint an ambassador to China until 2005. In the last decade, this has begun to change, thanks in large part to developing trade relations. Yet, after several years, more Georgians are disappointed than enthusiastic about the new relationship.

This reality check comes as both sides assess the importance of their relationship. For China, Georgia is ultimately not a country of strategic importance. It is small and does not occupy a prized location on the main routes of the BRI. It is not a member of the EU, like most members of the 17+1 framework. Moreover, Georgia is firmly pro-Western. The majority of its political elite and public remains oriented toward Europe and the United States, with a minority that favors Russia.209 On key issues, Tbilisi will choose Washington over Beijing. For example, in January 2021, Georgia and the United States signed a memorandum of understanding on 5G security, which forestalled China’s Huawei from taking over Georgia’s 5G network.210

As a result, despite its size, Georgia has shown resilience in facing up to unwelcome Chinese influence. China’s impact in Georgia is limited to certain discrete initiatives, such as construction of road and rail infrastructure, some academic exchanges, and (more recently) vaccine deliveries—each of which is not without controversy. They are not significant investments by China’s global standards, but they still stand to make a difference in a small country like Georgia.

As recently as 2019, many in Georgia pinned great hopes on China. The burgeoning relationship, they said, would boost economic growth and serve as a new geopolitical counterweight to Russia, which is universally regarded as Georgia’s primary external threat. In 2016, a Georgian expert summarized the perspective of the country’s elite: “Moscow is strongly opposed to Georgia’s western choice. But if Georgia were to be a main hub between Europe and Asia in the [BRI] project, China would be the guarantor of Georgia’s stability.”211 In 2017, three Georgian experts wrote, “Georgia’s advanced political position in the region as the most westernized country politically and economically as well as its strategic geographical position, carries the potential to be transformed in tangible economic opportunities for both Georgia and China, but more importantly on the larger political scale.”212

These hopes have not materialized. On one issue of mutual advantage—rejecting separatism—the two countries have expressed strong solidarity. China’s position was extremely helpful for Georgia in August 2008, following the five-day Georgia-Russia war and Moscow’s subsequent unilateral recognition of the breakaway territories of Abkhazia and South Ossetia as independent states. At a summit of the Shanghai Cooperation Organization on August 28, 2008, Russia lobbied other members to follow suit and recognize the two regions as independent states. China declined, making it easier for the five Central Asian states to back Georgia, not Russia, on this issue.213 That, in turn, gave cover to other post-Soviet states, such as Armenia and Belarus, to not support Russia’s maneuvers. While visiting Georgia in 2019, Chinese Foreign Minister Wang Yi pledged support for the country’s territorial integrity with regard to Abkhazia and South Ossetia, while Georgian officials reaffirmed their adherence to the One China policy.214 In recent times, however, China has stayed quiet about Abkhazia and South Ossetia.215 At the UN, Beijing did not support votes calling for the return of internally displaced persons to these regions. Maintaining relations with Russia appears to have taken precedence. During the COVID-19 pandemic, the two countries even seemed to use similar media narratives to tarnish the image of the United States in Georgia and elsewhere in the former Soviet Union. In September for example, state-run China Daily repeated a Russian conspiracy theory that the U.S.-funded Lugar Research Center in Tbilisi is being used to manufacture biological weapons. While the Tbilisi lab has long been a target of Russian disinformation, Beijing’s interest in the story was likely part of an effort to obfuscate the origins of the COVID-19 virus and push back at the Trump administration’s attempts to blame China for the disease’s spread.216

Georgia’s economic relationship with China is more dynamic. In May 2017, China signed its first-ever free trade agreement (FTA) in the former Soviet Union with Georgia (only the eleventh FTA China has signed). Thus far, this has unsurprisingly helped Chinese imports more than Georgian exports. Several Chinese companies—first and foremost the Xinjiang-based Hualing Group—have also invested heavily in Georgia.

In general, Georgian society is fairly suspicious of China. A 2010 survey by the Caucasus Research Resource Center found that only 16 percent of Georgian respondents would approve of a Georgian woman marrying a Chinese man.217 For comparison, in a 2020 poll, 42 percent of Georgians surveyed said they would approve of a Georgian woman marrying an American, and 48 percent said they would approve of a Georgian woman marrying a Russian. Moreover, the number of Chinese citizens living in independent Georgia has always been low. In 2007, there were estimated to be a little over 700 Chinese living in the country.218 In 2021, the number was estimated to be 1,768, most of whom are employees of Chinese state-owned companies.219 The number of Chinese visitors is also low. China has barely taken advantage of Georgia’s recent tourism boom. Out of 9.3 million visitors to Georgia in 2019, only 48,000 came from China (compared to, for example, 1.4 million from Russia, 1.1 million from Turkey and 485,000 from EU countries).220

The Georgian-Chinese relationship once again shows prospects of improving. In April 2021, the Georgian government accepted large shipments of Chinese vaccines, having received fewer than 75,000 doses from the EU by early May. Further shipments followed in the summer of 2021. Even modest Chinese investment can make a significant difference in a small economy like Georgia. Compared to Georgia’s affinity for the West, however, the China-Georgia relationship remains dominated by elites, with little resonance in wider society.

A STOP ON THE SILK ROAD

The China-Georgia relationship has primarily been driven by trade and Georgia’s ambitions to become an East-West transport hub. In the 1990s, many Western commentators promoted the idea of a new Silk Road in the South Caucasus and Central Asia—a modern iteration of the ancient trade route that connected China and Europe.221 The ambition was to develop a route that would bypass Russia and Iran, bringing anticipated oil and gas resources from the Caspian Sea to Western markets.

The Silk Road theme is still popular in Georgia and Azerbaijan. In the last decade, however, the focus has shifted toward China. In March 2015, Georgia signed a memorandum to join China’s BRI (then known as One Belt One Road). Five months later, Georgia hosted an early meeting of the AIIB, during which the new bank picked its first president.222 In October 2015, Tbilisi also played host to the Silk Road Forum, a business conference with around 1,000 participants including 300 from China.223 In deference to China, the next conferences, in 2017 and 2019, were also called the Tbilisi Belt and Road Forum.224 Fewer participants from China attended these two gatherings, however.

In October 2015, then speaker of parliament David Usupashvili declared in Beijing that, “In restoring its relationship with Asia through the revival of the Silk Road, Georgia is also regaining its place in Europe. Georgia ceases to be in the periphery of Europe and the periphery of Asia. We are now at the center of a new trade route, a bridge between the developed and the emerging economies of the world.”225

Turkey uses a different term for the transit route to and from China via the South Caucasus: the Middle Corridor.226 The same route is also known as the Trans-Caucasus Trade and Transit Corridor.227 The Middle Corridor has been promoted as an alternative to the current main two routes between China and Europe: by sea via the Suez Canal or over land via the northern route, also called the New Eurasian Land Bridge, which runs through Russia and into Central Europe. These two routes maintain a virtual monopoly on East-West trade. In 2020, it was estimated that 81.5 percent of Chinese cargo—more than 10 million TEU (twenty-foot equivalent units)—was shipped by sea, with the majority of the rest going via the northern route.228 As little as 1 percent of cargo traveled via the Middle Corridor, even though the COVID-19 pandemic and problems with world shipping shifted more cargo from sea to rail. According to World Bank data, the Middle Corridor route was the most expensive of the three, costing $3,500–$4,500 per 40-foot container and taking 16–20 days to reach European destinations.229 The northern route is both faster, taking 14–18 days, and cheaper, costing $2,800–$3,200 per 40-foot container. The maritime route is the slowest, taking 28–40 days, but by far the cheapest at only $1,500–$2,000 per container.

The Middle Corridor is more challenging to travel than the other two routes, as a report by Feride Inan and Diana Yayloyan lays out.230 Cargo must cross many borders and customs posts, as well as the Caspian Sea, which is prone to bad weather. On both the Middle Corridor and the northern route, trains entering Central Asia and then leaving Georgia must also change their gauge, because rails in the former Russian Empire and Soviet Union were wider than in China and Europe—another factor that increases cost and transit time. Azerbaijan has worked hard to make this route more attractive, principally by building the Baku–Tbilisi–Kars railway, which opened in 2017 and has sharply reduced journey times. For China, this is an alternate connection to Europe (and, notably, one built without Chinese investment).231 Cargo volumes are rapidly growing but remain modest compared to the northern route. The volume of freight shipped by rail through Azerbaijan in 2020 increased rapidly to just over 150,000 TEU and there is set to be another big increase in 2021.232 So-called block trains, which operate from origin to destination with all documentation having been arranged in advance, are also now being used on this route. A block train arrived in Tbilisi on February 20, 2021, having left Xian in China twenty-one days before.233 In December 2020, a train took only two weeks to travel from Çerkezköy in Turkey to Xian.234

Overall, Georgia has potential to become a more important transit hub in the future. But the Middle Corridor—and, therefore, Georgia’s significance as a transit country—is of little geostrategic importance to China. As China specialist Jacob Mardell argues, “the Middle Corridor remains a firmly regional initiative. It faces serious obstacles to becoming an alternative China-EU route, but Trans-Caspian traffic can still flow without support from Beijing.”235

BLACK SEA PORTS

Georgia’s Black Sea ports are some of its most important assets, in pure economic terms as well as part of the country’s ambitions to become a strategic East-West transport hub. Chinese investors have been involved in both the projected port at Anaklia and the existing port at Poti, but they have ended up in control of neither one.

Georgia currently relies on its two main ports, Batumi and Poti, as well as the two oil terminals at Kulevi and Supsa. However, the ports at both Batumi and Poti, which date back to the nineteenth century, are not suitable for large container vessels—hence, the initiative to build a new deep-water port and free industrial zone (FIZ) at Anaklia, near the boundary line with Abkhazia. The ambition was to receive much larger container ships and dramatically boost Georgia’s status as a shipping hub. In February 2016, the Anaklia Development Consortium (ADC) won the tender for construction of the new port. The consortium’s two key partners—Georgian banking group TBC Holdings and U.S. container terminal operator SSA Marine—promised to invest $2.5 billion in the project, aiming to open the port to shipping in 2020, with a capacity of up to 900,000 TEUs that would increase to 2.5 million TEUs by 2036.236

A Chinese company, the state-owned Power Construction Corporation of China (PowerChina), was one of the final two contenders but withdrew before the final decision was announced, enabling ADC to win the tender. “This came as a surprise to some,” said the two authors of a 2020 report on Anaklia.237 The two experts cite Georgian media reports that China’s bid was rejected because it did not offer to employ sufficient numbers of Georgian workers.238 (As elsewhere, unemployment is a major political issue in Georgia.) Another reason may have been lobbying by the U.S. government, which has consistently backed the Anaklia project. In 2019, former U.S. secretary of state Mike Pompeo affirmed Washington’s support for Anaklia, saying implementation of the project “will strengthen Georgia’s ties with free economies and will not allow Georgia to be under the economic influence of Russia or China.”239

Another reason for China’s reluctance to proceed may have been that it did not want to form a shared consortium like ADC. “Chinese investors want to have a majority,” says one Tbilisi-based Western expert. It is also plausible that the Chinese company withdrew its bid after deciding that investing in Anaklia came with geopolitical risks: Russia opposes the port and Turkey is also reportedly cool toward the project.240 El proyecto del puerto de Anaklia se suspendió en enero de 2020, después de que entrara en conflicto con la política interna georgiana y el gobierno de Tbilisi cancelara su contrato con ADC. El proyecto tampoco recibió financiamiento adicional ni del gobierno georgiano ni de las instituciones financieras internacionales, que querían ver más apoyo político antes de ofrecer préstamos.

Mientras tanto, en 2016, el conglomerado chino CEFC China Energy, más tarde sumido espectacularmente en el escándalo, invirtió en el puerto de Poti. El puerto marítimo de Poti es operado por APM Terminals, que es propiedad del gigante naviero danés Maersk. La zona económica franca afiliada, que algunos afirman que es la más grande del país, fue establecida en 2011 por el operador anterior. En junio de 2016, una delegación del CEFC llegó a Georgia. Fueron recibidos por el entonces primer ministro Giorgi Kvirikashvili en una reunión a la que asistieron otros cuatro funcionarios del gobierno y el influyente empresario Ivane (Vano) Chkhartishvili. La delegación china anunció su intención de financiar tres grandes proyectos: un Fondo Nacional para la Reconstrucción de Georgia de $ 50 millones en colaboración con la Asociación Georgiana liderada por el gobierno, una inversión de $ 1 mil millones en un nuevo banco comercial y una inversión sustancial en el nuevo Poti FIZ. Según Tinatin Khidasheli, analista georgiano y ex ministro de Defensa, ninguna de estas tres promesas se materializó.241 Con respecto a la FIZ de Poti, escribe: "El 18 de septiembre de 2017, el recién nombrado Ministro de Economía Giorgi Gakharia entregó el 75 por ciento de la FIZ de Poti a CEFC por $ 10 millones, con la condición de $ 150 millones en inversiones futuras. Si bien los diez millones de dólares por la participación del 75 por ciento parecen haber sido pagados, no hay información sobre la inversión prometida, ni de hecho ninguna actividad en la FIZ de Poti".242

En noviembre de 2016, Chkhartishvili, uno de los hombres de negocios más poderosos de Georgia, en su calidad de presidente de la Asociación de Amistad Georgiano-China, firmó un memorando de entendimiento con Zang Jianjun, entonces director ejecutivo de CEFC.243 En febrero de 2018, Irakli Garibashvili (quien sirvió su primer mandato como primer ministro de Georgia de 2013 a 2015) fue nombrado asesor del Consejo de Supervisión de la Compañía de Gestión de Proyectos Regionales del CEFC. En 2021, Garibashvili regresó como primer ministro.

Antes de eso, la parte china perdió el control de facto de su participación en Poti FIZ. En 2018, Ye Jianming, el presidente de CEFC, fue arrestado y la compañía fue parcialmente desguazada. En abril de 2020, un tribunal de Shanghai declaró a la compañía y sus subsidiarias en bancarrota.244 Para 2021, el 75 por ciento de la FIZ de Poti fue administrada por el Euro-Asian Management Group,245 que es propiedad de dos empresas registradas en las Islas Vírgenes Británicas.246 La mitad de estas acciones eran propiedad de China International Group Corporation Limited, el sucesor de CEFC, que todavía está representado por Zang Jianjun. La otra mitad de las acciones eran propiedad de Eurasian Invest. Sin embargo, gracias a una orden judicial, el consejo de administración del Euro-Asian Management Group estaba de hecho controlado por un único director georgiano nombrado por Eurasian Invest, que tenía el control de facto de toda la empresa. Todos los georgianos involucrados eran cercanos a Chkhartishvili y al ex primer ministro Bidzina Ivanishvili.247

Estas maniobras intra-élite parecen estar dando forma a las decisiones sobre los puertos de Georgia más que cualquier otro factor individual y haber detenido cualquier ambición china de tomar el control de ellos. APM Terminals anunció recientemente planes para expandir el puerto marítimo de Poti en 2021, y el proyecto Anaklia también parece estar de vuelta en la agenda política.248 Se puede anunciar una nueva licitación, pero la probabilidad de que una empresa china puje por ella parece pequeña, dados sus problemas tanto con Anaklia como con poti FIZ.

TRADE AND INVESTMENT

Georgia, a low-income country keen to receive cheap consumer goods that also offers liberal regulations for foreign investors, is an easy market for Chinese companies. In the last decade, Chinese companies have provided Georgia with substantial foreign direct investment (FDI), while Western companies have frequently fallen short. “The economy is the appetizer,” says one China expert in Georgia.

Georgian business dealings with China are also associated with a few powerful members of the business-political elite, notably Vano Chkhartishvili and David Saganelidze, a former parliamentary leader from the Georgian Dream party. For example, Georgian wine has found a niche market in China (although it took a hit in 2020). In 2016, wine exports were dominated by one company—Shilda, a family business run by Chkhartishvili’s children.249

The two countries signed their first FTA (China’s first such agreement with a post-socialist European country) in 2017 after a year and a half of negotiations. Georgia was seen as a gateway to the EU (which does not have an FTA with China), having also recently gained privileged access to EU markets by joining the EU’s Deep and Comprehensive Free Trade Area. Tariffs were lifted on almost all imports and exports. The Georgia-China FTA is lopsided. In 2020, Georgia’s imports from China were worth $708 million250—less than the year before, but enough to make China the third-largest exporter to Georgia. As two Georgian analysts point out, China’s exports to Georgia are highly diversified, ranging from machine parts and vehicles to electronics and other consumer goods.251 In Georgia—as well as in Armenia and Azerbaijan—Chinese mobile phones hold about one-quarter of the consumer market. In April 2021, Huawei’s devices were used by 8.6 percent of the population.252 The Chinese company Xiaomi, popular for its low prices, also controls 15.8 percent of the market.253

Georgia’s overall exports to China, by contrast, are much less diverse.254 They were officially worth $476 million in 2020, making China Georgia’s largest export market. This number, however, may be misleading. Copper ore is by far the biggest export to China,255 constituting more than 80 percent of total exports in 2020.256 Overall, Georgia’s global copper exports jumped more than sixfold between 2014 and 2019. But an economics expert in Tbilisi has pointed out Georgia has not witnessed dramatic increase in copper mining over that period. Instead, he speculated that much of this may be a misclassified reexport from Armenia.

China’s first major investment in Georgia was the construction of the still-functioning 24-megawatt Khadori hydropower station in the Pankisi Gorge, which opened in 2004. In 2020, a 230-megawatt thermal power plant began operating at Gardabani, in the southeastern region of Kvemo Kartli.257 It was constructed by the China Tianchen Engineering Corporation.

The largest Chinese investor in Georgia—and, at one point, the biggest foreign investor in the country—is the Xinjiang-based Hualing Group. Hualing first invested in Georgia in 2006.258 By 2013, Hualing’s plans for Georgia “looked like a big deal in the offing,” according to one Tbilisi-based Western analyst in March 2021. In 2014, Hualing’s investments had pushed China’s foreign direct investment to a total of nearly $218 million and, in 2015, Hualing opened an FIZ in an old Soviet automobile factory in Georgia’s second city, Kutaisi.259 But as analyst Franziska Smolnik writes, “the dominance of a single investment source carries with it a risk of fluctuation. Thus, in 2016 China’s direct investments were only about US$26 million. In 2017, FDI increased again, though far below 2014 levels.”260

By far the company’s biggest project is the Hualing Tbilisi Sea New City, a planned mini city north of Tbilisi. The website for the project declares, “The residential space offers apartment and villa complexes, recreational zones etc. The commercial space includes an international trade and logistics center. There are 5-star hotel, fitness center, restaurant and other facilities, such as: high school, college, library, Exhibition Hall, cinema, police station, firefighting, administration, toilets, post office, hospital, clinics, gymnasium, sanatorium, etc.”261 Since construction began in 2013, the Hualing Group has spent at least $170 million on the new city. In 2019, a journalist reported that Hualing Tbilisi Sea Plaza was virtually empty and “shoppers were outnumbered by shops.”262 A Tbilisi-based economist characterizes the city as the most significant real estate project in Georgia in many years, but ultimately a one-off project without greater strategic or political importance.

ROAD AND RAIL CONSTRUCTION

Chinese companies—particularly two Chinese state-owned corporations, Sinohydro Corporation and China Railway 23rd Bureau Group—have won almost all the multi-million-dollar contracts for major road and rail construction projects in Georgia since 2010. These projects have received most of their funding from international financial institutions, such as the EU’s European Investment Bank or the Asian Development Bank. The Chinese companies’ success in winning tenders is explained variously by their global expertise, competitive prices, and speed of construction.

Chinese-funded infrastructure projects in Georgia include:

  • Adjara bypass road (Sinohydro)
  • Tbilisi railway bypass (China Railway 23rd Bureau Group, more than half completed but then suspended)
  • Batumi–Akhaltsikhe highway, a 42-kilometer section of the Khulo-Zarzma road (Sinohydro)
  • Samtredia–Grigoleti highway (Sinohydro)
  • E-60 highway section (Sinohydro)
  • Tbilisi–Rustavi highway (Sinohydro)
  • Expansion of the East-West highway (Sinohydro)
  • The East-West Highway Corridor Improvement Project (China Railway 23rd Bureau)
  • Kvesheti–Kobi North-South bypass road (China Railway 23rd Bureau Group)263
  • Georgian Railways Modernization Project Tbilisi–Batumi (China Railway 23rd Bureau Group)264
  • Rikoti road tunnel (Sinohydro)

The fact that Chinese companies won all these tenders is controversial in Georgia. In 2020, the Polish ambassador to Georgia publicly questioned why contracts were consistently going to Chinese companies, rather than “very good” European companies, for projects largely funded by the EU.265 A Georgian businessman, Paata Trapaidze, called the tenders “opaque” and said it was unfair that Chinese state companies could participate in them while Georgian state companies could not.266 All the Georgian road and rail projects use a combination of local construction workers and migrant Chinese workers. Georgians working on the Tbilisi–Batumi railway went on strike in 2018 to protest low pay and dangerous working conditions.267

Georgian civil society organizations and experts—such as former defense minister Tinatin Khidasheli, now of Civic IDEA and Transparency International Georgia—enumerate multiple concerns about Sinohydro’s reputation, lack of transparency, and close relations with some government officials.268 The company has been blacklisted by the African Development Bank. The Georgian government’s transparency portal offered no record of how Sinohydro’s qualifications were assessed.

The China Railway 23rd Bureau Group is also controversial. The company has powerful backers in China. Initially the railway troops of the PLA, it became part of China’s Ministry of Railways. In 1989, the China Railway Construction Corporation was established as a state-owned enterprise. In June 2019, the World Bank announced “the nine-month debarment of China Railway Construction Corporation Ltd. (CRCC), a Chinese, state-owned construction and engineering company, and its wholly-owned subsidiaries, China Railway 23rd Bureau Group Co., Ltd. (CR23) and China Railway Construction Corporation (International) Limited (CRCC International), in connection with misconduct under the East-West Highway Corridor Improvement Project in Georgia.”269 This did not prevent the company from winning the contract for the new north-south bypass road shortly afterward.

PROPAGANDA, INFLUENCE, AND VACCINE DIPLOMACY

Compared to many other European and Asian countries, Chinese soft power is not very visible in Georgia. The Georgian media is still dominated by television, which in turn is used by the main political actors in the country as an instrument of domestic politics. China has barely any impact in this environment. Media monitoring shows almost no coverage in Georgia of Chinese politics or global issues concerning China, such as Hong Kong or Xinjiang.

China has little influence in the Georgian media space. The only media website affiliated with China is a little-known multimedia page called 4U.ge, which is part of the Global Times network operated by the Chinese Communist Party. The website of China’s embassy in Tbilisi is extremely basic, with very little information. Bizarrely, it has pictures of Russia but not of Georgia on its homepage.270 China’s ambassador to Georgia, Yan Li, has published articles in newspapers that have very small readerships. In one such newspaper, Rezonansi, she praised “Georgia’s consistently right attitude on the Hong Kong issue.”271

In the last decade, China has established a small niche in Georgian academia. There are Confucius Institutes at two small Tbilisi universities and Batumi State University, as well as plans to open one at Kutaisi University. Thus far, China offers only twenty state scholarships a year to Georgian students.272 The biggest Chinese language program is at Tbilisi’s Free University, where 150 students are enrolled. By contrast, Georgia has a much more active educational relationship with the United States. Each year, more than 200 Georgians—from high school students to postgraduates—go to the United States on U.S. government–funded exchange programs. In 2020, a further 640 private students went to study in the United States.

In 2021, China has started to win more influence thanks to successful vaccine diplomacy. Georgia suffered a difficult second wave of COVID-19 in early 2021, despite having coped well with the first wave in 2020. That early success was in large part attributed to the high profile of three public health professionals known informally as the three musketeers.273 The Beijing-based Asian Infrastructure Investment Bank (AIIB) provided two loans of 91.3 million and 45 million euros ($107 million and $53 million) to Georgia in May and July 2020 to deal with the pandemic. In July, China donated medical supplies to Georgia.274 In February 2021, one of the three musketeers—Paata Imnadze, the deputy head of Georgia’s National Center for Disease Control and Public Health (NCDC)—commented negatively on Chinese vaccines, saying, “we could have a vaccine a long time ago, the one which is used by our neighbor Turkey, but can you imagine what could happen here? You probably remember what happened when we just mentioned that [the Chinese vaccine] will be also considered for vaccination.”275

However, the failure of the EU and other Western partners to provide vaccine doses to Georgia eventually opened the door for China. On July 2, 2021, Georgia’s prime minister said the country had received 1 million doses of China’s Sinopharm and Sinovac vaccines—compared to less than 100,000 doses of AstraZeneca and Pfizer vaccines—with another million Chinese doses expected to arrive shortly.276 The Georgian government did a U-turn and authorized use of the Sinopharm vaccine before it had WHO approval. The first substantial shipment of a Western vaccine, half a million Pfizer doses, arrived in the country only on July 24, as infection rates were again climbing sharply.277 Another musketeer, Amiran Gamkrelidze, the well-known head of the NCDC, was among the first Georgians to publicly receive a Sinopharm shot.278 The success of this Chinese campaign may only be undermined by a general skepticism among Georgians toward getting vaccinated in the first place.279

CONCLUSIONS

In geopolitical terms, China seems to see Georgia as a useful side bet. It is unlikely to do anything there that might offend Russia. Georgia is not a major component of the BRI, as the Middle Corridor is an expensive route of greater import to local economies than to Beijing. China’s economic intervention in Georgia is quite ad hoc, without much evidence of an accompanying political strategy. Chinese investments in Georgia have been welcomed but have not been transformative.

Georgia’s governance structures are still opaque, potentially making it vulnerable to influence operations from Russia or China. The country is sometimes referred to as a “captured state,” due to the huge personal influence of former prime minister and founder of the Georgian Dream party Bidzina Ivanishvili, whose personal wealth was estimated in 2014 to be worth more than $5 billion—32 percent of Georgia’s GDP.280 However, if this picture of state capture by Ivanishvili and his associates is correct—and it is certainly mitigated by other factors, such as EU and U.S. influence and a strong civil society—this makes the country’s elite more vulnerable to domestic capture than to capture by foreign actors such as China.

Moreover, the story of the Georgian elite’s opaque interaction with Chinese companies arguably cuts both ways. In some cases, as the Poti FIZ, it is the Georgian partners who have emerged stronger. Unlike Western countries and Russia, China does not have a high profile (either positive or negative) in Georgia. The public attitude toward the country can be summarized as indifference. A public opinion survey conducted for the U.S.-based International Republic Institute in February 2021 found that Georgians consider China neither a strong friend nor a threat.281 Only 11 percent of respondents said that China was Georgia’s “most important economic partner,” despite the strong trading relationship between the two countries. A total of 57 percent of respondents evaluated the China-Georgia relationship as good—a positive result for China, but still a poor score compared to almost all other major countries, except Iran (48 percent) and Russia (7 percent).

Vaccine politics and other factors may yet sway more Georgians toward China. But the relationship itself does not seem to be a strategic priority for either country. For the foreseeable future, Beijing looks most likely set to be one more player in Georgia’s busy network of geopolitical relationships.

CONCLUSIONS AND RECOMMENDATIONS

STRATEGIC LOGIC AND OBJECTIVES DRIVING CHINESE ACTIVITIES

China’s interests in Southeastern, Central, and Eastern Europe are all underpinned by at least three broad objectives and motivations: pushing Chinese exports and investments, exerting political influence in Europe, and fostering a positive image of China and relations with China.

Pushing Chinese exports and investments

China likes to consider countries in Southeastern, Central, and Eastern Europe as part of a Chinese sphere of influence on the European continent. From Beijing’s perspective, the region’s position at the doorstep of the European Union makes it uniquely attractive. Amid significant local demands for infrastructure investments, the region has become a priority for Chinese investments in areas such as energy, transportation, and logistics. All four case countries in this paper are part of China’s massive Belt and Road Initiative. Three of them—Greece, Hungary, and Romania—are members of the 17+1 format, which Beijing leverages to engage with regional states on BRI-related issues. While China’s direct economic stakes in Romania and Georgia are fairly limited, Beijing sees both Greece and Hungary as potential hubs for Chinese expansion in Central and Southern Europe and beyond.

China has a significant economic footprint in Greece, including big investments in the country’s ports and desire to create a regional transport and logistics hub in the Mediterranean as part of the maritime route of the BRI. China sees Hungary’s geographical position in the middle of Europe as a springboard for accessing other European markets. Similarly, Georgia’s location on the Black Sea has potential to become a transport and logistics hub between Europe and Asia—though progress has been slow so far and China faces stiff regional competition with Russia, Turkey, the European Union, and the United States to grow its footprint and influence in the South Caucasus and Black Sea regions. China’s bilateral trade agreement with Georgia can also provide a backdoor into the EU’s single market, making Georgia another stepping-stone for engagement with the rest of Europe. Meanwhile, in Romania—one of the biggest economies in Eastern Europe—China has had little economic traction.

Yet there are also limits to China’s direct strategic interests in each of these four countries. The major economies of Western Europe remain China’s main economic priority. In countries with small economies, like Georgia, Chinese interest is driven mainly by ad hoc commercial opportunities that arise. Elsewhere, the individual interests of Chinese firms often dictate the level of engagement. However, despite limited economic interest in Southeastern, Central, and Eastern Europe, China is unlikely to cease investing in the region, especially in Hungary and Greece, where Beijing has key economic and political stakes. China seems to be planning for the long term. Should a clear opening arise—and given the frequency of economic and political crises in Greece and Georgia especially, such an opportunity seems likely—Beijing will be ready to step in.

Exerting political influence in Europe

For China’s relationships in the region, symbolism often matters more than substance. To Beijing, some countries are more stepping-stones than cornerstones of its strategy toward Europe. Developing strong ties with these states can allow China to indirectly influence European consensus and transatlantic alignment on particular issues of concern to Beijing. China’s interest in the region is less about influencing the countries themselves, and more about how to leverage influence to have a wider regional impact.

China has sought to use Greece and Hungary in this fashion. Under the Tsipras government, when Greece openly sought Chinese investments, Athens blocked two EU statements at the UN condemning China’s human rights record and an EU foreign policy statement on the South China Sea. Although the current government seems more strongly committed to maintaining EU consensus on China, Greece was one of four EU countries that refused to sign an EU statement critical of China’s Uyghur policies at the UN on June 22, 2021.282

Meanwhile, Hungary remains willing to come to China’s aid. Though it has few illusions about China, Hungary’s government led by Viktor Orbán has repeatedly avoided public fights with Beijing, likely hoping to keep the door open for Chinese investments, garner diplomatic support over Hungary’s democratic backsliding, and communicate Hungary’s political and economic alternatives to Brussels. For example, in April and June 2021, Orbán’s government blocked EU statements about Hong Kong. Moreover, in June 2021, Hungary joined Greece in abstaining from a Canada-sponsored joint statement at the UN Human Rights Council in Geneva against China’s human rights abuses in Xinjiang.283 For Beijing, these efforts not only dilute the EU’s approach to China but also complicate the transatlantic community’s ability to reach consensus on Chinese-related issues such as human rights violations. In other cases, Hungary’s willingness to criticize EU actions—even if it does not formally try to prevent them—can still provide China with symbolic gains, allowing Beijing to claim that others in the West support China and similarly driving a wedge into the transatlantic community.

Meanwhile, China’s ability to exert political influence in or via Georgia and Romania appears far more limited.

Fostering a positive image of China and relations with China

Beijing has actively engaged in the region to foster a positive image of itself, promote its political and economic model, and shape local narratives about relations with China. These narratives range from promoting “win-win” cooperation, stressing China’s “harmonious” rise, playing up the economic opportunities afforded by the BRI, emphasizing historical or cultural special bonds between local countries and China, or criticizing the United States. While promoting these narratives can take a variety of forms, there is little evidence to suggest that Beijing has sponsored a massive campaign to win hearts and minds in the four countries. Instead, China’s soft power efforts seem mostly directed at certain key influential elites in business, politics, academia, or NGOs. Public perceptions of China have lately deteriorated across the region, although Greece and Hungary are still among the most China-friendly countries in Europe.

Unlike many others in Europe, none of the four case countries have experienced any overtly aggressive Chinese diplomacy or influence operations on social media. Chinese embassies in the region have, for most part, maintained low profiles and avoided engaging in the type of wolf warrior diplomacy seen in countries like Sweden, France, and the Czech Republic (especially during the COVID-19 pandemic). This could be due to China’s lack of strategic stakes in these countries, or possibly a dearth of sensitive issues that might warrant a more assertive approach. Chinese officials are also wary of upending their relatively friendly relations with local governments.

In response to growing pushback from the United States and the EU, China is keen to promote itself in the region as a useful partner to local countries. Beijing readily exploits Western weaknesses, including the difficulties of negotiating debt relief or strict requirements for loans. The COVID-19 pandemic provided China with new opportunities to make inroads, as many Western governments were either too preoccupied at home or simply unable to help. China stepped in to provide much-needed assistance in the form of medical equipment, pharmaceuticals, and eventually vaccine supplies to Georgia and Hungary. In the former, it was by necessity. Budapest, meanwhile, made a deliberate choice to buy Chinese vaccines, likely to please Beijing and express displeasure with Brussels over the EU’s slow vaccine rollout program. Yet it is unclear whether Chinese vaccine diplomacy will have any soft power traction. Average Hungarians still seem to prefer Western-manufactured vaccines, and vaccine hesitancy overall remains a public health problem in Georgia.

HOW CHINA LEVERAGES LOCAL VULNERABILITIES

There are several examples of China taking advantage of local vulnerabilities and weaknesses—such as fragile state institutions, elite capture, and weak civil society—in the four countries to exert economic, political, and soft power influence.

Weak state institutions

China’s business model thrives in environments where local institutions and regulatory frameworks are relatively weak. Many political and economic elites in the region appear eager to benefit from the lack of transparency that often accompanies Chinese investments. Governments struggle to vet or monitor Chinese economic or political activities, while civil society and the media are often able to voice their concerns only after a deal has been signed. Countries in Southeastern, Central, and Eastern Europe generally provide China with a more hospitable business environment than in Western Europe, where countries have more stringent FDI screening mechanisms and transparency requirements.

China sees countries in Southeastern, Central, and Eastern Europe as developing economies. Beijing has sought to leverage economic weakness in the region to its advantage by portraying itself as a savior to gain control over strategic assets. The most obvious example of this tactic is Greece, where the government a decade ago, deeply affected by the global financial crisis and the strict austerity measures imposed by international creditors, turned to China as a new source for financing. China readily seized on investment opportunities in Greece after the privatization of state assets, but its biggest project—the Port of Piraeus—has been mired in controversy.

Países como Hungría y Rumania luchan con amplios problemas de corrupción y gobernanza que han creado marcos regulatorios débiles. Una vez más, la falta de escrutinio público o transparencia beneficia tanto a China como a las élites locales. Hungría, especialmente, es un lugar hospitalario para China, y el ferrocarril Budapest-Belgrado es un ejemplo de alto perfil de por qué este es el caso.

Georgia es económicamente vulnerable, dados los altos niveles de pobreza y el muy necesario desarrollo de carreteras, ferrocarriles y otras infraestructuras. También busca socios diplomáticos para protegerse contra la agresión rusa, por lo que Tbilisi corteja activamente a los países ricos con influencia geopolítica. Sin embargo, Georgia también adolece de una transparencia débil en las decisiones de contratación pública; Las empresas estatales chinas han ganado procesos de licitación para construir grandes proyectos de infraestructura donde la mayor parte del financiamiento proviene de prestamistas internacionales. El hecho de que a dos empresas estatales chinas se les haya permitido dominar la mayoría de los principales proyectos de construcción de carreteras y ferrocarriles, a pesar de las quejas de las empresas estatales georgianas sobre los turbios criterios de selección, habla claramente de estas deficiencias.

Además, varios de los países de la región aún carecen de mecanismos adecuados de control de las inversiones, a pesar de que tanto la UE como los Estados Unidos los han instado a endurecer las restricciones y proteger ciertos sectores críticos contra las empresas extranjeras de propiedad estatal. Estas deficiencias han permitido a las empresas chinas subsidiadas o controladas por el estado adquirir activos de infraestructura crítica como puertos, carreteras y ferrocarriles con relativa facilidad en los últimos años. Hungría, por ejemplo, se ha resistido a endurecer la selección de inversiones o a cumplir con los requisitos de la UE en las licitaciones públicas por temor a convertir las inversiones chinas en proyectos que beneficien a las élites políticas y empresariales del país. Budapest incluso ha llegado a invitar a las empresas chinas que han sido sancionadas por Occidente por corrupción a licitar grandes proyectos de construcción.

Captura de élite

Si bien la captura de la élite y la corrupción son problemas graves en varios de los países encuestados en este documento, la situación es particularmente aguda en Hungría. Usando su posición protegida en el país, las élites húngaras son muy receptivas a los acuerdos chinos porque pueden beneficiarse financieramente y evitar la rendición de cuentas, a pesar del hecho de que los flujos de inversión y el crecimiento del comercio han demostrado ser mucho menos impresionantes de lo esperado. Hay numerosos ejemplos de proyectos en Hungría, incluida una licitación relacionada con el ferrocarril Budapest-Belgrado, donde se han adjudicado contratos a empresas controladas por asociados cercanos de Orbán. Algunos miembros de alto perfil de la oposición política también se han beneficiado económicamente de los lazos amistosos con Beijing. La falta de discusión pública o rendición de cuentas sobre estos vínculos ha hecho que sea relativamente fácil para Beijing facilitar la captura de la élite, al igual que el aparente afán de algunos tomadores de decisiones húngaros por ser capturados. Los funcionarios del gobierno húngaro y los líderes empresariales parecen dispuestos a cumplir las órdenes de China en la UE, a menudo de manera proactiva. Mientras que otros países, como Rumania y Georgia, también luchan con la captura estatal de élite y la corrupción, no han experimentado el mismo nivel de influencia política china que Hungría.

Sociedad civil débil

La presencia de una sociedad civil débil y la influencia oligárquica y el control sobre los medios de comunicación y las ONG pueden brindar oportunidades para que China intervenga y llene el vacío.

La falta de informes objetivos sobre China es particularmente aguda en Hungría, donde los oligarcas progubernamentales, que a menudo hicieron sus fortunas a través de fondos de la UE, han consolidado cientos de medios de comunicación bajo la llamada Fundación de Prensa y Medios de Europa Central, una organización controlada por el gobierno húngaro. Esto permite al gobierno controlar aproximadamente el 90 por ciento del flujo de información en el país, especialmente en el campo, donde el acceso a Internet es limitado. En lugar de elogiar a la propia China, estos medios de comunicación tienden a enfatizar la importancia de los fuertes lazos económicos y políticos bilaterales entre los dos países. Dada la necesidad del gobierno de Orbán de demostrar a sus propios ciudadanos que Budapest tiene alternativas políticas a la UE, promover puntos de vista positivos de China y vender la fortaleza de las relaciones húngaro-chinas son útiles. El gobierno de Orbán ya está inclinado positivamente hacia China, por lo que los medios estatales o amigables con el gobierno tienden a evitar cubrir temas controvertidos que podrían enojar a Beijing. Como resultado, China aparentemente no siente la necesidad de influir en los medios de comunicación en Hungría.

In Greece, which has a vibrant media landscape, China does not control any media. However, China has attempted to indirectly control and influence local media outlets through cooperation agreements with national news agencies as well as through the embassy’s active use of social media. In Romania, the Chinese embassy has published op-eds and interviews in one business publication with which it enjoys close relations, but there seems to be little to no effort by China to actively influence Romanian public opinion. In Georgia, pro-government media outlets will occasionally show some support for the Chinese government’s actions, but there is little evidence of China proactively trying to influence the country in any substantial way. In Romania and Georgia, there is scant public interest in China, so Beijing’s ability to influence public opinion via local media is limited.

Moreover, much of Chinese soft power efforts seem not directed at society at large but rather at certain elites or subnational and people-to-people links. In Hungary, China cultivates relationships with up-and-coming political and business leaders by offering generous academic scholarships and exchanges. In other countries, such as Romania, China benefits from legacy relationships dating to earlier periods, consisting of mainly retired politicians. Mainstream parties in Romania have proven fairly resilient to Chinese influence. Although it still considers Romania a friendly country, China is not attempting to reach out to a wide constituency, nor does it invest in heavy-handed propaganda to spread its message. Similarly, in Greece, China maintained good relations with the previously ruling left-wing Syriza party and the communist KKE, but Beijing has struggled to cultivate ties with more centrist-oriented parties.

Finally, China has initiatives such as Confucius Institutes and academic partnerships in all four countries, but these tend to be rather small-scale operations of limited influence. One major exception is the planned construction of a Fudan University campus in Hungary, which, if completed, would constitute a major upgrade in China’s soft power presence at a time when academic freedom in the country is already in decline. This would also represent a stepping-stone in China’s attempt to become a top international player in higher education, putting China in direct competition with leading U.S. and European universities.

POINTS OF RESILIENCE

China’s influence in the region is limited by a combination of several factors, including growing skepticism arising from initially unrealistic expectations of trade and investment, bottom-up pushback against some of China’s deals, pro-Western outlooks among the population at large, an economic or security dependence on the transatlantic community, and ineffectual Chinese soft power projection.

Misplaced expectations of trade and investment

Several factors mitigate some of the most glaring economic vulnerabilities. First, there is growing skepticism about China’s ability to deliver on its many lofty promises, even in Hungary. Countries, which a decade ago held high expectations about the potential benefits of Chinese investments, have become gradually disillusioned with Beijing’s ability to deliver on its promises. Though China is still perceived as an important economic partner, the much-touted BRI has resulted in few tangible projects and the 17+1 format is increasingly perceived by local governments as a vehicle for Beijing to exert political influence. A case in point is Romania, which has seen a significant increase in bilateral trade with China but little in terms of Chinese investments.

Second, even in cases where Chinese-funded projects have materialized, there is also growing apprehension about the conditions of Chinese engagement. This has to do with growing frustration and discontent over the terms of specific Chinese investment deals in many states (for example, ownership stakes, labor rights, environmental degradation, and the lack of benefits for local companies and workers). Some Chinese projects are infrastructure or so-called brownfield investments (when a company invests in an existing facility to launch a new operation), which have relatively little impact on sustainable job creation in new employment sectors. This shifting sentiment is particularly evident in Greece, which only a few years back regarded China as an economic savior but both the public and the government have since become disillusioned.

Third, several of the countries have tightened up their investment screening frameworks in recent years after being urged to do so by the EU and the United States. Growing pressure from Brussels and Washington has also influenced decisions to grant Chinese companies major tenders and contracts involving critical sectors or assets. Several of the case countries have also rejected Chinese offers due to concerns about the terms. The main exception is Hungary, which appears to keep its doors wide open to Chinese investments, even if expectations have not been met in recent years.

Of course, none of this suggests that regional countries are closing their doors to China. But there is far less illusion and optimism toward China today than only a few years ago. It is no longer enough for China to make grand promises without delivering.

Bottom-up pushback against Chinese deals

While members of the 17+1 club have had high expectations that Chinese investments would bring significant socioeconomic benefits, there are signs of growing disappointment among local and subnational groups against some of China’s projects. In several cases, deals with China have even been rejected or canceled, interrupted, or reversed due to such bottom-up pressures.

Once again, the Port of Piraeus is an indicative example. While COSCO’s investment in the port was long heralded as a major achievement and undoubtedly has led to an impressive turnaround of the previously crisis-ridden port, more recently local stakeholders such as municipal politicians, shipowners, and labor unions have begun to push back. Their protests have prevented the government from approving the construction of a new container terminal at the port (although it is generally expected that a compromise will eventually be found for the final stake to be acquired by COSCO). In another case, in Georgia, local workers launched a strike against the Chinese company building the Tbilisi–Batumi railway over concerns about low pay and bad working conditions. China’s bid for the Anaklia port received pushback over local concerns that it would not provide sufficient employment opportunities. In contrast, fewer protests from local labor unions and civil society have occurred in Hungary, despite similar concerns about the terms of certain Chinese deals and the lack of economic opportunities they bring. The country’s democratic decline and clampdown on civil society have opened doors for new Chinese projects. One notable exception is the recent public backlash against the Fudan University campus in Budapest.

These examples point to the clear limits of China’s business model in Europe. While perhaps suitable in developing countries with fewer restrictions, some Chinese companies are less well equipped to handle situations in Europe when faced with tough legal or environment requirements or when subject to government and public scrutiny.

Deeply rooted orientation to and dependence on the West

While China has sought to increase its role and influence in the region, these countries remain highly integrated with Europe and dependent on the West overall. Democratic governance also builds resilience, as elections can significantly alter a country’s domestic, economic, and foreign policies. Democratic governance, especially when it leads a Chinese-friendly European country to pivot back toward its traditional transatlantic partners, can complicate Beijing’s efforts to engage the region.

Greece’s current government is less friendly to Beijing than previous administrations were, a development underpinned by a combination of apprehension about China and the need for security partnerships with the United States and NATO amid regional tensions in the eastern Mediterranean. Instability in the Black Sea has also reinforced Georgia’s and Romania’s partnerships with the West. Although Georgia is not a member of the EU and NATO, it remains firmly aligned with both. And despite its historical ties with China, Romania has made a concerted choice in recent years under the current president, Klaus Iohannis, to reinforce ties with the United States and to reassure the EU of its commitment.

In these three countries, Washington and Brussels have also been able to push policies such as anti-corruption efforts, impose new FDI screening mechanisms, limit Chinese telecommunications giant Huawei from building 5G wireless networks, or cancel deals with Chinese state-owned companies in critical sectors. Once again, the clear outlier here is Hungary, which remains a uniquely complicated member of the EU and NATO. Orbán, Hungary’s long-serving leader, has proven a reliable partner for China even as other European countries have become more skeptical toward Beijing. For instance, Hungary has so far resisted pressure from Washington to prevent Huawei from building out the country’s 5G infrastructure.

Limited effectiveness of soft power efforts

While China has repeatedly sought to make use of soft power efforts, it appears that these have had fairly little impact improving China’s image in the region. Even in countries where perceptions of China were largely positive or neutral, opinions have soured in recent years, especially during the COVID-19 pandemic. Even in Hungary, where the pandemic led to closer cooperation between Budapest and Beijing and where officials and pro-government media have touted China’s assistance, public perceptions of China have further deteriorated.

Accounting for the limited impact of Chinese soft power in the region is, first, the fact that local people have limited interest in Chinese affairs, its culture, or its model. In addition, it is also possible that China’s inability to deliver on its economic promises, the growing international criticism of Beijing, and China’s perceived role in the pandemic have all reduced the effectiveness of its public diplomacy. Moreover, while China maintains legacy relationships and has made inroads with certain elite groups, younger generations in countries like Greece and Romania tend to be more pro-Western and skeptical of China. Chinese academic scholarships and Confucius Institutes do not add up to very much when compared to academic opportunities in the EU, the UK, or the United States. However, plans for a new massive Fudan University campus in Hungary would mark a major shift in China’s soft power presence; given the lack of clarity from where its student body will hail, it also could eventually bring an influx of Chinese students to Budapest and offer them a glimpse of life in the EU.

Finally, there is little coverage of China in local news in the four countries due to a lack of foreign correspondents in China and a lack of local academics or experts focusing on China. For example, coverage of China in the Greek press tends to be negative (with the exception of the BRI), while coverage of Sino-Greek relations tends to be presented fairly positively. Nor does China possess a very strong public voice in the local press, aside from the occasional op-ed penned by the embassy and placed in a local newspaper. The exception, once again, is Hungary, where pro-government media outlets have actively promoted Hungarian-Chinese ties and the Chinese ambassador frequently gives interviews to local press. While China has established some media partnerships that could give it a platform to promote Chinese narratives and shape reporting on China, such as in Greece, these appear not to have had any significant impact on shaping public perceptions. Meanwhile, Chinese media coverage of its relations with European countries is mainly aimed at its own domestic audience back home.

The main goal of China’s soft power influence in the region does not appear to be winning hearts and minds more broadly, but rather to target certain influential political and economic elites. While China engages in some soft power efforts, such as people-to-people exchanges and cultural activities, most of these are small-scale or legacy relationships with little current relevance.

RECOMMENDATIONS FOR THE UNITED STATES, THE EU, AND REGIONAL COUNTRIES

China’s global rise has created new challenges for Washington, Brussels, and individual European governments. Beijing offers ready-made solutions to countries that struggle with poverty, economic turmoil, and uneven development. China provides an alternative to the West, helping countries gain leverage with their traditional partners (or adversaries) and seek balance in their foreign policy. That is not necessarily a bad thing. Yet China also aims to assert its political influence—not just in individual states but on the geopolitical stage—by stoking problems and complicating consensus in the West on policy issues of importance to Beijing. China also seeks to take advantage of lax regulatory regimes and regional elites who are eager to be captured, often for financial or political gain, thus fueling local corruption. However, while this sort of economic engagement with Beijing may lead to the enrichment of a few, it does not lift others out of poverty. Ultimately, it may lead to periods of backlash, against both China and its local interlocutors.

China has not been uniformly successful across Southeastern, Central, and Eastern Europe. Two of its showcase initiatives, the BRI and the 17+1 format, have had more symbolic than actual influence. However, the story is notably different for many countries in the Western Balkans such as Serbia where China is leveraging a considerable amount of influence. Some societies are proving more resilient than others at identifying the perils of engaging with Beijing and weighing those risks against the potential rewards. Furthermore, while it is important to discern China’s growing influence in the region, not every instance of Chinese soft power is effective or inherently negative. Chinese vaccine diplomacy for example, may be aimed at improving China’s image, but can also enhance public health even though the efficacy of Chinese-made vaccines has been questioned. Educational exchanges and Chinese-language programs may build Beijing-friendly constituencies, but greater awareness of and knowledge about China could yield both positive and negative results. Understanding China is an essential step toward meeting the challenge Beijing poses to the liberal international order. Similarly, exposure by Chinese students to life in the West should be welcomed and great lengths should be made to ensure that Chinese citizens studying or working in Europe do not become subject to racist backlashes. Leaders in the West therefore should develop multipronged and nuanced approaches to address these issues:

  • Avoid depicting Southeastern, Central, and Eastern Europe as a Chinese Trojan horse. It has become commonplace in Western policy and expert circles in recent years to refer to countries in Southeastern, Central, and Eastern Europe as “bought” by China. The reality, however, is that the vast majority of Chinese investments in Europe are in a handful of Western European countries and only a small percentage in Southeastern, Central, and Eastern Europe—far from enough to make these countries economically dependent on China.
  • Don’t overplay China’s economic influence. Similar to elsewhere in Europe, regional states initially looked toward China as an economic opportunity. But gradually, they have become disillusioned and come to realize that their European partners are far more economically important. Moreover, geopolitical shifts in the eastern Mediterranean and Black Sea regions have pushed states to reinvigorate security ties with the United States, given their reliance on Washington and NATO as security guarantors. Negative views toward Russia have also reinforced skepticism of China. The real exception is Hungary, which remains a close partner to China in Europe and has, on several occasions, sought to undermine or block EU foreign policy statements and decisions pertaining to China. While China likes to present itself as an economic savior, the West should avoid feeding into this narrative when it is not warranted by facts on the ground.
  • Better understand local interests. The Trump administration’s framing of competition with China as a binary choice was not helpful, because it put countries in the difficult spot of having to choose between either the West or Beijing. In reality, regional states often are forced to balance. The United States and the EU should recognize that countries in Southeastern, Central, and Eastern Europe have legitimate reasons to work with China and that not all Chinese-funded projects are by definition malign. Chinese projects that are transparent and bring tangible benefits can be beneficial. Those that take advantage of crony capitalism, create heavy debt burdens, or violate environmental or labor norms are certainly not.
  • Avoid assigning strategic significance to all of China’s actions. Many of Beijing’s economic activities are commercial and uncontroversial in nature. Making sure that Chinese overseas citizens and legitimate Chinese businesses in Europe are not unduly targeted or face racist backlashes is vitally important. Yet, cheap Chinese goods sometimes risk flooding local markets and undercut local production and economies. As the four case country analyses suggest, China’s own activities do not adhere to a one-size-fits-all format. Instead, they are often tailored to individual countries’ national contexts and needs. Washington and Brussels should avoid employing a “whack-a-mole” approach to China’s activities in the region. A better strategy would be to, on the one hand, seek to better understand local demands and, on the other, provide technical training to increase officials’ ability to evaluate the impacts of proposed Chinese projects. Similarly, Southeastern, Central, and Eastern European countries should weigh their own specific long-term needs against what Chinese and other international companies are offering. Quick money and a rapidly developed infrastructure project might be a short-term fix for a sitting politician but may not be sustainable for the country in the long run.
  • Promote good governance and build local resilience. Local institutions and regulatory frameworks have a significant bearing on China’s ability to exert political influence in countries. In other words, the problem is not always China’s economic activities, per se, but whether local countries have the ability to absorb and manage them effectively. Rather, when China can bypass tender processes, neglect environmental impact studies, or cut shady deals, it is able to exert political influence most effectively. U.S. and EU support to vulnerable countries in Southeastern, Central, and Eastern Europe should therefore focus on strengthening government institutions and regulatory frameworks, enhancing the rule of law and judicial systems, improving the accountability and transparency of contracts, and rooting out corruption and state or elite capture. Progress on shoring up resilience, however, must be driven by demand. In some places, that will be easier. In others, it may mandate both carrots (such as investments in technical assistance) and sticks (like pushing countries to adopt and comply with EU regulations on investment screening and transparency around procurement). Biden’s upcoming Democracy Summit provides an opportunity to put corruption and kleptocracy front and center on the agenda with regional states and other partners.
  • Strengthen civil society capacity. Understanding China is key to building resilience and driving demand for reforms that could curb Beijing’s ability to stoke fissures in the West and complicate Chinese commercial entities’ knack for capturing elites. Strong local civil society—such as labor unions, environmental groups, robust media, vocal opposition parties, and local communities—is needed to ensure accountability. Georgian, Greek, and Romanian civil societies have pushed back on some questionable Chinese projects. Even in Hungary, where civil society is markedly weaker, there are examples of strong pushback from local politicians and civil society against some of China’s more egregious actions. The United States and the EU should enhance their support to independent journalists and analysts, particularly in Hungary. The EU should facilitate independent analytical voices on China by funding China studies programs at universities and think tanks and promoting the sharing of information among pan-European China experts. The United States and the EU should also work with local politicians and members of parliament in regional states who may sometimes be more willing to openly criticize China than national leaders.
  • Don’t overfocus on soft power. While China has actively tried to promote itself by leveraging a variety of soft power efforts—such as media outreach, cultural events, academic partnerships, and cooperation with NGOs and political groups—these efforts tend to be small-scale in nature and not particularly influential. Most of China’s soft power outreach targets certain influential elites rather than entire citizenries. Even the Confucius Institutes, which have garnered a lot of attention in the West for being potential vectors of malign Chinese influence, appear to be mostly inconsequential, though there is still a need to ensure that regional universities conduct thorough due diligence when entering into academic partnerships with China. Here the United States and the EU should step in and provide alternative funding to build up local research centers focusing on understanding China consistent with European values. A clear illustration of Beijing’s limited soft power reach is the fact that regional perceptions of China have soured recently in all four countries, especially during the COVID-19 pandemic. This suggests that China’s narratives do not appeal to most people in the region, especially younger generations who tend to be more oriented toward the West. Though there is still a great deal of interest in Beijing as an economic partner, China itself, its model, and its international behavior are far less attractive.
  • Be present and provide alternatives. The combination of economic weakness and the lack of financing in some of countries has provided opportunities for China to step in over the past decade. Rather than lamenting this fact or telling countries not to accept Chinese offers, Washington and Brussels should step up their own economic engagement to provide more attractive alternatives with better terms and with more positive impact on local economies. This again will mandate demand-driven reforms to improve the investor climate and the rule of law. There is also a risk that countries such as Greece or Georgia (or many of their neighbors) could be more economically vulnerable after the pandemic, thus providing opportunities for China to swoop in like it did after the 2008 global financial crisis. Lessons learned about why China was able to exploit the privatization of state-assets in Greece imposed by international creditors should inform increased spending on infrastructure projects and relaxed EU budget rules. Elsewhere in Central Europe, efforts such as the U.S.-led Three Seas Initiative are particularly relevant and should be scaled up and expanded in scope jointly with the EU and wealthy member states like Germany. There is a need to bolster investment in the regional infrastructure projects through the European Investment Bank, the World Bank, the International Monetary Fund, and the new U.S. International Development Finance Corporation. At the same time, lenders—as well as investors like the European Investment Bank or the European Commission’s structural funds—should insist that tender processes are fully transparent and increase their scrutiny of projects awarded to state-owned Chinese companies. Finally, U.S. embassies in the region should share more information with local officials about the risks of dealing with certain Chinese state-owned companies with a poor reputation or bad track record in delivering economic results.
  • Hold Orbán and his cronies accountable. While Hungary’s relationship with China has been growing for the past decade, Budapest’s interventions in EU policymaking on Beijing’s behalf have been largely symbolic—until recently. Its 2021 decisions to block two EU foreign policy statements related to China are a wake-up call, mandating joint pushback from both Washington and Brussels. The Trump administration bypassed the EU and tried to cultivate relations with Orbán, ultimately with little to show. Mindful of its own domestic democratic challenges and more limited economic clout over Budapest, the United States should not shy away from pushing the EU and key member states (especially Germany, which is Hungary’s most important trading partner) to impose greater pressure on Orbán, including the potential use of sanction mechanisms against officials and businessmen engaged in local corruption schemes involving China. Brussels should consider applying the EU’s rule of law conditionality regime.
  • Leverage Western attractiveness. There are clear limits to how well China’s narratives are resonating in the region, especially among younger generations. The United States and the EU should cultivate rising regional leaders by extending more scholarships and academic partnerships, offering economic opportunities, and easing visa restrictions. Moreover, Washington should leverage vital security ties since, ultimately, China has less to offer when it comes to European countries’ security or long-term economic sustainability. Even Hungary, which has embraced illiberal democracy and likes to say that it has alternatives, has few illusions about partnering with China. Countries such as Greece and Romania are both strong EU and NATO members and careful about safeguarding their standing in these organizations. It does not appear that any amount of Chinese soft power or economic opportunities could alter this orientation. Even Georgia—which is not a member of either the EU or NATO and has a strong desire to counter the threat posed by Russia—is unlikely to embrace China for fear of upsetting relations with Washington and Brussels, both of whom are far more important to Tbilisi than Beijing. Moreover, the United States and the EU should counter China’s claims about its economic benevolence by pointing out that almost all countries in Europe have a sizable trade deficit with China and that long-term economic cooperation with China has generated few tangible results.
  • Reassure smaller states that the West has a lot to offer. When it comes to smaller countries in the region, the West should remind their governments, business leaders, and the public at large that Chinese investment generally pales in comparison to what they receive from the United States and the EU. In Hungary, for example, Chinese investments in the country have done little to boost employment while creating a sizable debt burden for the government. Even the much-touted BRI has not been able to deliver substantially in Hungary, despite close relations. Finally, since China frequently sends high-level political and business delegations to relatively small European countries to demonstrate its commitment, the United States, Germany, France, and other EU states must provide more senior-level attention and reward pro-Western leaders with direct engagement.
  • Deny China diplomatic openings. In Georgia, the United States and the EU failed to help the government acquire enough Western-manufactured COVID-19 vaccines. In Hungary, the EU’s slow vaccine rollout presented an opportunity for Orbán to highlight his alternatives. In both cases, China stepped in to fill the void. These are missteps that cannot be undone but avoiding similar policy shortcomings in the future is critical, particularly in regions where the pandemic continues to ravage public health and local economies. Furthermore, enhancing awareness that Beijing’s mask and vaccine diplomacy was largely conducted on a commercial—not humanitarian—basis can help highlight differences between the benefits of EU membership or U.S. assistance programs and limited Chinese largesse.

ABOUT THE AUTHORS

Erik Brattberg is director of the Europe Program and a fellow at the Carnegie Endowment for International Peace in Washington. He is an expert on European politics and security and transatlantic relations.

Philippe Le Corre is a nonresident senior fellow in the Europe and Asia Programs at the Carnegie Endowment for International Peace. He is also a research fellow with the Harvard Kennedy School (the Ash Center for Democratic Governance and Innovation and the Mossavar-Rahmani Center for Business and Government) and a former counselor to the French minister of defense.

Paul Stronski is a senior fellow in Carnegie’s Russia and Eurasia Program, where his research focuses on Russia, Central Asia, Eastern Europe, and the South Caucasus. He previously worked in China as a U.S. Foreign Service officer.

Thomas de Waal is a senior fellow with Carnegie Europe, specializing in Eastern Europe and the Caucasus region. He is the author of numerous publications about the region. The second edition of his book The Caucasus: An Introduction (Oxford University Press) was published in 2018.

ACKNOWLEDGMENTS

The authors would like to thank Thomas Carothers, Evan Feigenbaum, Andreea Brinza, Tamas Matura, Rui Pinto, Plamen Tonchev, and Boris Wenzel for helpful feedback on earlier drafts as well as Venesa Rugova, Alexander Taylor, and Tatyana Pyak for research assistance and support. Funding for this project was provided by a grant from the U.S. State Department. The paper was informed by interviews, media monitoring in local languages, and four workshops with local experts and decisionmakers from the four case countries held between September 2020 and March 2021.

NOTES

1 “EU-China – A Strategic Outlook,” European Commission, March 12, 2019, https://ec.europa.eu/info/sites/default/files/communication-eu-china-a-strategic-outlook.pdf.

2 “Xi Eyes Deeper Cooperation on Occasion of Visit to Greece,” I Kathimerini, November 10, 2019, https://www.ekathimerini.com/news/246317/xi-eyes-deeper-cooperation-on-occasion-of-visit-to-greece/.

3 Laura Silver, Kat Devlin, and Christine Huang, “Large Majorities Say China Does Not Respect the Personal Freedoms of Its People,” Pew Research Center, June 30, 2021, https://www.pewresearch.org/global/2021/06/30/large-majorities-say-china-does-not-respect-the-personal-freedoms-of-its-people/.

4 Sima Qian, Records of the Grand Historian of China, trans. Burton Watson, 2nd ed. (1961; New York: Columbia University Press, 1993).

5 Plamen Tonchev, et al., “China Image in Greece, 2008-2018,” Institute for International Economic Relations, October 2018.

6 Xi Jinping, “Speech by Chinese President Xi Jinping to Indonesian Parliament,” ASEAN-China Centre, October 3, 2013, http://www.asean-china-center.org/english/2013-10/03/c_133062675.htm. The BRI, launched by President Xi Jinping in Astana, Kazakhstan, in 2013, is often referred to as a “New Silk Road” in Greece.

7 For example, both Sweden and the United Kingdom established diplomatic relations with the People’s Republic of China in 1950, while France opened its embassy in 1964.

8 “The Joint Communiqué Between the People’s Republic of China and the Republic of Greece on the Establishment of Comprehensive Strategic Partnership,” China’s Ministry of Foreign Affairs, January 19, 2006, https://www.fmprc.gov.cn/mfa_eng/wjdt_665385/2649_665393/t233106.shtml.

9 In January 2016, the state-owned enterprise officially renamed itself “China COSCO Shipping Corporation” following the merger of COSCO Group and China Shipping Group.

10 Thanks to the formation of China COSCO Shipping Corporation, followed by the acquisition of OOCL in 2018, COSCO has now become the fourth-largest in the world. See https://www.yumpu.com/en/document/view/49757851/axs-alphaliner-top-100-operated-fleets-as-per-06-december-2008.

11 Plamen Tonchev, “Sino-Greek Relations: Marked By Values or Opportunism?,” in “Political Values in China-Europe Relations,” edited by Tim Nicholas Rühlig et al, Swedish Institute of International Affairs et al, December 2018, https://merics.org/sites/default/files/2020-04/190108_ETNC_report_2018_updated_2019.pdf.

12 The Syriza government was elected in large part due to anger at EU-imposed austerity, but then had to agree to it.

13 Robin Emmott, “EU’s Statement on South China Sea Reflects Divisions,” Reuters, July 15, 2016, https://www.reuters.com/article/southchinasea-ruling-eu-idUSL8N1A130Y.

14 Nick Cumming-Bruce and Somini Sengupta, “In Greece, China Finds an Ally Against Human Rights Criticism,” New York Times, June 19, 2017, https://www.nytimes.com/2017/06/19/world/europe/china-human-rights-greece-united-nations.html.

15 “Container Ports: An Engine of Growth,” National Bank of Greece, April 2013, p. 1.

16 Interview conducted on May 23, 2021.

17 Olaf Merk, “China’s Participation in European Container Ports: Drivers and Possible Future Scenarios,” Revue internationale et stratégique, no. 117 (2020): 41–53, https://www.cairn.info/revue-internationale-et-strategique-2020-1-page-41.htm?contenu=resume.

18 “Top 20 Ports Handling Containers, 2008-2018 (Thousand TEUs),” Eurostat, March 6, 2020, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=File:Top_20_ports_handling_containers,_2008-2018_(thousand_TEUs).png.

19 “One Hundred Ports 2020,” Lloyd’s List, 2020, https://lloydslist.maritimeintelligence.informa.com/one-hundred-container-ports-2020.

20 Thanks to Boris Wenzel for detailed information concerning transshipment and port activities in Greece and the rest of Europe.

21 Frans-Paul van der Putten and Minke Meijnders, “China, Europe and the Maritime Silk Road,” Clingendael, March 2015.

22 Frans-Paul van der Putten, “Chinese Investment in the Port of Piraeus,” Clingendael, 2014, https://www.clingendael.org/sites/default/files/2016-02/2014%20-%20Chinese%20investment%20in%20Piraeus%20-%20Clingendael%20Report.pdf.

23 The hospitality part of the deal is still uncertain due to local opposition.

24 The cruise terminal, the largest of eleven mandatory investments by COSCO, is co-funded through EU structural funds, in particular through Greece’s 2014–2020 National Strategic Development Framework. See https://www.efsyn.gr/oikonomia/elliniki-oikonomia/229847_stin-tekal-i-nea-problita-kroyazieras.

25 Jacob Mardell, “Some Athenians Are All Greek to the Chinese,” MERICS, July 11, 2019, https://merics.org/en/analysis/some-athenians-are-all-greek-chinese.

26 Christina Papastathopoulou, “In Parliament: The Protection of SMEs in Question,” Efsyn, November 19, 2020, https://www.efsyn.gr/oikonomia/elliniki-oikonomia/269339_sti-boyli-i-prostasia-ton-mikromesaion-naypigoepiskeyaston.

27 Interview conducted on March 4, 2021.

28 “2017 Oceanic Development Report” (in Chinese), Beijing Haiyang Press, 2017, chapter 5, p. 69.

29 Michael McDevitt, “Becoming a Great Maritime Power: A Chinese Dream,” CNA, June 2016, https://www.cna.org/news/events/china-and-maritime-power.

30 Plamen Tonchev, “Sino-Greek Relations in Greek and Chinese Media, 2020,” Institute of International Economic Relations, March 2021, p. 11, https://idos.gr/wp-content/uploads/2021/03/Sino-Greek-Relations_in_Media_18-3-2021.pdf.

31 See https://www.e-nomothesia.gr/kat-naytilia-nausiploia, January 29, 2021.

32 Matthew P. Funaiole, “China’s Opaque Shipyards Should Raise Red Flags for Foreign Companies,” Center for Strategic and International Studies, February 26, 2021, https://www.csis.org/analysis/chinas-opaque-shipyards-should-raise-red-flags-foreign-companies?utm_source=CSIS+All&utm_campaign=f503019735-EMAIL_CAMPAIGN_2018_09_04_03_13_COPY_01&utm_medium=email&utm_term=0_f326fc46b6-f503019735-222734778.

33 Tonchev, “Sino-Greek Relations in Greek and Chinese Media, 2020.” https://www.efsyn.gr/oikonomia/elliniki-oikonomia/269553_b-marinakis-kanena-ofelos-gia-ton-peiraia-apo-tin-cosco.

34 Efimerida Syntakton, April 27, 2021, www.mononews.gr.

35 Interview conducted on May 5, 2021.

36 Interview conducted on April 14, 2021.

37 “Greece Eyes Chinese Investment for Post-Pandemic Recovery,” China Global Television Network (CGTN), April 26, 2021, https://www.xindemarinenews.com/en/market/2021/0426/28950.html.

38 “Tangier Med Takes Mediterranean Top Container Port Crown in 2020,” Sea Trade Maritime News, March 17, 2021, https://www.seatrade-maritime.com/ports-logistics/tangier-med-takes-mediterranean-top-container-port-crown-2020.

39 Merk, “China’s Participation in European Container Ports.”

40 “China Merchants to Install TOS at Port of Thessaloniki,” Container Management, July 16, 2020, https://container-mag.com/2020/07/16/china-merchants-to-install-tos-at-port-of-thessaloniki/.

41 “Introduction of Bank of China (Luxembourg) S.A. Athens Branch,” Bank of China, July 3, 2020, https://www.bankofchina.com/gr/en/aboutus/ab1/202007/t20200703_18086650.html.

42 “‘No’ From EIB to Gongbao for National Insurance,” I Kathimerini, October 18, 2018, https://www.kathimerini.gr/economy/business/990497/ochi-apo-ete-se-gongbao-gia-tin-ethniki-asfalistiki/.

43 Stelios Mpoyras, “Foreign Investors Cool on Hellinikon Project,” Business Daily, March 3, 2021, https://www.businessdaily.gr/english-edition/37713_foreign-investors-cool-hellinikon-project.

44 Giannis Seferiadis, “Greece Joins ‘Anti-Huawei Camp’ as US Seals Stronger Ties,” Nikkei, October 5, 2020, https://asia.nikkei.com/Spotlight/Huawei-crackdown/Greece-joins-anti-Huawei-camp-as-US-seals-stronger-ties.

45 “Leading Inbound Travel Markets for Greece in 2019 and 2020, by Number of Arrivals,” Statista, April 2021, https://www.statista.com/statistics/444854/main-international-travel-markets-for-greece/.

46 Tonchev, “Sino-Greek Relations in Greek and Chinese Media, 2020.”

47 In October 2020, the European Commission has launched infringement procedures against Cyprus and Malta by issuing letters of formal notice regarding their investor citizenship schemes also referred to as “golden visa” schemes. Greece has so far not been targeted. See “Investor Citizenship Schemes: European Commission Opens Infringements Against Cyprus and Malta for ‘Selling’ EU Citizenship,” European Commission, October 20, 2020, https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1925.

48 “Roundup: Greek Residential Property Market to Reset in Post-COVID-19 Era, Experts Say,” Xinhua, November 27, 2020, http://www.xinhuanet.com/english/2020-11/27/c_139545579.htm.

49 Golden visas are openly advertised on some websites, which include pictures of Santorini island. See https://getgoldenvisa.com/ultimate-guide-to-greece-golden-visa.

50 Pedro Gonçalves, “Greece Mulls Golden Visa Overhaul,” International Investment, April 7, 2021, https://www.internationalinvestment.net/news/4022892/greece-mulls-golden-visa-overhaul.

51 “Investor Citizenship Schemes,” European Commission.

52 The Chinese state does not allow dual citizenships.

53 Tonchev, “Sino-Greek Relations in Greek and Chinese Media, 2020.”

54 The forum was attended by ministers from China, Greece, Peru, Mexico, and Bolivia. See “Ancient Civilizations Forum (Athens, 24 April 2017),” Greek Ministry of Foreign Affairs, March 29, 2017, https://www.mfa.gr/en/foreign-policy-issues/cultural-diplomacy/ancient-civilizations-forum-athens-24-april-2017.html. There are currently three Confucius Institutes in Greece.

55 Elisseos Vagenas, “The International Role of China,” Communist Party of Greece, 2010, https://inter.kke.gr/en/articles/The-International-role-of-China.

56 “Greece-China Call for Proposals for Joint RT&D Projects,” Operational Programme Competitiveness, Entrepreneurship & Innovation (EPAnEK), http://epan2.antagonistikotita.gr.

57 Jens Bastian, “External Actors Series: China,” Southeast Europe in Focus no. 6 (2020): 11, https://www.sogde.org/de/publikationen/southeast-europe-in-focus/.

58 “The First ‘Online Chinese Language Classroom’ Settled in the University of the Aegean,” Study in Greece, November 5, 2020, https://studyingreece.edu.gr/the-first-online-chinese-language-classroom-settled-in-the-university-of-the-aegean/.

59 The Mitsotakis government turned down the opportunity to host the next 17+1 summit in 2022.

60 In an interview, Tsipras had good things to say about Mao Zedong and the Cultural Revolution in China. See https://www.schooligans.gr/articles/92.

61 Jason Horowith and Liz Alderman, “Chastised by E.U., a Resentful Greece Embraces China’s Cash and Interests,” New York Times, August 26, 2017, https://www.nytimes.com/2017/08/26/world/europe/greece-china-piraeus-alexis-tsipras.html.

62 “Xi Eyes Deeper Cooperation on Occasion of Visit to Greece,” I Kathimerini.

63 Plamen Tonchev and Angelos Bentis, “The Thrill Is Gone: China’s Diminishing Appeal in Greece,” in “China’s Soft Power in Europe: Falling on Hard Times,” edited by Ties Dams, Xiaoxue Martin, and Vera Kranenburg, Clingendael, April 2021, https://merics.org/sites/default/files/2021-04/ETNC%202021%20-%20China%27s%20Soft%20Power%20in%20Europe%20-%20Falling%20on%20Hard%20Times.pdf.

64 Tonchev, “Sino-Greek Relations in Greek and Chinese Media, 2020.”

65 For example, France, the Czech Republic, or Sweden.

66 Plamen Tonchev, ed., “China’s Image in Greece,” Institute of International Economic Relations, October 2018, https://idos.gr/wp-content/uploads/2018/10/China-Image-in-Greece_9-10-2018.pdf.

67 Laura Silver, Kat Devlin, and Christine Huang, “People Around the Globe Are Divided in Their Opinions of China,” Pew Research Center, December 5, 2019, https://www.pewresearch.org/fact-tank/2019/12/05/people-around-the-globe-are-divided-in-their-opinions-of-china/.

68 “Life With the Coronavirus and the Day After,” Kapa Research, April 2020, https://kaparesearch.com/wp-content/uploads/2020/04/2020.04_Kapa_Covid19.pdf.

69 Tonchev, “Sino-Greek Relations in Greek and Chinese Media, 2020.”

70 “Chinese Diplomat Calls for Building Piraeus Port Into World-Class Port,” CGTN, September 5, 2020, https://news.cgtn.com/news/2020-09-05/Chinese-diplomat-calls-for-building-Piraeus-Port-into-world-class-port-TwYmfnscQ8/index.html.

71 See the photo hosted by Greece’s Ministry of National Defense, https://www.mod.mil.gr/synantisi-yetha-n-panagiotopoyloy-ton-ypam-l-d-kinas-goyei/.

72 “Xi Eyes Deeper Cooperation on Occasion of Visit to Greece,” I Kathimerini. This is a clear reference to Shanghai, described in Chinese literature as the “dragon head of the Yangtze River Delta, the Yangtze River basin, and more broadly, China, into the 21st century through rapid economic growth and dynamic integration into the global economy.” See: Cheng Li, “Reclaiming the ‘Head of the Dragon’: Shanghai as China’s Center for International Finance and Shipping,” May 14, 2009, Brookings Institution, https://www.brookings.edu/articles/reclaiming-the-head-of-the-dragon-shanghai-as-chinas-center-for-international-finance-and-shipping/.

73 Tonchev and Bentis, “The Thrill Is Gone: China’s Diminishing Appeal in Greece.”

74 Xinhua, “China, Greece to Pool Wisdom for Community With Shared Future for Mankind,” Cooperation Between China and Central and Eastern European Countries, November 11, 2019, http://www.china-ceec.org/eng/zyxw_4/t1717301.htm.

75 McDevitt, “Becoming a Great Maritime Power.”

76 Wang Yiwei, “One Belt One Road: Opportunities for Europe-China Cooperation,” Friends of Europe, May 13, 2015, https://www.friendsofeurope.org/insights/one-belt-one-road-opportunities-for-europe-china-cooperation/.

77 “Prime Minister Kyriakos Mitsotakis’ Interview to Ben Hall at The Global Boardroom Digital Conference,” Prime Minister of Greece’s official website, May 5, 2021, https://primeminister.gr/en/2021/05/05/26464.

78 Interview with a Hungarian political analyst, March 21, 2021.

79 From a private memo provided to Carnegie by Tamas Matura, “Chinese Influence Efforts in the Hungarian Media December 2020-March 2021,” March 2021.

80 Richard Q. Turcsányi, et al., “European Public Opinion on China in the Age of COVID-19,” Central and Eastern European Institute for Asian Studies, November 2020, https://mershoncenter.osu.edu/sites/default/files/2021-02/European%20opinion%20on%20China%20Pete%20Gries%20.pdf.

81 “Orbán Praises Chinese Companies in Hungary, China’s Silk Road Plan,” Hungary Today, May 24, 2019, https://hungarytoday.hu/orban-chinese-companies-hungary-china-silk-road/.

82 ‪Péter Vámos, “A Hungarian Model for China? Sino-Hungarian Relations in the Era of Economic Reforms, 1979-89,” Cold War History 18, no. 3 (2018): 361–378.

83 “Dignitaries Met 2000 – 2004,” Office of His Holiness the Dalai Lama, accessed August 10, 2021, https://www.dalailama.com/the-dalai-lama/events-and-awards/dignitaries-met/dignitaries-met-2000-2004.

84 Wade Jacoby and Umit Korkut, “Vulnerability and Economic Re-orientation: Rhetoric and in Reality in Hungary’s ‘Chinese Opening,’” East European Politics and Societies 30, no. 3 (2016).

85 Agnes Szunomar, “Hungarian and Chinese Economic Relations and Opportunities Under the Belt and Road Initiative,” China-CEE Institute, December 2017; Yuhong Shang, Nina Ponikvar, and Katja Zajc Kejzar, “The Changing Patterns of China-CEE Trade,” Europe-Asia Studies 68, no. 9 (November 2016).

86 Szabolcs Panyi, “Hungary Could Turn Into China’s Trojan Horse in Europe,” Balkan Insight, April 9, 2021, https://balkaninsight.com/2021/04/09/hungary-could-turn-into-chinas-trojan-horse-in-europe/.

87 Matura, “Chinese Influence Efforts in the Hungarian Media December 2020-March 2021”; and Martin Hala, “China in Xi’s ‘New Era’: Forging a New ‘Eastern Bloc,’” Journal of Democracy 28, no. 2 (April 2018).

88 Szunomar, “Hungarian and Chinese Economic Relations and Opportunities Under the Belt and Road Initiative.”

89 “Former Hungarian Prime Minister, Dr. Medgyessy’s Speech at UIBE,” The World and China, https://theworldandchina.com/?p=216; “Former Hungarian Prime Minister Visits Sias,” Sias University, http://en.sias.edu.cn/contents/208/29406.html; “Interview: Former Hungarian PM Advocates Learning From China’s Anti-poverty Experience,” SINA Corporation, December 18, 2020, http://english.sina.com/world/e/2020-12-18/detail-iiznctke7244702.shtml.

90 Szunomar, “Hungarian and Chinese Economic Relations and Opportunities Under the Belt and Road Initiative.”

91 Vajna Tamás, “A „gyerekminőség” növelése miatt választották Magyarországot, de sokszor csalódnak a magyar iskolákban az itt letelepedett kínaiak,” Qubit, December 15, 2020, https://qubit.hu/2020/12/15/a-gyerekminoseg-novelese-miatt-valasztottak-magyarorszagot-de-sokszor-csalodnak-a-magyar-iskolakban-az-itt-letelepedett-kinaiak; Shang, Ponikvar, and Kejzar, “The Changing Patterns of China-CEE Trade.”

92 Agnes Szunomar and Tamas Peragovics, “Hungary: An Assessment of Chinese-Hungarian Economic Relations,” in “Comparative Analysis of the Approach Towards China: V4+ and One Belt One Road,” Prague Security Studies Institute, June 3, 2019, http://real.mtak.hu/100137/1/jav_681_final-report.pdf.

93 “Prime Minister Viktor Orban Speaks About Building Eurasia,” Cabinet Office of the Prime Minister, November 10, 2018, https://miniszterelnok.hu/prime-minister-viktor-orban-speaks-about-building-eurasia/.

94 Li Qian “China, Hungary Establish Comprehensive Strategic Partnership,” CGTN, May 13, 2017, https://news.cgtn.com/news/3d596a4e31677a4d/share_p.html.

95 “PM Orbán at China-CEEC Summit: The Coronavirus Pandemic Marks the Beginning of a “New Era” in Global Economics and Politics,” About Hungary, February 9, 2021, https://abouthungary.hu/news-in-brief/pm-orban-at-china-ceec-summit-the-coronavirus-pandemic-marks-the-beginning-of-a-new-era-in-global-economics-and-politics.

96 “China, Hungary to Strengthen Military Cooperation,” CGTN, March 25, 2021, https://newseu.cgtn.com/news/2021-03-25/China-s-Defense-Minister-visits-Budapest-for-official-talks-YU5IRPv8NG/index.html.

97 Panyi, “Hungary Could Turn Into China’s Trojan Horse in Europe.”

98 “Canadian-Hungarian National’s Espionage Trial in China Ends, Verdict Due Later,” Daily News Hungary, March 22, 2021, https://dailynewshungary.com/canadian-hungarian-nationals-espionage-trial-in-china-ends-verdict-due-later/.

99 “Wanhua Acquires Full Control of BorsodChem,” BorsodChem, February 1, 2011, https://www.borsodchem-pvc.com/News-Events/News/Wanhua-acquires-full-control-of-BorsodChem.aspx.

100 “Introduction of Bank of China (Central and Eastern Europe) Limited Vienna Branch,” Bank of China, August 2017, https://www.bankofchina.com/at/en/aboutus/ab1/201708/t20170802_9907339.html#:~:text=Bank%20of%20China%20%28Central%20and%20Eastern%20Europe%29%20Limited,EU%20passport%20and%20under%20the%20Hungarian%20banking%20license; “Bank of China (Hungary) Close Ltd. Prague Branch,” Bank of China, June 26, 2018, https://www.bankofchina.com/cz/en/aboutus/ab1/201801/t20180118_11195867.html.

101 “Magyar Nemzeti Bank and Bank of China Sign Master Agreement in Respect of Interbank Market Agency Business and Memorandum of Understanding on Renminbi Clearing Account Service,” Magyar Nemzeti Bank, January 24, 2017, https://www.mnb.hu/en/pressroom/press-releases/press-releases-2017/magyar-nemzeti-bank-and-bank-of-china-sign-master-agreement-in-respect-of-interbank-market-agency-business-and-memorandum-of-understanding-on-renminbi-clearing-account-service.

102 “Hungary Issues Govt Bonds in Renminbi,” China Daily, April 15, 2016, http://www.chinadaily.com.cn/business/2016-04/15/content_24567955.htm.

103 Paweł Paszak, “Huawei in Poland and Hungary. Could It Be a Part of 5G?,” Warsaw Institute, November 30, 2020, https://warsawinstitute.org/huawei-poland-hungary-part-5g/; “Biggest Mobile Vendors in Hungary in 2020, by Market Share,” Statista, May 2020, https://www.statista.com/statistics/1125320/hungary-market-share-of-mobile-vendors/; “Tablet Vendor Market Share in Hungary - April 2021,” Statcounter, April 2021, https://gs.statcounter.com/vendor-market-share/tablet/hungary.

104 Panyi, “Hungary Could Turn Into China’s Trojan Horse in Europe.”

105 “Huawei Celebrates 15 Years of Operating in Hungary,” Huawei Europe, October 21, 2020, https://huawei.eu/press-release/huawei-celebrates-15-years-operating-hungary.

106 Tamas Matura, “Chinese Investment in Hungary: Few Results but High Expectations,” in “Chinese Investment in Europe, a Country Level Approach,” edited by John Seaman, Mikko Huotari, and Miguel Otero-Iglesias, French Institute of International Relations, December 2017, https://www.ifri.org/sites/default/files/atoms/files/etnc_reports_2017_final_20dec2017.pdf.

107 Claudia Patricolo, “China’s CMC to Build CEE’s Largest Solar Plant in Hungary,” Emerging Europe, June 18, 2019, https://emerging-europe.com/business/chinas-cmc-to-build-cees-largest-solar-plant-in-hungary/.

108 “Orbán Praises Chinese Companies in Hungary, China’s Silk Road Plan,” Hungary Today, May 24, 2019, https://hungarytoday.hu/orban-chinese-companies-hungary-china-silk-road/.

109 “Bosch Plan in Miskolc Is One of the Most Innovative Units of Machine Construction-Video Report,” Hungarian Investment Promotion Agency, June 12, 2018, https://hipa.hu/the-bosch-plant-in-miskolc-is-one-of-the-most-innovative-units-of-european-machine-construction.

110 Szabolcs Panyi, “How Orbán’s Eastern Opening Brought Chinese Spy Games to Budapest,” Direkt36, March 14, 2021, https://www.direkt36.hu/en/kemjatszmakat-hozott-budapestre-orban-kinai-nyitasa/.

111 Interview conducted on February 18, 2021.

112 Nick Miller, “‘Why Are They Giving Us the Money?’ Behind China’s Plans to ‘Rescue’ a Decrepit Rail Link,” Sydney Morning Herald, June 20, 2018, https://www.smh.com.au/world/europe/why-are-they-giving-us-the-money-behind-china-s-plans-to-rescue-a-decrepit-rail-link-20180606-p4zjwk.html.

113 Ibid.; and Jonathan E. Hillman, The Emperor’s New Road: China and the Project of the Century (Yale University Press, 2020), 87.

114 European Commission, “Trans-European Transport Network (TEN-T),” https://ec.europa.eu/transport/themes/infrastructure/ten-t_en.

115 Hillman, The Emperor’s New Road.

116 Turcsányi, et al., “European Public Opinion on China in the Age of COVID-19.”

117 Tamás Matura, “Ki szereti Kínát?,” Mérce, January 20, 2021, https://merce.hu/2021/01/20/ki-szereti-kinat/.

118 Batka Zoltán, “Drága és ködös a kínai vakcinaüzlet,” Népszava, March 11, 2021, https://nepszava.hu/3112837_draga-es-kodos-a-kinai-vakcinauzlet.

119 Zolton Simon, “Hungary’s Pandemic Woe: How to Get Rid of All Those Ventilators?,” MSN, October 29, 2020, https://www.msn.com/en-us/news/world/hungary-s-pandemic-woe-how-to-get-rid-of-all-those-ventilators/ar-BB1avKYX.

120 Justin Spike, “Hungary Approves 2 More Vaccines From Outside EU Amid Spike,” Associated Press, March 22, 2021, https://apnews.com/article/europe-india-coronavirus-pandemic-china-coronavirus-vaccine-d57d4d0bd78477f444882322b1cf170e.

121 Dave Lawler, “Europe’s New Coronavirus Spike Is a Warning to the U.S.,” Axios, March 13, 2021, https://www.axios.com/europe-coronavirus-rise-us-fourth-wave-184f5e82-0668-490a-873a-6758d6de53ab.htm/.

122 Wirth Zsuzsanna and Pethő András, “Company With Murky Background Is at the Center of Hungary’s Chinese Vaccine Deal,” Direkt36, March 18, 2021, https://www.direkt36.hu/en/csak-egy-bukdacsolo-cege-volt-eddig-annak-az-amator-jeghoki-edzonek-aki-most-feltunt-az-55-milliardos-kinai-vakcinauzlet-mogott/; and Batka Zoltán, “Drága és ködös a kínai vakcinaüzlet,” Népszava, March 11, 2021, https://nepszava.hu/3112837_draga-es-kodos-a-kinai-vakcinauzlet.

123 Bill Bostock, “A Politician Tweeted a List Showing How Much the EU Has Agreed to Pay for the Leading Vaccines, Confirming Rumors of Moderna’s Sky-High Price,” Business Insider, December 19, 2020, https://www.businessinsider.com/cost-pfizer-astrazeneca-moderna-vaccine-eu-revealed-belgian-mp-2020-12.

124 Charlie Hart, “What’s Behind the EU’s Vaccine Procurement Woes?,” Chartered Institute of Procurement & Supply, February 5, 2021, https://www.cips.org/supply-management/analysis/2021/february/whats-behind-the-eus-vaccine-procurement-woes/.

125 European Center for Disease Prevention and Control, “COVID-19 Vaccine Tracker,” https://qap.ecdc.europa.eu/public/extensions/COVID-19/vaccine-tracker.html#national-ref-tab.

126 Matura, “Chinese Influence Efforts in the Hungarian Media December 2020-March 2021.”

127 Ibid.

128 Ibid.

129 Csaba Moldicz, “Hungary Social Briefing: Digitalization and Covid-19 in Hungary,” China-CEE Institute, April 2021, https://china-cee.eu/wp-content/uploads/2021/04/2021s04_Hungary.pdf.

130 Official website of the Confucius Institute of Traditional Chinese Medicine at University of Pécs, http://konfuciusz.etk.pte.hu/oktatas/kozepiskolasoknak.

131 The Chinese Student and Scholars Association Pécs Facebook page, https://www.facebook.com/Chinese-Students-and-Scholars-Association-P%C3%A9cs-123527189176870/; and the Chinese Student and Scholars Association Corvinus Facebook page, https://www.facebook.com/corvinus.ccsa/.

132 Gergely Salát and Henrietta Hegyi, “Chinese Soft Power in Action: How Hungarian Exchange Students See the Developing China,” China-CEE Institute Working Paper, 2018, https://www.academia.edu/42104007/Chinese_soft_power_in_action_how_Hungarian_exchange_students_see_the_developing_China; Panyi Szabolcs, “How Orbán’s Eastern Opening Brought Chinese Spy Games to Budapest,” Direkt36, March 14, 2021, https://www.direkt36.hu/en/kemjatszmakat-hozott-budapestre-orban-kinai-nyitasa/; and Krisztina Than, “Hungary Plans to Join Eurasian Development Bank in Eastward Diplomatic Push,” Nasdaq, April 6, 2021, https://www.nasdaq.com/articles/hungary-plans-to-join-eurasian-development-bank-in-eastward-diplomatic-push-2021-04-06.

133 Panyi, “How Orbán’s Eastern Opening Brought Chinese Spy Games to Budapest.”

134 Than, “Hungary Plans to Join Eurasian Development Bank in Eastward Diplomatic Push.”

135 Péter Licskay, “Fudan University, One of the World’s Best, to Build a Campus in Budapest by 2024,” Daily News Hungary, March 5, 2021, https://dailynewshungary.com/fudan-university-one-of-the-worlds-best-builds-campus-in-budapest-by-2024/.

136 Bodnár Zsolt, “Felfalhatja Az Autonómiájuktól Megfosztott Magyar Egyetemeket A Budapestre Készülő Kínai Egyetem, A Fudan,” Qubit, March 3, 2021, https://qubit.hu/2021/03/03/felfalhatja-az-autonomiajuktol-megfosztott-magyar-egyetemeket-a-budapestre-keszulo-kinai-egyetem-a-fudan?_ga=2.26496063.362907371.1614594660-132735454.1584357811.

137 Levente Horváth, “Fudan Hungary University: An Independent Academy?,” Hungarian Spectrum, September 25, 2020, https://hungarianspectrum.org/tag/levente-horvath/.

138 Griff Witte, “Soros-Founded University Says It Has Been Kicked Out of Hungary as an Autocrat Tightens His Grip,” Washington Post, December 3, 2018, https://www.washingtonpost.com/world/soros-founded-university-says-it-has-been-kicked-out-of-hungary-as-an-autocrat-tightens-his-grip/2018/12/03/26bdfc28-f6ed-11e8-8d64-4e79db33382f_story.html.

139 Péter Urfi, “Öt-hatezer mesterszakos hallgatót akar felvenni Magyarországon a kínai Fudan Egyetem,” 444, September 18, 2020, https://444.hu/2020/09/18/ot-hat-ezer-mesterszakos-hallgatot-akar-felvenni-a-magyarorszagon-kepzest-indito-kinai-allami-egyetem.

140 Panyi Szabolcs, “Huge Chinese Loan to Cover the Construction of Fudan University in Budapest,” Direkt36, April 6, 2021, https://www.direkt36.hu/en/kinai-hitelbol-keszul-a-magyar-felsooktatas-oriasberuhazasa-a-kormany-mar-oda-is-igerte-egy-kinai-cegnek/.

141 Horváth, “Fudan Hungary University.”

142 Péter Bucsky, “Fogy a hallgató és a pénz az egyetemeken, de a kormány kedvenceit nem kell félteni,” G7, November 30, 2020, https://g7.hu/kozelet/20201130/fogy-a-hallgato-es-a-penz-az-egyetemeken-de-a-kormany-kedvenceit-nem-kell-felteni/.

143 Panyi, “Huge Chinese Loan to Cover the Construction of Fudan University in Budapest.”

144 “DOD Releases List of Additional Companies, in Accordance With Section 1237 of FY99 NDAA,” U.S. Department of Defense, August 28, 2020, https://www.defense.gov/Newsroom/Releases/Release/Article/2328894/dod-releases-list-of-additional-companies-in-accordance-with-section-1237-of-fy/; and Lesley Wroughton, “World Bank Bars Seven Firms Including Four From China,” Reuters, January 14, 2009, https://www.reuters.com/article/oukwd-uk-worldbank-corruption-idAFTRE50E0GX20090115.

145 Gergely Salát and Henrietta Hegyi, “Chinese Soft Power in Action.”

146 Horváth, “Fudan Hungary University”; Kerényi György, “Magyarországra települő kínai egyetem: hoznak vagy visznek?,” Radio Free Europe, September 24, 2020, https://www.szabadeuropa.hu/a/magyarorsz%C3%A1gra-telep%C3%BCl%C5%91-k%C3%ADnai-egyetem-hoznak-vagy-visznek-fundan-budapest-campus/30856101.html.

147 Urfi, “Öt-hatezer mesterszakos hallgatót akar felvenni Magyarországon a kínai Fudan Egyetem.”

148 Reuters, “Hungary’s Orban Extends Dominance Through University Reform,” CNN, April 27, 2021, https://www.cnn.com/2021/04/27/europe/hungary-orban-university-reform-intl/index.html.

149 Reid Standish and Akos Keller-Alant, “New Chinese University in Budapest Puts Orban’s Beijing Ties in the Spotlight,” Radio Free Europe/Radio Liberty, May 3, 2021, www.rferl.org/a/fudan-university-hungary-orban-china-ties/31236149.html.

150 “Free Hong Kong Road: Budapest Renames Streets to Frustrate Chinese Campus Plan,” Guardian, June 3, 2010, http://www.theguardian.com/world/2021/jun/03/free-hong-kong-road-budapest-renames-streets-to-frustrate-chinese-campus-plan.

151 Veronica Gulyas, “Hungarians Target Orban on China in First Post-Lockdown Protest,” Bloomberg, June 5, 2021, https://www.bloomberg.com/news/articles/2021-06-05/thousands-protest-in-budapest-against-chinese-university-campus.

152 Matura, “Ki szereti Kínát?”

153 “MP of Hungary’s Strongest Opposition Party Has Ties to the Government’s Controversial Trading House Business,” Direkt36, September 13, 2019, https://www.direkt36.hu/en/a-dk-tamadta-a-kormany-kereskedohazait-egy-kepviselojuk-megis-tobb-szalon-kotodik-az-uzlethez/.

154 Robin Emmott, “EU, China Impose Tit-for-Tat Sanctions Over Xinjiang Abuses,” Reuters, March 22, 2021, https://www.reuters.com/article/us-eu-china-sanctions-idUSKBN2BE1AI.

155 “EU Sanctions Against Chinese Individuals, Entity Pointless, Harmful: Hungarian FM,” China.org.cn, March 23, 2021, http://www.china.org.cn/world/2021-03/23/content_77337572.htm.

156 Keegan Elmer, “Budapest Stands With Beijing in Opposing Taiwan’s Membership in the World Health Organization,” South China Morning Post, May 15, 2020, https://www.scmp.com/news/china/diplomacy/article/3084588/budapest-stands-beijing-opposing-taiwans-membership-world.

157 John Chalmers and Robin Emmott, “Hungary Blocks EU Statement Criticising China Over Hong Kong, Diplomats Say,” Reuters, April 16, 2021, https://www.reuters.com/world/asia-pacific/hungary-blocks-eu-statement-criticising-china-over-hong-kong-diplomats-say-2021-04-16/.

158 Dan Tomozei, “China şi România în august 1968: “Rezistaţi, dacă aveţi nevoie, vă dăm şi tunuri.” (China and Romania in 1968: “Resist, if you need, we will provide you guns too”]), available at: https://dantomozei.ro/2017/08/29/china-si- romania-in-august-1968-rezistati-daca-aveti-nevoie-va-dam-si-tunuri/.

159 Jiang Yu, “Friendship That Is a Shared Treasure,” China Daily, last modified October 29, 2019, http://www.chinadaily.com.cn/global/2019-10/29/content_37519051.htm.

160 Ibid. See also Jiang Yu, “Join Hands to Win,” China Daily, May 8, 2020, https://www.chinadaily.com.cn/a/202005/08/WS5eb49d4ea310a8b241154143.html.

161 Sarmiza Pencea and Ana-Cristina Balgar, “Romania-China Relations: Brief Inventory and Outlook,” Institute for World Economy, Romanian Academy, September 2020.

162 Interview conducted on March 30, 2021.

163 Under then prime minister Alexis Tsipras (of the Syriza party), Greece became the seventeenth member in 2019.

164 Liliana Popescu and Andreea Brinza, “Romania-China Relations. Political and Economic Challenges in the BRI Era,” Romanian Journal of European Affairs 18, no. 2 (December 2018).

165 Iulia Monica Oehler-Șincai, “16+1, a New Issue in China-EU Relations?,” China-CEE Institute, June 22, 2018, pp. 1-11, htts://china-cee.eu/wp-content/uploads/2018/07/Iulia-Monica-Oehler-S%CC%A6incai.pdf.

166 Pencea and Balgar, “Romania-China Relations.” See also, Sarmiza Pencea and Iulia Monica Oehler-Şincai, “Main Trends of Trade Flows Between Romania and China in the Last Decade,” Romanian Economic and Business Review 7, no. 3 (2012), http://www.rebe.rau.ro/RePEc/rau/journl/FA12/REBE-FA12-A6.pdf.

167 Interview conducted on March 30, 2021.

168 Alexandra Ioan, “Romania Is a Strong U.S. Ally Either Way, but Its Democracy Would Benefit From a Biden Win,” German Marshall Fund, October 23, 2020, https://www.gmfus.org/blog/2020/10/23/romania-strong-us-ally-either-way-its-democracy-would-benefit-biden-win.

169 “Angajamentul privind creșterea cheltuielilor pentru apărare,” Romanian Permanent Delegation to the UN, December 2019, https://nato.mae.ro/node/1012.

170 “Joint Statement by President Trump and President Klaus Iohannis of Romania,” U.S. Government Publishing Office, August 20, 2019, https://www.govinfo.gov/content/pkg/DCPD-201900557/pdf/DCPD-201900557.pdf.

171 Matei Rosca, “Romania Reveals the Limits of China’s Reach in Europe,” Politico, March 3, 2021, https://www.politico.eu/article/romania-recoils-from-china-aggressive-diplomacy/.

172 In previous meetings, China was represented by Premier Li Keqiang.

173 According to Popescu and Brinza (2018), citing the MOFCOM data, China was Romania’s eighth-largest trading partner in 2017, while Romania had become China’s sixty-eighth-largest trading partner.

174 “Republica Populară Chineză,” Romanian Ministry of Foreign Affairs, March 2021, accessed April 20, 2021, https://www.mae.ro/bilateral-relations/3121.

175 Paola Arosio and Danilo Masoni, “ChemChina to Buy Into Italian Tire Maker Pirelli in $7.7 Billion Deal,” Reuters, March 23, 2015, https://www.reuters.com/article/us-pirelli-chemchina-idUSKBN0MI0PQ20150323.

176 Popescu and Brinza, “Romania-China Relations.”

177 “EU Foreign Investment Screening Mechanism Becomes Fully Operational,” European Commission, October 9, 2020, https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1867.

178 Philippe Le Corre, “Europe’s Tightrope Diplomacy on China,” Carnegie Endowment for International Peace, March 24, 2021, https://carnegieendowment.org/2021/03/24/europe-s-tightrope-diplomacy-on-china-pub-84159.

179 “Legislative Train Schedule: A Europe Fit for the Digital Age,” European Parliament, June 24, 2021, https://www.europarl.europa.eu/legislative-train/theme-a-europe-fit-for-the-digital-age/file-public-procurement.

180 “Facing the Challenges of Globalisation,” European Commission, https://ec.europa.eu/competition/international/overview/foreign_subsidies.html.

181 Bogdan Neagu, “Romania Issues ‘Memorandum’ Blocking Chinese Firms From Public Infrastructure Projects,” Euractiv, February 2, 2021, https://www.euractiv.com/section/economy-jobs/news/romania-issues-memorandum-blocking-chinese-firms-from-public-infrastructure-projects/.

182 Elena Denisa Petrescu and Yannis Karamitsios, “Corruption in Romania: A European Affair,” Euractiv, September 30, 2019, https://www.euractiv.com/section/justice-home-affairs/opinion/corruption-in-romania-a-european-affair/.

183 Matei Rosca, “Romania Reveals the Limits of China’s Reach in Europe,” Politico, March 3, 2021 https://www.politico.eu/article/romania-recoils-from-china-aggressive-diplomacy/.

184 Popescu and Brinza, “Romania-China Relations.”

185 Madalin Necsutu, “Romania Cancels Deal With China to Build Nuclear Reactors,” Balkan Insight, May 27, 2020, https://balkaninsight.com/2020/05/27/romania-cancels-deal-with-china-to-build-nuclear-reactors/.

186 “Substantiation Study: Tarnița–Lăpuștești Pumped-Storage Hydropower Plant,” National Commission for Strategy and Prognosis, 2019, https://www.cnp.ro/user/repository/Investitii_strategice_in_parteneriat_public_privat/Substantuation_Study_Tarni_a_Lapu_te_ti_Hydropower.pdf.

187 Adrian Stoica, “Romanian Government Announces Investments of EUR 12.48bn in the Energy Sector,” Energy Industry Review, July 7, 2020, https://energyindustryreview.com/analysis/romanian-government-announces-investments-of-eur-12-48bn-in-the-energy-sector/.

188 The author is indebted to Andreea Brînză’s comments on this section. See also https://www.china-cee-investment.org/.

189 Marcel Gascón Barberá, “Romanian Conditions for 5G Race Would Rule out Huawei,” Balkan Insight, August 5, 2020, https://balkaninsight.com/2020/08/05/romanian-conditions-for-5g-race-would-rule-out-huawei/.

190 “Romania Approves Law to Potentially Exclude Huawei From Future 5G Network,” Euronews, April 16, 2021, https://www.euronews.com/2021/04/16/romania-approves-law-to-potentially-exclude-huawei-from-future-5g-network.

191 “旅居罗马尼亚华人约有一万 当地姑娘爱嫁中国男人,” Xinhua, December 1, 2004, https://web.archive.org/web/20081024122515/http://news.xinhuanet.com/overseas/2004-12/01/content_2279951.htm.

192 Interview conducted on March 30, 2021.

193 Ibid.

194 Interview conducted on April 19, 2021.

195 “The Summit of State Leaders of China and Central and East European Countries. The Pragmatic China-Romania Cooperation,” Economistul, February 26, 2021, https://www.economistul.ro/featured/summitul-de-lideri-de-stat-din-china-si-tarile-din-europa-centrala-si-de-est-cooperarea-pragmatica-china-romania-23716/.

196 “Romanian-Chinese House Leadership,” Romanian-Chinese House Friendship Association, https://casaromanochineza.ro/en/about-rch/rch-leadership/.

197 “Asociația de Prietenie România-China a organizat un seminar despre relațiile România-China,” China’s Embassy in Romania, November 2, 2020, http://www.chinaembassy.org.ro/rom/zlgxnew/t1830453.html.

198 The four Confucius Institutes are located in: University of Bucharest; University Lucian Blaga in Sibiu; University of Transylvania in Brasov; and Babeş-Bolyai University in Cluj-Napoca.

199 “Republica Populară Chineză,” Romanian Ministry of Foreign Affairs.

200 “Erasmus+: International Higher Education and Romania,” European Commission, January 2020, https://ec.europa.eu/assets/eac/erasmus-plus/factsheets/programme-countries/romania_erasmusplus_international_2019.pdf.

201 “Florin Cîțu: Vom încerca să producem vaccinul anti-Covid în România,” Digit 24, February 6, 2021, https://www.digi24.ro/stiri/actualitate/social/florin-citu-vom-incerca-sa-producem-vaccinul-anti-covid-in-romania-1447349.

202 Trump political appointee Adrian Zuckerman left Romania in January 2021. Before a new ambassador is confirmed by the U.S. Senate, a chargé d’affaires will head the Bucharest embassy.

203 He Zhigao, “The Return of US to Central and Eastern Europe and Its Impact,” China Institute for International Studies, March 2020, http://www.ciis.org.cn/gjwtyj/qkml/2020n/202007/t20200714_1768.html.

204 Ibid.

205 Le Corre, “Europe’s Tightrope Diplomacy on China.”

206 See https://3seas.eu/.

207 Marius Ghincea, Clara Volintiru, and Ivan Nikolovski, “Who Summons the Dragon? China’s Demand-Driven Influence in Central-Eastern Europe and the Western Balkans,” Global Focus, April 17, 2021, https://www.global-focus.eu/2021/04/who-summons-the-dragon-chinas-demand-driven-influence-in-central-eastern-europe-and-the-western-balkans/.

208 Iulia Monica Oehler-Șincai, “Romania: China’s Actions Amid Covid-19 Generate Contradictory Opinions,” in “Covid-19 and Europe-China Relations: A Country-Level Analysis,” edited by John Seaman, French Institute of International Relations, April 29, 2020, pp. 57–58, https://www.ifri.org/sites/default/files/atoms/files/etnc_special_report_covid-19_china_europe_2020.pdf.

209 “Public Opinion Survey Residents of Georgia,” Center for Insights in Survey Research, June-July 2020, https://www.iri.org/sites/default/files/iri_poll_presentation-georgia_june_2020_general-aug_4_corrections_1.pdf.

210 “United States – Georgia Memorandum of Understanding on 5G Security,” U.S. Embassy in Georgia, January 14, 2021, https://ge.usembassy.gov/united-states-georgia-memorandum-of-understanding-on-5g-security/.

211 Revaz Topuria, "Georgia: The Key to China's 'Belt and Road'", Diplomático,28 de abril de 2016, https://thediplomat.com/2016/04/georgia-the-key-to-chinas-belt-and-road/.

212 "Georgia y China: 'Llevarse pequeñas piedras para mover grandes montañas'", Centro de Investigación de Política Económica, enero de 2017, https://eprc.ge/uploads_script/publication/China_A5_WEB2.pdf.

213 Michael Fredholm (ed.), The Shanghai Cooperation Organization and Eurasian Geopolitics: New Directions, Perspectives, and Challenges (Copenhague: Instituto Nórdico de Estudios Asiáticos, 2013), https://www.diva-portal.org/smash/get/diva2:876570/FULLTEXT01.pdf.

214 "El Ministro de Relaciones Exteriores de China visita Tbilisi, promete apoyo a Georgia", Civil Georgia, 24 de mayo de 2019, https://civil.ge/archives/306578#:~:text=Chinese%20Foreign%20Minister%20Wang%20Yi,country's%20sovereignty%20and%20territorial%20integrity.

215 Emil Avdaliani, "A Chill in Georgia-China Relations", Center for European Policy Analysis, 21 de octubre de 2020, https://cepa.org/a-chill-in-georgia-china-relations/.

216 "Moscú gravemente preocupado por el bio-laboratorio estadounidense desplegado cerca de la frontera rusa", China Daily,12 de junio de 2015; "China y Rusia se unen para condenar los laboratorios estadounidenses 'peligrosos' en los antiguos estados soviéticos", Newsweek,29 de abril de 2020; "Ex-Soviet Bioweapons Labs in Georgia, Armenia, and Elsewhere Now Fighting the Coronavirus Targeted by a Russian Disinformation Campaign Over U.S. Support", Foreign Policy,25 de junio de 2020.

217 "MARWCHI: ¿Aprobar a las mujeres que estropean el chino?", Centro de Recursos de Investigación del Cáucaso, 2010, https://caucasusbarometer.org/en/cb2010/MARWCHI/.

218 Jiayi Zhou, "Chino en Georgia (documento de trabajo)", Centro Europeo para Asuntos de las Minorías, enero de 2021, https://www.ecmi.de/publications/ecmi-research-papers/54-chinese-in-georgia.

219 Niva Yau, "En la región del Caspio, China apenas está comenzando", Centro Carnegie de Moscú, 27 de febrero de 2021, https://carnegie.ru/commentary/83950#:~:text=As%20a%20result%2C%20only%20a,live%20and%20work%20in%20Georgia.

220 Ver datos para 2019 en el sitio web de la Administración Nacional de Turismo de Georgia, https://gnta.ge/statistics/.

221 Ariel Cohen, "U.S. Policy in the Caucasus and Central Asia: Building a New 'Silk Road' to Economic Prosperity", Heritage Foundation, 24 de julio de 1997, https://www.heritage.org/europe/report/us-policy-the-caucasus-and-central-asia-building-newsilk-road-economic-prosperity.

222 “Jin Liqun Selected President-Designate of the Asian Infrastructure Investment Bank,” Asian Infrastructure Investment Bank, August 24, 2015, https://www.aiib.org/en/news-events/news/2015/Jin-Liqun-Selected-President-designate-of-the-Asian-Infrastructure-Investment-Bank.html.

223 “Tbilisi Hosts First Silk Road Forum,” Agenda.GE, October 15, 2015, https://agenda.ge/en/news/2015/2289.

224 “Georgia Holds Belt & Road Forum to Explore Opportunities,” Xinhua, November 29, 2017, http://www.xinhuanet.com/english/2017-11/29/c_136787597.htm.

225 From the text of a speech given by David Usupashvili on October 14, 2015, titled “Asian Political Parties’ Special Conference on the Silk Road,” seen by author. A news report of the meeting is here, http://newsday.ge/new/index.php/en/component/k2/item/8776-david-usupashvili-participated-in-the-discussion-held-within-the-silk-road-conference-of-asian-political-parties.

226 “Turkey’s Multilateral Transportation Policy,” Ministry of Foreign Affairs Republic of Turkey, https://www.mfa.gov.tr/turkey_s-multilateral-transportation-policy.en.mfa.

227 “Trans-Caspian International Transport Route,” Middle Corridor, https://middlecorridor.com/en.

228 “Report on Phase III of the Euro-Asian Transport Links Project,” United Nations Economic Commission for Europe, February 5, 2018, https://unece.org/DAM/trans/doc/2018/itc/Informal_document_No_8_EATL_3rd-phase_report.pdf.

229 “Improving Freight Transit and Logistics Performance of the Trans Caucasus Transit Corridor: Strategy and Action Plan,” World Bank Group, https://openknowledge.worldbank.org/bitstream/handle/10986/33554/Improving-Freight-Transit-and-Logistics-Performance-of-the-Trans-Caucasus-Transit-Corridor-Strategy-and-Action-Plan.pdf?sequence=1&isAllowed=y.

230 Feride Inan and Diana Yayloyan, “New Economic Corridors in the South Caucasus and the Chinese One Belt One Road,” Economic Policy Research Foundation of Turkey, https://armenia-turkey.net/files/2020-04/oTvkVwhb0Z2ysfXTVQniYEDv1I.pdf.

231 Revaz Topuria, “Georgia: The Key to China’s ‘Belt and Road,’” Diplomat, April 28, 2016, https://thediplomat.com/2016/04/georgia-the-key-to-chinas-belt-and-road/.

232 Nicola P. Contessi and Maesea McCalpin, “Is Covid-19 Shifting the Future of Eurasian Rail?,” Reconnecting Asia, Center for Strategic and International Studies, April 26, 2021, https://reconasia.csis.org/is-covid-19-shifting-the-future-of-eurasian-rail/.

233 “First Direct Block Train to Arrive From China in Georgia,” Inter Press News, February 19, 2021, https://www.interpressnews.ge/en/article/111881-first-direct-blocktrain-to-arrive-from-china-in-georgia.

234 “First Silk Road Train From Turkey to China,” Rail Cargo Group, https://www.railcargo.com/en/news/first-silk-road-train-from-turkey-to-china.

235 Jacob Mardell, "On the 'Middle Corridor', China Is Largely Absent", Berlin Policy Journal,15 de octubre de 2019, https://berlinpolicyjournal.com/on-the-middle-corridor-china-is-largely-absent/.

236 "Puerto de Anaklia", Consorcio de Desarrollo de Anaklia, http://anakliadevelopment.com/.

237 Maximilian Hess y Maia Otarashvili, "Georgia's Doomed Deep-Sea Port Ambitions: Geopolitics of the Cancelled Anaklia Project", Foreign Policy Research Institute, 2 de octubre de 2020, https://www.fpri.org/article/2020/10/georgias-doomed-deep-sea-port-ambitions-geopolitics-of-the-cancelled-anaklia-project/.

238 Bradley Jardine, "With Port Project, Georgia Seeks Place on China's Belt and Road", Eurasianet, 21 de febrero de 2018, https://eurasianet.org/with-port-project-georgia-seeks-place-on-chinas-belt-and-road.

239 "The US Secretary of State's Messages to Georgia – Reactions", JAM News, 13 de junio de 2019, https://jam-news.net/us-secretary-of-state-to-the-georgian-authorities/.

240 "Agenda oculta: Estados Unidos hunde miles de millones en la construcción de un importante puerto marítimo en Georgia", Sputnik News, 5 de octubre de 2016, https://sputniknews.com/europe/201610051046017520-georgia-us-port/; y "A Sea Change?: China's Role in the Black Sea", Frontier Europe Initiative, noviembre de 2020, https://mei.edu/sites/default/files/2020-11/A%20Sea%20Change%3F-China%27s%20Role%20in%20the%20Black%20Sea.pdf.

241 Tinatin Khidasheli, "Georgia's China Dream: CEFC's Last Stand in the Caucasus", Sinopsis, 3 de diciembre de 2018, https://sinopsis.cz/en/georgias-china-dream-cefcs-last-stand-in-the-caucasus/.

242 "Davit Ebralidze ha sido nombrado nuevo director de Poti FIZ", Commersant, 23 de julio de 2018, https://commersant.ge/ge/post/fotis-tiz-s-axali-direqtorad-davit-ebralidze-danishna.

243 "Memorando de Entendimiento entre GCFA y CEFC", Asociación de Amistad Georgiano-China, noviembre de 2016, http://gcfa.ge/news/5b1e803d09bb1e693eebec21.

244 "Fallen Energy Conglomerate CEFC Declared Bankrupt", Caixin Global, 25 de abril de 2020, https://www.caixinglobal.com/2020-04-25/fallen-energy-conglomerate-cefc-declared-bankrupt-101547143.html.

245 "¿Ha revelado el gobierno georgiano sus verdaderas intenciones con respecto al puerto de Anaklia?", Anaklia Development Consortium, 27 de octubre de 2020, http://anakliadevelopment.com/news/has-the-georgian-government-revealed-its-true-intentions-regarding-anaklia-port/.

246 "Developments Around Georgian Ports: What Is New?", Transparency International Georgia, 22 de abril de 2021, https://transparency.ge/en/blog/developments-around-georgian-ports-what-new.

247 Documentos de propiedad relacionados con el Poti FIZ visto por el autor.

248 APM Terminals, see https://www.apmterminals.com/en/poti/our-port/our-port.

249 Khidasheli, “Georgia’s China Dream.”

250 “External Merchandise Trade in Georgia 2020,” Geostat, January 29, 2021, https://www.geostat.ge/media/35820/External-Merchandise-Trade-of-Georgia-in-2020.pdf.

251 “A Sea Change?: China’s Role in the Black Sea,” Frontier Europe Initiative, November 2020, https://mei.edu/sites/default/files/2020-11/A%20Sea%20Change%3F-China%27s%20Role%20in%20the%20Black%20Sea.pdf.

252 “Mobile Vendor Market Share Georgia,” Statcounter, June 2020-July 2021, https://gs.statcounter.com/vendor-market-share/mobile/georgia.

253 For prices of Xiaomi devices in Georgia, see https://xiaomi.com.ge/product-category/redmi-phones/.

254 “External Merchandise Trade in Georgia 2020,” Geostat, January 29, 2021, https://www.geostat.ge/media/35820/External-Merchandise-Trade-of-Georgia-in-2020.pdf.

255 Natia Taktakishvili, “Georgia’s Exports to China Doubled in 2021,” Business Media Georgia, January 21, 2021, https://bm.ge/en/article/georgias-exports-to-china-doubled-in-2021-/73890.

256 Ibid.

257 “Thermal Power Plant Opens in Gardabani, South-East Georgia,” Agenda.ge, January 17, 2020, https://agenda.ge/en/news/2020/151.

258 Stefan Wagstyl, “Chinese Group Buys Georgian Bank,” Financial Times, June 11, 2012, https://www.ft.com/content/105c5299-7a1a-39b8-9861-1095ac24d8bd.

259 Wade Shepard, "Silk Road Impact: Chinese Company Turns Old Soviet Factory in Kutaisi Into Free Industrial Zone", Forbes,30 de junio de 2016, https://www.forbes.com/sites/wadeshepard/2016/06/30/how-chinas-hualing-group-revived-an-old-soviet-factory-to-help-restore-an-ailing-economy-in-kutaisi-georgia/?sh=6f860ef21c80.

260 Franziska Smolnik, "Georgia se posiciona en la nueva ruta de la seda de China: relaciones entre Tbilisi y Beijing a la luz de la Iniciativa de la Franja y la Ruta", Stiftung Wissenschaft und Politik, marzo de 2018, https://www.swp-berlin.org/fileadmin/contents/products/comments/2018C13_smk.pdf.

261 "Hualing Tbilisi Sea New City", Hauling Group, http://hualing.ge/language/en/tbilisi-sea-new-city-2/.

262 Giorgi Lomsadze, "Undeterred by Slow Start, Georgia Woos Chinese Investors", Eurasianet, 3 de octubre de 2019, https://eurasianet.org/undeterred-by-slow-start-georgia-woos-chinese-investors.

263 Dominik Istrate, "Asian Development Bank Allocates 415 Million US Dollars for Georgian Road Corridor", Emerging Europe, 5 de agosto de 2019, https://emerging-europe.com/news/asian-development-bank-allocates-415-million-us-dollars-for-georgian-road-corridor/.

264 Ministerio de Comercio de la República Popular China, 3 de agosto de 2011, http://ge.mofcom.gov.cn/article/jmxw/201108/20110807678012.shtml.

265 Tamta Jijavadze, "Georgia en Polonia y Polonia en Georgia", Forbes,1 de diciembre de 2020, https://forbes.ge/saqarthvelo-polonethshi-da-polonethi-saqarthveloshi/.

266 "Nadie puede competir con las empresas estatales chinas-Paata Trapaidze", Business Media Georgia, 11 de diciembre de 2020, https://bm.ge/en/article/no-one-can-compete-with-chinese-state-owned-companies--paata-trapaidze/70961.

267 Luka Pertaia, "Bienvenido al 'infierno': trabajando en un sitio de construcción de ferrocarriles georgianos", OC Media, 26 de febrero de 2018, https://oc-media.org/features/welcome-to-hell-working-on-a-georgian-railway-construction-site/.

268 "Un mundo seguro para el partido: la influencia autoritaria de China y la respuesta democrática: estudios de casos de países de Nepal, Kenia, Montenegro, Panamá, Georgia y Grecia", Instituto Republicano Internacional, 2021, https://www.iri.org/sites/default/files/bridge-ii_fullreport-r7-021221.pdf; y "Problema de las puertas giratorias en Georgia: deficiencias de la legislación y la aplicación", Transparencia Internacional Georgia, 15 de julio de 2019, https://transparency.ge/en/blog/revolving-door-problem-georgia-shortcomings-legislation-and-enforcement/?custom_searched_keyword=sinohydro.

269 "Comunicado de prensa: El Grupo del Banco Mundial inhabilita a China Railway Construction Corporation Ltd. y dos subsidiarias", Banco Mundial, 5 de junio de 2019, https://www.worldbank.org/en/news/press-release/2019/06/05/world-bank-group-debars-china-railway-construction-corporation-ltd-and-two-subsidiaries.

270 “On the 94th Anniversary of the Founding of the People’s Liberation Army,” Embassy of the People’s Republic of China in Georgia, http://ge.china-embassy.org/eng/.

271 Medea Ivaniadze, “China’s Activities in the South Caucasus Issue 1,” Rondeli Foundation, June 29-July 26, 2020, https://www.gfsis.org/ge/publications/view/2877.

272 “Chinese Government Scholarships” (in Georgian), on Georgia’s Education Ministry website, January 14, 2016, http://www.mes.gov.ge/content.php?id=6155&lang=geo.

273 Rayhan Demytrie, “Coronavirus: How ‘Three Musketeers’ Helped Georgia Fight Virus,” BBC, July 6, 2020, https://www.bbc.co.uk/news/world-europe-53269000.

274 “China Aids Georgia With a Batch of Anti-epidemic Supplies,” Xinhua, July 17, 2020, http://www.xinhuanet.com/photo/2020-07/17/c_1126248383.htm.

275 “Imnadze: We Could Have Had the Chinese Vaccine a Long Time Ago, but If It Was Not Done, What Do We Want?” (in Georgian), Tabula, February 1, 2021, https://tabula.ge/ge/news/661467-imnadze-shegvedzlo-chinuri-vaktsina-didi-khnis.

276 “Georgia Receives Million Doses of Sinopharm, Sinovac Vaccines,” Civil.ge, July 2, 2021, https://civil.ge/archives/430385.

277 “U.S. Donates Half Mln COVID Vaccines to Georgia,” Civil.ge, July 24, 2021, https://civil.ge/archives/433790.

278 National Center for Disease Control & Public Health, Georgia (NCDC & PH), “Amiran Gamkrelidze, Director General of the National Center for Disease Control and Public Health, Was Vaccinated With the Vaccine of ‘Sinopharmi’ 04.05.2021,” Facebook, May 4, 2021, https://www.facebook.com/ncdcgeorgia/posts/3962365950517972.

279 Giorgi Lomsadze, “Awaiting the COVID Vaccine, Georgians Are Split Between Skeptical and Eager,” Eurasianet, February 3, 2021, https://eurasianet.org/awaiting-the-covid-vaccine-georgians-are-split-between-skeptical-and-eager.

280 "¿Es Georgia un Estado capturado?", Transparencia Internacional Georgia, 11 de diciembre de 2020, https://transparency.ge/en/blog/georgia-captured-state/?custom_searched_keyword=captured; y Dan Alexander, "Meet the 10 Billionaire Tycoons Who Rule Their Countries' Economies", Forbes,14 de marzo de 2014, https://www.forbes.com/sites/danalexander/2014/03/14/meet-the-10-billionaire-tycoons-who-rule-their-countries-economies/?sh=118f81705f08.

281 "Encuesta de opinión pública: residentes de Georgia", Center for Insights in Survey Research, Instituto Republicano Internacional, febrero de 2021, https://www.iri.org/sites/default/files/iri_poll_presentation-georgia_february_2021_1.pdf.

282 "Declaración conjunta sobre la situación de los derechos humanos en Xinjiang", Misión de los Estados Unidos ante la Organización Internacional ginebra, 22 de junio de 2021, https://geneva.usmission.gov/2021/06/22/joint-statement-on-the-human-rights-situation-in-xinjiang/.

283 Ibídem.


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PREFACIO: EL IMPACTO DE CHINA EN LAS REGIONES ESTRATÉGICAS

Erik Brattberg y Evan A. Feigenbaum

La huella económica y política de China se ha expandido tan rápidamente que muchos países, incluso aquellos con instituciones estatales y de la sociedad civil relativamente fuertes, han luchado por lidiar con las implicaciones. Ha habido una creciente atención a este tema en los Estados Unidos y las democracias industriales avanzadas de Japón y Europa Occidental. Pero los países "vulnerables", aquellos donde la brecha es mayor entre el alcance y la intensidad del activismo chino, por un lado, y, por el otro, la capacidad local para gestionar y mitigar los riesgos políticos y económicos, enfrentan desafíos especiales. En estos países, las herramientas y tácticas del activismo y las actividades de influencia de China siguen siendo poco conocidas entre los expertos locales y las élites. Mientras tanto, tanto dentro como fuera de estos países, la política transpone con demasiada frecuencia las soluciones occidentales y no está bien adaptada a las realidades locales.

Esto es especialmente notable en dos regiones estratégicas: Europa Sudoriental, Central y Oriental; y Asia meridional. El perfil económico y político de China se ha expandido inusualmente rápido en estas dos regiones, pero muchos países carecen de un banco profundo de expertos locales que puedan hacer coincidir el análisis de las implicaciones internas del activismo chino con las recomendaciones de políticas que reflejen la verdad política y económica interna.

Para abordar esta brecha, la Fundación Carnegie inició un proyecto global para comprender mejor las actividades chinas en ocho países "pivotes" en estas dos regiones estratégicas.

El primer objetivo del proyecto fue mejorar la conciencia local sobre el alcance y la naturaleza del activismo chino en estados con (1) instituciones estatales débiles, (2) sociedades civiles frágiles o (3) países donde la "captura de élite" es una característica del panorama político.

En segundo lugar, el proyecto tenía por objeto fortalecer la capacidad facilitando el intercambio de experiencias y mejores prácticas a través de las fronteras nacionales.

En tercer lugar, el proyecto buscaba desarrollar prescripciones de políticas para los gobiernos de estos países, así como para los Estados Unidos y sus socios estratégicos, para mitigar y responder a actividades que no atentan a la independencia política o al crecimiento económico y el desarrollo bien equilibrados.

To establish a comprehensive picture of China’s activities and their impact, this project dug deeply into Chinese activism in four case countries in each region—eight countries in total.

We began by holding workshops, so that influencers across countries could share experiences and compare notes. Invited participants included policymakers, experts, journalists, and others—all with deep local knowledge, steeped in their countries’ politics, economies, and civil societies. In Europe, the four countries were Georgia, Greece, Hungary, and Romania, and in South Asia, Bangladesh, Maldives, Nepal, and Sri Lanka. Cross-national discussions among these regional participants aimed to raise awareness, discuss the implications of China’s growing activism in their countries, and compare notes on the diverse ways in which these various countries had managed the rapid influx of Chinese capital, programs, people, technology, and other sources of influence.

After holding several workshops for each region, Carnegie scholars conducted extensive interviews and a comprehensive review of open-source data and literature on Chinese activities—including extensive media monitoring in local languages, from Bengali to Nepali, Georgian to Greek. These deep dives aimed to measure Chinese influence along three dimensions:

(1) Chinese activities that shape or constrain the choices and options for local political and economic elites;

(2) Chinese activities that influence or constrain the parameters of local media and public opinion; and

(3) China’s impact on local civil society and academia.

The first of these three dimensions is important because China’s sheer size means that it will inevitably play a role in these two strategic geographies. China is the world’s largest trader and manufacturer—and it sits on a significant pool of foreign exchange reserves and capital that countries in all three regions will invariably wish to tap. For this reason, these surveys aimed to identify, distinguish, and analyze only those specific activities that could constrict options, reduce the scope of choice, and reward a narrow interest group or elite.

The second of the three dimensions is crucial because China frequently couples its use of economic and political carrots and levers to broad-ranging public relations outreach. When China floods a country not just with investment but also with strategic messages designed to influence public opinion, there is often little space left for counter-narratives, especially in countries that lack independent media or have weak civil societies.

The third of the three dimensions is critical because in the most vulnerable countries of these two regions, civil society and academia are often too fragile to provide balanced coverage of the activism of external powers. In some cases, Chinese funding and so-called united front tactics have shaped domestic narratives.

Beijing, like other outside powers, cultivates friendly voices in nearly every country. But in some countries, there are few counterweights.

By exploring all three dimensions of Chinese influence simultaneously, Carnegie’s initiative has aimed to generate a clearer and well-balanced picture of Chinese activism and messaging in Europe and South Asia, while fostering a cross-national network of influencers who will continue to compare notes, learn across national boundaries, and spur a genuinely regional conversation about China’s rise and its far-reaching implications.

Erik Brattberg
Director, Europe Program and Fellow, Carnegie Endowment for International Peace

Evan A. Feigenbaum
Vice President for Studies, Carnegie Endowment for International Peace

SUMMARY

The Carnegie Endowment project “China’s Impact on Strategic Regions” comes at a time when states across several regions of the globe are experiencing China’s increased involvement in their polities, economies, and societies, and the consequences that such engagement brings with it. Over the last decade, China has developed a greater variety of interests and more connections than ever with countries, including in parts of Europe and South Asia. With these new channels of influence, it has developed expectations of exceptional consideration for its interests and is willing to exercise pressure in its pursuit for special treatment.

This paper builds on the research carried out through focus groups, extensive interviews, and detailed archival analysis and media mapping in four South Asian states—Bangladesh, Maldives, Nepal, and Sri Lanka—to learn from their rapidly evolving relationships with China, as well as explore the impact of Chinese influence cross-nationally and comparatively. All four countries have distinctive vulnerabilities. In some, state institutions are brittle. In others, civil society provides an inadequate check on the actions and powers of the state. Elsewhere, elites are prone to capture, including by external actors, such as China and its proxies. The study attempts to make sense of deepening Chinese activism by framing it in terms of the impact it has on the vulnerabilities in these states.

The paper aims to understand how China leverages specific vulnerabilities in these four states for its interests; how these vulnerabilities can be remedied; and how the states can share and learn from each other’s experiences to strengthen their individual and collective hand. Ultimately, the paper hopes to offer policy recommendations that aid the countries in discouraging unproductive Chinese actions and influences, while engendering the kind of engagement that is in their interest. The recommendations are also directed toward the United States and its strategic partners to help strengthen these states’ independence of action, bargaining power, and development.

CHINA’S GOALS

China’s main asset is its economic levers of influence, and Chinese actors are proactive in wielding these.

China is helping to construct mega infrastructure projects in every country in the region, in most cases with money that it has lent them. Its loans to Sri Lanka were at $4.6 billion in 2020, and the overall figure for Maldives is believed to be between $1.1 billion and $1.4 billion. These economic engagements serve Chinese strategic ends and help expand its influence in a region that has traditionally been considered India’s strategic backyard. Chinese actors are proactive in seeking opportunities, often approaching public or private stakeholders with suggestions for engagement, and timing project completion to coincide with upcoming elections. This earns them goodwill and increases the possibility of getting projects going.

China’s tools of influence are becoming much more diverse.

China’s tools of influence are varied and are wielded depending on the extent of its engagement in a country, on the robustness of that country’s institutions, and China’s personal relationships with key regime actors. These can be in the form of incentives or threats, used to deter or compel both state and nonstate actors in focus countries. Sometimes, coercive threats are used to lead local actors such as journalists to self-censor. At other times, blandishments and incentives such as buying advertisements, offering collaboration for a media outlet with the embassy, and so on are used to evoke compliance.

There is no “debt trap” in the four countries.

The commonly heard narrative of China practicing debt-trap diplomacy—a practice of offering easy money for unviable projects with the aim of gaining control of assets—does not hold in the four countries studied. Sri Lanka, most often cited as an example of debt-trap diplomacy, has an overall debt management problem. Studies in 2020 put Sri Lanka’s external debt to China at about 6 percent of gross domestic product (GDP). Other countries like Nepal and Bangladesh have been prudent in choosing their funders and methods of financing, often choosing traditional multilateral institutions or other bilateral lenders as partners.

Countries are learning from each other and changing how they exercise agency as a result.

In what is perhaps the most key finding from the project, stakeholders that were engaged highlighted their awareness about the negative consequences of Chinese engagement, as well as their willingness to avoid them. Correspondingly, state actors in the focus countries have exercised their agency in keeping their national interest in mind while dealing with China. This includes rejecting specific projects found to be untenable. Elsewhere, political parties have resisted giving in to China’s attempts at increasing engagement with them. In many instances, it is the governments in the states under study that have pulled China closer when they see clear benefits in cooperating—China can provide domestic political advantage ahead of elections, as well as deliver public works and other benefits to constituents.

China and its partners are still having teething trouble—for now.

China is a relatively new entrant to South Asia and is yet to clearly understand the institutions and organizational cultures of the focus countries. Likewise, the countries under study are still figuring out how Beijing thinks. These divergences account for the dissonance and diplomatic faux pas that are often visible. However, both sides are acutely aware of what they mean to each other, and keen to learn to work in the interest of the broader relationship.

India is still a more significant strategic player than China.

India continues to be the state with the most influence on the choices, interests, and conduct of the countries under study. Due to India’s historical, political, and social connections with these countries, there seem to be limits to how deeply entrenched China can become. However, the balance is gradually shifting toward China, for the role it can play as a developmental partner as well as a balancing factor against the regional power, India. Moreover, India’s close presence in their social, political, and economic lives also leaves it open to heightened levels of criticism, including allegations of meddling.

RECOMMENDATIONS FOR THE UNITED STATES AND ITS STRATEGIC PARTNERS

Consistency is the key to China’s regional engagement; it should be key to the United States’ as well.

Steady engagement from the United States and its partners is still very much desired by all four of these South Asian states. These expectations, and the China challenge, can be met with a consistent presence and a long-term policy for the region, as opposed to the current perception of piecemeal and fleeting engagement. The first Quad summit’s decision to focus on vaccines, emerging technologies, and climate—three areas where China has made a big play to support South Asia—is useful in this regard.

Chinese projects focus on what the four states are perceived to need—so should U.S. engagement.

Like China, the United States needs to marry its capabilities and proposals with the development priorities and domestic needs of the four South Asian states. Connectivity and infrastructure projects are at the top of the wish list for all South Asian states and have become a key area of cooperation with China. To increase their profile in the region, the United States and its partners must pay attention to what the countries are asking for. The Build Back Better World initiative announced at the June 2021 meeting of G7 leaders is a productive step in this direction. As countries in the region transition to middle-income status and become ineligible for much of concessional assistance, the United States could use its influence in Western multilateral organizations to help these states develop alternative avenues for development assistance.

De-hyphenate U.S. engagement in the region from the Chinese question.

It would be prudent to pitch American assistance on its own merits and intrinsic value. It should be delinked from a broader anti-China thrust, and it should not be held hostage to the focus countries tempering their relationships with China. As small countries, it is unlikely that Bangladesh, Maldives, Nepal, or Sri Lanka can afford to explicitly choose among relationships with bigger powers. Any sort of conditionality reduces the avenues for cooperation. Communicating a positive agenda, not just a negative one, will win greater favor among governments, businesses, and the public.

Acknowledge domestic drivers and build capacity to reduce space for China.

The focus countries find China’s approach of noninterference favorable. One way the United States can circumvent being seen as interfering when it brings its assistance to the table with governance conditionalities is to build domestic capacity and strengthen civil societies in these focus countries. All four states in this study have media outlets and civil society organizations that have been focusing on questions of good governance. The United States can identify and equip them with grants and training to enable them and their audiences to ask tough questions and ask for transparency. In doing this, the pressure on governments to do better comes from within rather than without.

INTRODUCTION

In May 2021, Li Jiming, the Chinese ambassador to Bangladesh, used a conversation with journalists to caution the country against joining the Quadrilateral Security Dialogue, or “Quad”—the informal grouping of Australia, India, Japan, and the United States that some in Beijing view as a prospective anti-China alliance. “Relations with China will be damaged if Bangladesh joins the Quad,” he warned.1 Foreign Minister A.K. Abdul Momen responded within a day, reminding China that Bangladesh was free to make its own foreign policy choices and to pursue alignments and relationships in its interest. He also confessed to some surprise that Beijing would wade into the internal choices of another country.2

Bangladesh should not have been so surprised. The reality is that China has been emboldened to assert its interests in South Asia more directly because of profound changes in its relationships with states in the region. Over the past decade, it has developed a greater variety of interests and more connections than ever. In parallel, China has developed more channels of influence as well as a greater expectation of deference to its interests and a greater willingness to exercise pressure in their pursuit.

Over the last decade, China has become far more attentive to its South Asian periphery, moving beyond commercial and development engagements to more far-reaching political and security ones.3 However, most analyses of these changing parameters of engagement have focused on the Chinese end of these relationships, and too often analytical attention is limited to examining specific infrastructure projects or investments under Beijing’s Belt and Road Initiative (BRI). This has left an incomplete picture of Chinese engagement because it misses the degree to which South Asian states are trying to manage and mitigate the impacts of Chinese influence that they view as inimical to their interests, even as they continue to develop political, military, and especially commercial ties with Chinese actors.

This paper is part of a multiregion Carnegie Endowment project, “China’s Impact on Strategic Regions.” It uses four cases—Bangladesh, Maldives, Nepal, and Sri Lanka—to examine not just the dynamic contours of China’s relationships with states in South Asia but also what can be learned from exploring Chinese influence cross-nationally and comparatively. The four countries have distinctive vulnerabilities. In some, state institutions are brittle. In some, civil society provides a weak check on the actions and powers of the state. In some, elites are prone to capture, including by external actors, such as China and its proxies.

The goals of this paper are threefold: to explore how China has leveraged specific vulnerabilities in these four South Asian states in pursuit of its interests; how these vulnerabilities can be plugged; and how sharing experiences among these four states could help them to strengthen their individual and collective hands, ensuring productive Chinese engagement in their interest while discouraging or mitigating the effects of unproductive Chinese actions and influences.

Ultimately, the paper aims to help strengthen local capacity through policy recommendations that could help these four countries mitigate and withstand the destabilizing elements of Chinese engagement while channeling Chinese energies in directions that support their interests. The study’s policy prescriptions are directed not only at each of the four countries but also to the United States and its strategic partners to help strengthen these states’ independence of action, bargaining power, and development.

ANALYZING THE SOUTH ASIAN SETTING

The four countries considered in this paper are not precisely alike. Neither are China’s relationships with them. For example, Maldives and Sri Lanka have been extremely receptive to Chinese loans for infrastructure projects. Bangladesh and Nepal, by contrast, have preferred alternative models to finance their development needs. In Bangladesh, China has emerged as the primary supplier of military hardware—a relationship that is not replicated in the three other countries. In Maldives, Nepal, and Sri Lanka, political actors with clear pro-China leanings have emerged, but not in Bangladesh. It is important, therefore, not to overgeneralize about the region. But, although the four countries are different, each is vulnerable in some way. And, above all, countries with such vast gaps in capacity invariably face challenges as they engage with China.

In this context, it is important to study the relationships of these countries with China individually or through a particular thematic lens such as infrastructure finance. However, examining the cases comparatively and comprehensively offers a more granular understanding. This paper, first, explores how each country measures on three axes of vulnerabilities—the comparative strength of state institutions, the robustness of civil society, and the dynamics of prospective elite capture. In examining state institutions, the study looks at how each state vets or monitors Chinese economic or political activities. Its analysis of civil society focuses especially on whether and to what extent the media and nongovernmental organizations (NGOs) identify and expose irregularities. It explores potential elite capture by tracking foreign penetration of and influences on each national elite.

Second, the study looks at the gaps in comparative analysis of the four countries.4 There are indications that each one’s main political, commercial, and social actors are aware of the increasing intensity and complexity of Chinese operations across the region, and that they are learning from some aspects of each other’s experiences. However, much of this learning takes place passively—watching closely what has happened in a neighboring country, drawing lessons, and trying to avoid making the same mistakes. As an adviser to the prime minister of Bangladesh notes, “we have learned from Sri Lanka’s [experiences with Chinese export investments], we have learned from [the same in] Djibouti.”5 More could be learned from a more active sharing of experiences by stakeholders in these countries. This second section of the paper provides them with suggestions for how to do so.

Third, the paper explains what is actually happening in China’s relationships with these countries across a spectrum of political, economic, military, educational, and social issues. This section of the study draws especially on the insights of a network of influencers and experts from each of the four countries, as well as extensive interviews, focus groups, and other forms of stakeholder engagement. Over the course of this one-year project, the Carnegie Endowment assembled this network whose members straddle major sectors, including the government, political parties, the diplomatic service, media, chambers of commerce, industrial interests, academia, think tanks, the civil service, and nongovernmental organizations. The aim was to gain a whole-of-society understanding of dynamic attitudes toward China in and across the countries. To the latter end, the Carnegie Endowment brought together some of these stakeholders from different countries, facilitating comparative discussion and a sharing of experiences and ideas.

Fourth, the paper compares what is happening in the four countries by triangulating insights from this network with primary and secondary research, media monitoring, and deep analytical dives into all aspects of their relationships with China.

For each of the four countries, the paper poses six questions:

  1. What is the underlying strategic logic and objectives that drive China’s activities?
  2. What vulnerabilities and weaknesses within each state has China been able to leverage, with what set of tools, and in what combination?
  3. How effective are the various Chinese influence activities, and what impact do they have on local institutions and on public and elite perceptions of China?
  4. What are the actual or prospective threats to the interests of the United States and its strategic partners?
  5. Has the coronavirus pandemic been an inflection point that either bolsters or weakens Chinese influence?
  6. How have the four countries managed and mitigated their vulnerabilities and what lessons can their neighbors learn from their distinctive experiences?

The Carnegie Endowment held closed-door workshops with domain experts from the focus countries between October and December 2020 and remained engaged with the network afterwards. The formal sessions were organized thematically and included some forty participants.

Between January and May 2021, the author undertook forty digital and phone interviews as well as primary research. This helped to triangulate data collected from the workshop discussions and to develop country analyses. This phase included a deep dive into open-source information from policy papers, academic research, private and public company websites, social media posts, official government documents, and statements in Bangladesh, India, Nepal, China, Sri Lanka, Maldives, and the United States. It also included archival research of news articles in the Bangla, Chinese, English, Nepali, Sinhala, and Tamil languages dating from 2013 to 2020. Together, these provide a more complete picture of China’s rising influence than can be gleaned only from English-language sources.

CHINESE ENGAGEMENT IN SOUTH ASIA: THE STORY SO FAR

In recent years, the most powerful sources of Chinese influence in the four South Asian countries surveyed have been commercial and financial.6 This is reflected in high-value project finance and operations partnerships, not least for the Hambantota and Colombo port projects in Sri Lanka and the Padma Multipurpose Bridge Project in Bangladesh. Without exception, the governments of the four countries have described China as a crucial development partner, either as a funder or in providing technological and logistical support.7 Additionally, it is the biggest trading partner in goods for Bangladesh and Sri Lanka, and the second-largest for Nepal and Maldives. Chinese investors have been the largest source of foreign direct investment (FDI) pledges to Nepal for six consecutive years till 2020–2021, with more than half of the country’s total FDI in the 2018–2019 fiscal year.8 However, the economic element is increasingly intertwined with political, government, and people-to-people aspects of these relationships.

Chinese tourists have become an important driver of growth for all four countries, with active encouragement from the authorities in China. For example, in 2019 before governments shut down international travel in response to COVID-19, the number of Chinese tourists in Nepal increased by over 11 percent year-on-year. They were no doubt encouraged by the Chinese ambassador who released a professionally shot set of photographs of herself visiting the country’s tourist attractions.9 On the other hand, in Maldives, leaders of the tourism industry believe that a lack of government backing in China stifled the flow of Chinese tourists to the country, which has been open to international travelers even amid the coronavirus pandemic since mid-2020.10

Educational partnerships have expanded too. Several Confucius Institutes have opened in Bangladesh in quick succession. In Nepal, multiple schools have made Chinese-language courses compulsory after the Chinese government offered to cover the salaries of the teachers involved.11 In Bangladesh, journalists have been awarded one-year, all-expenses-paid fellowships to Chinese institutions, and multiple newspapers have worked with the Chinese embassy to coordinate roundtables on the benefits of the BRI for the country.

The International Department of the Chinese Communist Party (CCP) has assiduously built alliances with political parties in the region. It has organized virtual seminars and workshops with members of the ruling parties in Nepal and Sri Lanka to discuss the relationship and avenues of cooperation between the parties.12 In Bangladesh, the ruling Awami League signed a memorandum of understanding (MoU) aimed at enhancing cooperation with the CCP in the presence of Prime Minister Sheikh Hasina, the party president.13

The CCP has also mobilized another of its arms in building influence in the region in recent years. Several ambassadorial appointees to South Asia have worked extensively in the United Front Work Department (UFWD) of the CCP, and not necessarily in the diplomatic corps. The UFWD operates to influence political, economic, and intellectual elites in other countries; in the current context, that involves forging a narrative that paints China as a key player in the global order and a partner for the future. Ambassador to Bangladesh Li Jiming and former envoy to Sri Lanka Cheng Xueyuan trace their careers back to the UFWD. Among others in the region, Nong Rong, ambassador to Pakistan is also known to have a background in the department.

The pandemic has created opportunities for China to work directly with the four countries in new ways—on the provision of medical equipment, biomedical expertise, and capital for coronavirus-related needs.14 China supplied testing kits, personal protection equipment, and medical supplies to the four countries in 2020. It extended a $500-million loan to Sri Lanka and sent a team of experts to Bangladesh to treat patients and train medical professionals. In 2021 it has supplied Sinopharm vaccines to the four countries.15 With the crisis exposing shortcomings in public healthcare capacities, it is likely that in a post-COVID-19 world, when South Asian countries talk about infrastructure, they will mean hospitals and laboratories as much as ports and highways. China will be eager to step in. Its technological and scientific collaborations, even if still inchoate, will offer options through the Health Silk Road.16 A build-out of telemedicine will require advanced 5G technologies, opening opportunities for Chinese companies, including its national telecoms champion, Huawei.

These developments demonstrate that China’s presence in South Asia is no longer predominantly economic but involves a greater, multidimensional effort to enhance its posture and further its long-term strategic interests in the region. But this increasing Chinese engagement and influence will likely exacerbate domestic divisions in all four states. It will create stakeholders in close relations with China, which has the potential to pit political and commercial elites against each other. In the case of countries with fragile institutions, underdeveloped civil society, or elites susceptible to capture, this may eventually weaken the state itself. For now, however, in most of the four states, China is still largely viewed as a partner that can assist with developmental needs—and it will not be easy for the United States to contest this. Multiple stakeholders from the region say that U.S. interest in and engagement with smaller South Asian countries is viewed locally as being sporadic at best. China, on the other hand, is perceived as a player with a plan. Moreover, despite questions about and criticism of its presence, Chinese actors have taken tangible steps to build confidence in their resolve and staying power.

BANGLADESH

The relationship between Bangladesh and China took a few years to warm up, with the two countries establishing diplomatic relations only in 1976. However, by the time Bangladesh signed on to the BRI during Chinese President Xi Jinping’s visit to Dhaka in 2016, economic, security, and geopolitical necessities had ensured all-round engagement between them. The largest number of infrastructure projects developed with Chinese help in South Asia are in Bangladesh. At the same time, the relationship embraces elements of a strong security partnership. According to a 2020 report by the Stockholm International Peace Research Institute, Bangladesh is China’s second-largest buyer of military hardware globally, accounting for almost one-fifth of the latter’s total exports between 2016 and 2020. Chinese arms make up over 70 percent of Bangladesh’s major arms purchases.17 Between 2009 and 2011, this included tanks, rescue vehicles, radars, ships, missiles, and defense systems, costing approximately $546 million.18 In 2016, Bangladesh procured two diesel electric submarines from China for $186 million.19

Bangladesh prefers to buy Chinese weapons as they are cheaper than those of established arms-exporting countries in the West or of Russia, and also because China extends soft loans to make these purchases.20 Security-related cooperation extends to the police force. In 2018, the two countries signed agreements on law-enforcement training assistance and providing arms and ammunition to the national police.21 Beyond the technical benefits that accrue to Bangladesh, this security relationship—which is unique in a region that India considers its direct sphere of influence—also points at Dhaka’s dexterity in balancing its relations with China and India.

This balancing act extends well beyond security. China has been an ideal partner for Bangladesh to expand its manufacturing base to cater to diverse export markets, including the Chinese one, and to overcome infrastructure gaps through project finance and construction. Economic engagement is primarily in trade, infrastructure, and business-to-business partnerships.

China is not among Bangladesh’s top ten export partners,22 but it aims to remedy this with policies and preferences to bolster the latter’s export prospects. For instance, China has allowed 97 percent of Bangladeshi goods duty-free access to its domestic market since June 2020.23 More important, it is helping the country to diversify its export base and move its industry up the value chain.24 Bangladeshi entrepreneurs can procure Chinese manufacturing machinery at minimal interest and with substantial grace periods.25 During Xi’s visit to Dhaka in 2016, the two countries signed twenty-seven agreements under which China would lend $24 billion to Bangladesh for projects including coastal disaster management and a road tunnel under the Karnaphuli River, as well as help to strengthen production capacity.26 China is also directly setting up manufacturing industries in Bangladesh, located in special economic zones (SEZs) such as the Chinese Economic and Industrial Zone-2 in Chittagong.27 Bangladeshi companies have expressed a preference for joint ventures with Chinese ones as, beyond attracting investment and financing jobs, this helps to facilitate the transfer of expertise and technology.28 According to Bangladeshi entrepreneurs, investment from China comes in clusters, as an initial investment generally leads to follow-on joint ventures, eventually establishing an entire ecosystem.29

The energy sector has been the greatest recipient of such investment, with Bangladeshi companies establishing joint ventures with Chinese counterparts. The 1,320-megawatt Payra coal-powered plant, the largest power plant in the country, which came online in 2020, is brought up most often as an example of the success of the model. It was developed by Bangladesh China Power Company, which was created as an equal-stakes joint venture between China National Machinery Import and Export Corporation and Bangladesh’s North-West Power Generation Company.30 Apart from electricity generation, the project is expected to develop significant transportation operations and infrastructure facilities on site, building railroads and bridges, as well as developing and increasing capacity of the Payra port. Additionally, under a maintenance agreement with the Chinese company, Bangladeshi workers will be trained and technology to run the plant will be transferred in the five years after the start of operation.31 Beyond energy, China’s role in Bangladesh’s cluster-based-industrialization approach is visible in joint ventures set up for various projects in Purbachal, the country’s first “smart” city, which is being developed in the outskirts of Dhaka, as well as for an industrial zone in Chittagong for manufacturing firms and associated industries.32

China has emerged as a key partner in constructing and funding several infrastructure projects in Bangladesh, such as the Padma Multipurpose Bridge project, several expressways, and power plants.33 As of January 2021, the government was implementing nine crucial development projects, such as the multilane road tunnel under the Karnaphuli River, with Chinese loans and credits worth $7.1 billion.34 In 2018, the Dhaka Stock Exchange enlisted the Shanghai and Shenzhen stock exchanges as strategic partners to spur the digital modernization of the trading system. The Chinese exchanges are expected to help set up platforms with information about listed companies, to offer tools to analyze performance, and to help increase network security and provide digital surveillance software.35

Reflecting a trend that has become an essential component of Chinese engagement across the region, the two countries regularly hold business matchmaking exercises through trade bodies such as the Bangladesh-China Chamber of Commerce and Industry. China also exhibits a degree of sophisticated coordination that extends beyond these usual measures. Chinese businesses, the embassy in Dhaka, and other Chinese stakeholders appear to move in concert when reaching out to their Bangladeshi counterparts to gauge areas for new business opportunities, which can then be followed by informational seminars and offers of capital, all to set the ball rolling on a rapid timeline of just a few months from exploratory contact to contract.36

Rising economic engagement has been accompanied by heightened political coordination. The CCP has been reaching out and holding meetings with the ruling Awami League and its principal opponent, the Bangladesh National Party (BNP), since at least 2015.37 BNP Chairperson Khaleda Zia visited China in 2016, meeting Xi who thanked the party for actively helping develop China-Bangladesh relations.38 Members of the two parties have also visited China at the invitation of the CCP.39 In 2019, the Awami League signed an MoU with the CCP to study ways in which the two parties could learn from each other and collaborate.40

Although these elite and institutional relationships have made rapid progress, Bangladesh’s citizens generally still view China as a blank slate. Beijing’s representatives have tried to change this by partnering with think tanks, business houses, and newspapers. In 2015, Ambassador Ma Mingqiang sought to spread Chinese economic engagement in more diverse regions of the country by promising to help Bangladesh establish two SEZs at the cost of $4.5 billion.41 These are currently under development at Anawara, Chittagong, and Gazaria, Munshiganj, which decentralizes the Chinese presence. In 2018, at an event organized by the Bangladeshi conglomerate Cosmos Group, Ambassador Zuo Zhang detailed Chinese efforts to resolve the Rohingya crisis, an issue that is important not just to people in eastern Bangladesh along the Myanmar border but also at the national level.42

In recent years, China has launched multiple initiatives to develop what it calls “soft influence.”43 Friendship centers, cultural programs, and engagements with think tanks, newspapers, and local governments around the country are China’s channels of choice. In 2015, forty years of diplomatic relations were marked with a three-day cultural program on facets of Chinese life and society.44 That same year, Beijing proposed to establish the Bangladesh-China Friendship Exhibition Centre at a cost of $80 million.45 However, as one local stakeholder pointed out, it is China’s image as an economic powerhouse that is most attractive to the public—creating the impression of it as a “wealth creator” in Bangladesh and not merely an actor passing through the country temporarily.46

China has been using scholarships and educational exchanges to reach out to Bangladeshis, especially younger ones. It has emerged as the preferred overseas destination for Bangladeshi students. During Xi’s 2016 visit, an MoU promising scholarships to 600 students was signed.47 Beyond tie-ups with local universities, where it has opened Confucius Institutes, Beijing has offered Bangladeshi students summer courses in China and visits to the Confucius Institute head office.48 Chinese businesses have also been roped into such outreach programs. China Harbour Engineering Company Limited (CHEC), a Chinese state-owned enterprise (SOE) with an extensive presence across South Asia, has provided scholarships, new facilities, and school supplies to high-school students near one of its worksites in Chittagong.49

Public health was an area of cooperation even before the COVID-19 pandemic. A Chinese naval hospital ship made a port visit at Chittagong in 2013, where it provided medical services.50 In 2015, China provided equipment amounting to $4.1 million to the Health and Family Planning Ministry.51 Since the beginning of the pandemic, it has been helping government as well as private entities with testing kits, protective suits, and other equipment.52 A team of medical experts was sent to Bangladesh in June 2020 to assist in managing pandemic response and mitigation measures.53 Help has been forthcoming from the Chinese private sector too—Alibaba, for instance, sent testing kits and masks to Bangladesh in April 2020.54 The China-backed Asian Infrastructure Investment Bank has so far approved $350 million in loans to Bangladesh to fight the pandemic.55 The vaccine relationship between the two countries hit a speed bump over co-funding of clinical trials of the Chinese Sinovac vaccine in 2020,56 but that seems to have been forgotten now, with Beijing gifting 1.1 million doses of Sinopharm vaccine in two tranches.57 Bangladesh is now reportedly exploring the possibility of co-producing Sinovac in the country, which would align with China’s growing image as a country that is producing wealth and helping Bangladesh move its industry into new areas higher up the value chain.58

Despite all of this rapidly growing engagement, there are elements of Bangladesh’s approach to China that have run into problems. The Rohingya conflict in Myanmar, which has led to an inflow of refugees in Bangladesh after sectarian conflict between Rohingya Muslims and Rakhine Buddhist communities, has been a cause of great concern for Dhaka. It views China as capable of exerting influence on Myanmar, and the two sides have discussed the issue at the highest levels when Sun Guoxiang, special envoy for Asian affairs from the Chinese Foreign Ministry, met Bangladesh’s foreign minister in April 2017.59 China has tried to mitigate any negative Bangladeshi reaction to its stance by providing Rohingya-related aid on multiple occasions. For example, in June 2019 the two sides exchanged letters on providing rice aid to the refugees.60 However, Bangladesh believes geopolitics has come in the way of China doing more to resolve the issue despite promises.61

NEPAL

Nepal is unique among the four countries studied because it borders the Tibet Autonomous Region (TAR), and the fact that the Nepali people have been tied to Tibetans through bonds of trade, culture, and family for centuries. Beijing has been keen to leverage its relationship with Kathmandu to aid its own objectives in Tibet and with Tibetan diaspora communities that have left over the decades. Ahead of the Beijing Olympics in 2008, protests that broke out in the TAR were mirrored in protests in Nepal, which has a significant Tibetan refugee population. One Nepali stakeholder confirmed that Beijing was unhappy with the daily protests organized by the Tibetan community in Nepal at the time.62 Since then, it has pressured Kathmandu into significantly reducing the number of movement passes issued to Tibetan refugees. When Xi visited the country in 2019—the first Chinese leader in two decades to do so—a mutual legal aid treaty, agreements on border management, and even an extradition treaty were discussed.63

The most recent inflection point in Nepal’s relationship with China was in 2015 when India implemented an unofficial, months-long economic blockade to express its displeasure over citizenship provisions in the country’s new constitution. This led to a critical fuel shortage and choked relief material arriving in response to the debilitating earthquake earlier in the year. Most critically, the blockade reinforced the dangers of dependence on one dominant market and infrastructure link, cementing the sense among Nepal’s elites that the country would need to cultivate China to increase its options.64 This led the two countries toward a comprehensive transit and transportation agreement that came into effect in February 2020. Apart from sending a political signal to India, the agreement enabled landlocked Nepal, at least in theory, to end its sole dependence on India for goods and trade by giving it access to Chinese ports.65 While the economic viability of Chinese facilities as an alternative to Indian ports for the transshipment of goods to and from Nepal has been questioned, the agreement also marked the beginning of a period of greater political closeness between the CCP and Nepali leaders, then led by prime minister K.P. Sharma Oli from the Communist Party of Nepal-Unified Marxist Leninist (CPN-UML).

The two parties have coordinated closely on political and ideological issues. This has included high-level meetings such as one between Oli and the chairperson of Chinese People’s Political Consultative Conference, Yu Zhengsheng, in 2016.66 Symposiums, such as one on “Xi Jinping Thought” in September 2019, are regularly organized by the CPN-UML and attended by high profile Nepali and Chinese leaders. The CCP regularly funds visits for members of political parties across the spectrum, from leaders to grassroots-level cadres.67 In May 2021, in a meeting attended by representatives of major Nepali political parties, the International Department of the CCP Central Committee proposed providing COVID-19 assistance through political parties in the country.68

China clearly accords considerable significance to having an ideologically aligned counterpart in Nepal’s power structure, and its current ambassador, Hou Yanqi, has been especially active in the country’s party politics. As rifts within the CPN-UML surfaced in early 2020, Hou met with top party leaders and urged them to stay united.69 Near the end of the year, as the party finally split, a team led by the vice minister of the International Department of the CCP, Guo Yezhou, met with President Bidya Devi Bhandari and CPN-UML leaders to bolster the ambassador’s attempts to avert the political crisis and forestall the party split.70

Increasing cooperation between Nepal and China in multiple areas is not just the product of ideological affinity between the communist parties of the two countries. It is also influenced by the reality of public support for the relationship in the post-blockade period and the elevation of China as a viable development partner, especially after Nepal signed onto the BRI in 2017. There has been growing admiration for China’s growth story and talk of China as a model of political and economic governance. The two countries have signed several agreements on legal issues including boundary management, mutual legal assistance in criminal matters, and cooperation at the attorney general level.

Infrastructure features heavily in the relationship. Even as ratification of the country’s compact with the U.S. Millennium Challenge Corporation’s (MCC) has run into trouble in parliament,71 Nepal has sought Chinese aid for major projects such as the Pokhara International Regional Airport, a cross-border optical fiber link, and the upper Marsyangdi Hydropower Station. The Kerung-Kathmandu cross-border railway project is one of the most crucial ones underway. When completed, it is expected to facilitate Nepal’s connectivity with the rest of the world through China’s road network. As Hari Prasad Bashyal, the consul general of Nepal in Lhasa, noted in 2014, “The expansion of railway networks will help develop trade, business, and tourism along with building relations at the (people-to-people) level between the two countries. The Chinese have shared that they have been considering our request to expand the railway networks to Nepal.”72

As in Bangladesh, China has facilitated technology transfer to Nepal, creating the perception and reality of aiding wealth creation and expanding employment. Emblematic of this is the rising number of joint ventures such as Hongshi Shivam Cements—a combined investment of $333.6 million into a cement factory that aims to produce 12,000 tons of cement daily and employ 2,000 Nepali workers.73 Trade relations have deepened in the past decade, with China accounting for 15.2 percent of Nepal’s imports as of 2019, up from 11.1 percent in 2012.74

Military ties and security exchanges with Nepal have been among China’s weakest in the region. However, new initiatives have been announced since 2017, including the annual joint military exercise Sagarmatha Friendship. Under a Joint Command Mechanism Agreement, the two countries have discussed joint patrolling of the border.75 During Xi’s 2019 visit, they also exchanged letters on providing border security equipment to Nepal.76

The COVID-19 pandemic has allowed China to advance its vision of a Health Silk Road in Nepal. By March 2020, Kathmandu had signed up to the “Chinese model against COVID-19” and started working with China on best practices to handle the pandemic, using Chinese testing kits and other equipment.77 In recent months, China has provided 1.6 million doses of the Sinopharm vaccine to Nepal, in addition to 1,500 oxygen cylinders as a grant.78 Nepal has also worked with China to promote traditional medicine, sending doctors to collaborate with Chinese practitioners.79 During Xi’s 2019 visit, the two countries agreed to cooperate in setting up a plant to produce Ayurvedic medicine in Nepal.80

China is also intent on public outreach. Thirty Chinese NGOs have been operating in Nepal under a framework agreement signed between the Social Welfare Council of Nepal and the China NGO Network for International Exchanges in 2018. Since 2017, Beijing has made offering Mandarin courses more attractive for schools by bearing the cost of employing teachers. Nepal’s premier higher-education institution, Tribhuvan University, among others, has signed agreements to establish Confucius Institutes.81 India has been the traditional destination of choice for Nepali students looking for higher education opportunities abroad, but China, through financial aid and scholarships, has increasingly made itself the destination of choice for those looking for technical skills and graduate degrees, in particular.82 For instance, in April 2015, China announced 1,500 scholarships for five years to facilitate the production of skilled human resources in Nepal.83 An estimated 6,400 Nepali students were studying in China by 2019.84 This has led to a steady infusion of technocrats and experts trained in China within the Nepali establishment, perhaps setting the pattern for a generation.85

Media cooperation and coordination of content has been increasing steadily too. Teams of journalists from both countries regularly visit each other for knowledge sharing and consultations.86 As far back as 2014, a team of Chinese journalists visited Nepal and was briefed by representatives of the Kantipur Media Group, one of the largest media companies in the country. China Radio International runs special Nepali programs as well as Chinese-language classes.87

China has used visits and consultations to expand institutional partnerships, such as one led by the Chinese Institute of Contemporary International Relations (CICIR), a think tank under the Ministry of State Security, just ahead of Foreign Minister Wang Yi’s visit in 2014.88 In 2016, a CICIR delegation met political leaders across the spectrum including then prime minister Pushpa Kamal Dahal, the former Maoist guerilla leader; CPN-UML Chairperson and former prime minister K.P. Sharma Oli; and Nepali Congress Chairperson Sher Bahadur Deuba, who is now serving his fifth term as Nepal’s prime minister, in preparation for Xi Jinping’s visit later that year.89 A widely read newspaper surmised that “China is monitoring Nepal’s political developments, activities of political parties, and international relations through its ‘think tanks.’”90

China has also leveraged environmental cooperation and humanitarian assistance and disaster relief (HADR) to enhance its relations with Nepal for some years. It sent a rescue team within 24 hours of the devastating April 2015 earthquake.91 It followed this up with geologists and seismologists to assess long-term measures.92 The show of solidarity reached its highest level with Foreign Minister Wang Yi visiting people displaced by the earthquake during an official visit.93 Beyond funds and human resources, China has directly participated in reconstruction; for example, by rebuilding the Durbar High School in Kathmandu, which it handed over in September 2020. The two countries also signed an agreement in 2018 under which China would provide HADR equipment to Nepal and help it establish an earthquake-monitoring project.94

SRI LANKA

Sri Lanka has been a flagship of Chinese economic engagement in South Asia since well before the introduction of the BRI in 2013. This has gradually expanded with direct investments and state-backed policy loans.95 The country features prominently in widespread narratives about China’s “debt-trap diplomacy,” with references to mega-projects such as the Hambantota Port and Colombo Port City project (also known as CHEC Port City) usually headliners. Colombo Port City is the largest foreign direct investment in Sri Lanka to date at $1.4 billion, and it promises to create 100,000 permanent jobs once completed.96 But the relationship with China is much more layered and diverse than this narrative suggests, with Sri Lanka exercising agency and intent.

The economic relationship has been highly personalized and tied significantly to China cultivating a relationship with the Rajapaksa family that was in power from 2005 to 2015 and has been again since 2019, this time with brothers Gotabaya and Mahinda serving as president and prime minister respectively. Throughout this period, questions have arisen about the viability of projects and about impropriety.97 But none of this has dislodged a relationship built on a foundation of political and strategic necessity. For Sri Lankans of diverse political stripes, China has been a useful ally—but this was especially true of the Rajapaksas, since many in the international community wanted to hold them accountable for human-rights violations committed during the civil war with the Liberation Tigers of Tamil Eelam (LTTE), and especially in the conflict’s final phase in 2008 when Mahinda was serving as the country’s president.98 For China, the country has offered a friendly stepping stone from which to expand its presence in South Asia; it also represents a potential strategic asset sitting astride sea lanes, through which China’s energy supplies from the Middle East pass.99

China has thus not reached out to just the Rajapaksas. When their bitter opponent, Maithripala Sirisena, defeated Mahinda Rajapaksa for the presidency in 2015, Beijing quickly welcomed a delegation of ministers from his new government.100 In time, Sirisena’s government approved Rajapaksa’s China-funded projects that it had criticized and initially paused.101 In a message to Xi in 2017, Sirisena endorsed the BRI, expressing hope that it would usher in a new era of bilateral ties.102 China continues to emphasize that, irrespective of the political color of the government in Colombo, it views itself as a friend of Sri Lanka. Most recently, this has been reflected in the way that the Chinese embassy named and thanked parties and leaders individually for attending a commemorative event to celebrate the centennial of the CCP.103

The most significant decision concerning Chinese engagement in the country since the return of the Rajapaksas to power has involved passing a bill approving the CHEC Port City in May 2021. This was done just days after the Supreme Court pointed out that sections of the bill were inconsistent with the country’s constitution and required a popular referendum.104 Soon after the bill was passed, ministers released statements assuaging concerns about the port city being granted extra-constitutional status and highlighting investment opportunities that the project would bring to the country.105

China’s importance as a lender, investor, trader, builder, and partner is in part guided by Sri Lanka’s own economic progress that helped it graduate to lower-middle-income status in 2017, effectively disqualifying the country from much of the concessional assistance from the Asian Development Bank (ADB) and the World Bank.106 Because of this, Sri Lanka has felt compelled to diversify its sources of capital, turning substantially toward international bond markets. The share of Chinese loans, while growing, is still less than 15 percent of external debt.107 But the trajectory is clear: in 2019, $684 million out of a total of $1.1 billion in bilateral loans was from China. By comparison, Japan accounted for $178 million in loans and $9.4 million in grants.108 In 2020, loans fell to $720 million with China accounting for $324 million and Japan $161 million.109

Experts say that Sri Lanka needs to improve its debt management overall, not only with regard to China.110 However, for the time being, Beijing is a useful source of funding and its role as a capital provider is widely accepted. Part of the reason is that China has sold the story of its own success. Sri Lankan stakeholders note how government employees on visits to the country were extremely impressed by its economic progress and particularly taken by the message that, if China as a developing nation with its own history of a “century of humiliation” by outsiders could achieve this degree of prosperity, so could Sri Lanka as a postcolonial country.111 Additionally, in the popular imagination, China is seen as a consistent partner and not a fair-weather friend. Beijing’s decision to continue to develop projects in the country despite negative publicity over ones such as the Hambantota Port has strengthened this sentiment.112

A strategy of long-term commitment is evident when one looks at China’s outreach to the general public in Sri Lanka, which is motivated by the reasoning that the Rajapaksas will not be around forever.113 In recent years, it has started coordinating events and funding people-to-people organizations such as the Sri Lanka-China Friendship Association and the Sri Lanka-China Youth Friendship Association. Sri Lanka is increasingly popular with Chinese tourists, who accounted for a peak of 13.2 percent of all foreign tourists in 2016, up from 1.8 percent in 2010, before falling back to 8.8 percent in 2019.114 To capitalize on the two countries’ common Buddhist heritage, China has cultivated the majority Buddhist religious constituency, establishing the Sri Lanka-China Buddhist Friendship Association in 2015 and funding a Buddhist television station.115

China invites Sri Lankan journalists, academics, and policy professionals to the country, and it coordinates with them through platforms such as the Sri Lanka-China Journalists’ Forum.116 Academic institutes and think tanks affiliated with the CCP have ties with research institutes considered close to the Rajapaksas.117 One local stakeholder pointed out the persistence in extending invitations to visit China, “overwhelming” Sri Lankans to the point where they would agree to attend.118

These efforts have successfully created a reservoir of goodwill among the public, which looks at the United States and India through a more cynical lens.119 Some stakeholders said that the current impression in Sri Lanka is that pandemic-related assistance from the United States is conditioned on reducing the scope and intensity of ties to China—which makes the option of accessing U.S. vaccines less attractive on policy and strategic grounds, whatever its appeal may be on public-health grounds.120 The skepticism extends beyond responses to the pandemic, making Sri Lanka wary of motives behind any kind of aid from the United States. Meanwhile, Beijing has taken advantage of this vacuum in the relationship by identifying Colombo’s other immediate needs and extending a $500-million loan to ease the strain on the country’s foreign reserves in March 2020, followed by another $500 million in April 2021.121 The two countries also signed a $1.5 billion currency swap deal this year.122 China has also plowed ahead with vaccine and medical assistance: after providing testing kits and medical equipment in 2020, it has supplied 1.1 million doses of the Sinopharm vaccine to the country.123

UNPACKING VULNERABILITIES IN SOUTH ASIA

Part of the challenge facing South Asian states is that the rapid inflow of Chinese money and the exponential increase in Chinese influence over the last two decades has come against the backdrop of three pronounced systemic vulnerabilities: brittle state institutions, weak civil societies, and high potential for elite capture and corruption.

Not all of the four countries studied have all these vulnerabilities: some have stronger states; some have stronger civil societies; some have less “capturable” elites. Nor are they vulnerable in precisely the same way. But all display at least one of these vulnerabilities, which makes it harder for them to manage and mitigate the negative effects of a rapid inflow of external money and influence while giving them fewer levers with which to steer Chinese energies in directions that support their own national strategies, priorities, and developmental objectives.

Factors that determine whether and how each of these four states is vulnerable range from relative domestic capacity to how political systems and more or less independent civil society groups have evolved in recent history. The presence of a vulnerability does not necessarily indicate an absence of institutions or some independence of civil society. It merely suggests that the ability of these institutions and civic groups to shape and steer Chinese energies varies widely across the four countries.

This is why, for example, the issue of captured or capturable elites is more relevant in Sri Lanka than in Bangladesh, while civil society in Nepal is more capable of fulfilling its role in steering Chinese influence than is the case in Bangladesh. In Maldives, while the risks of elite capture substantially lessened with the change of government in 2018, this could change if power again changes hands in 2023 or 2024. Still, no matter who is in power, the structure of elite politics and the political economy in Maldives makes all of its elites less prone to external capture than those in Sri Lanka. As China’s role in the region will continue to grow—sometimes for good, sometimes for ill—it is important that South Asian stakeholders attempt to buttress their systems and to plug vulnerabilities by learning from the experiences of each other.

VULNERABILITY 1: FRAGILITY OF STATE INSTITUTIONS

Examples of brittle or weak state institutions include those that are too weak to conduct robust due diligence and proper investment screening; weak regulatory bodies; institutions with uneven law-enforcement capabilities, or poor anti-corruption systems; and judicial agencies that are too weak or captured to conduct proper judicial review of executive or legislative decisions.

Bangladesh, Maldives, and Nepal have vulnerable state institutions while Sri Lanka has stronger ones. Sri Lanka has the most robust administrative regimes and capable institutions among the focus countries, and Bangladesh, despite substantial indications of fragility in its institutions, follows closely behind. Yet both still face hindrances in the way they operate that make it harder to stave off external pressure, including from Chinese actors. Nepal is at risk because of long-standing institutional weaknesses that flow from its choppy process of post-monarchy democratization. Maldives suffers from inadequate institutional capacity.

Political pressure on institutions of democracy and governance

Fragility within the political system can manifest itself especially where the ruling political party has a strong leader or a large majority in the national legislature, allowing it to push through laws that benefit a narrow elite or to put unofficial political pressure onto other institutions. Such fragility results in corruption, inefficiencies in bureaucratic and law-enforcement mechanisms, as well as a failure to ensure transparency and adherence to procedure.

Bangladesh has a highly personalized political system in which power has rotated between two families. In a recent event to celebrate Sheikh Mujibur Rahman, Bangladesh’s “Father of the Nation,” Sheikh Hasina, his daughter and the prime minister, asserted that democracy needs an effective opposition to flourish.124 However this is hardly the case in Bangladesh where the Awami League–led government is currently in its third consecutive term, the opposition is in disarray, and the most important opposition leader has been convicted of graft.125 The economy has been unscathed from the effects of the pandemic, at least for now, and the country has recently flaunted its economic muscle by becoming the only country in the region apart from India to help a neighbor by extending it a loan.126

This has meant regime stability in Bangladesh, yet whether elections are free and fair has been questioned, forcing the prime minister to defend the process and making the country vulnerable to interference from a powerful outside power.127 The same allegations are likely to surface during the next elections in 2023.128

Unlike in Bangladesh, recent elections in Nepal, Maldives, and Sri Lanka have seen peaceful transfers of power—from Abdulla Yameen to Ibrahim Mohamed Solih in Maldives in 2018, from Sher Bahadur Deuba to K.P. Sharma Oli in Nepal in 2018 and then back to Deuba again in 2021, and from Maithripala Sirisena to Gotabaya Rajapaksa in Sri Lanka in 2019. This suggests a certain level of stability in democratic governance. But these states are still vulnerable to outside pressure because their governments have made or attempted constitutional amendments to their own benefit and to fend off political challenges.

This is most conspicuous in Sri Lanka, where China has been extremely active and where the Rajapaksa family has been engaged in a long-drawn battle to make the presidency, which it has controlled for extended periods, extraordinarily powerful.129 These efforts began with the eighteenth amendment to the constitution introduced by Mahinda Rajapaksa in 2010. This removed the two-term limit for the presidency and constitutional oversight on presidential appointments to independent commissions, replacing a constitutional council for such appointments with a parliamentary council that would be under greater executive control. The amendment was subsequently repealed under then president Maithripala Sirisena in 2015. However, this repeal has now been overturned by the current Rajapaksa government through the twentieth amendment, which returns many of the sweeping powers from the repealed eighteenth amendment right back to the president while making these actions unchallengeable, even on the basis of fundamental-rights applications. This raises concerns about the maturity of the constitution and the extraordinary reach it offers to the Rajapaksa family.130

Constitutional provisions have been similarly questioned in Maldives and Nepal. In Maldives, which democratized under the current constitution in 2007, powerful leaders in the ruling Maldivian Democratic Party have asked that provisions be changed to transition the country from a presidential to a parliamentary system. President Solih, however, is believed to feel differently.131 In Nepal, the new constitution, which came into effect in 2015 after two post-monarchy national constituent assemblies and years of political negotiations, has been at the center of protests and demands of amendments by Madhesis—people of Indian ancestry residing in the southern Terai region—and other marginalized communities.132 To complicate matters, the CPN-UML, which was in power since 2018, split into two factions, led respectively by K.P. Oli and Pushpa Kamal Dahal. Until he was deposed in July 2021, Oli had continued to serve as prime minister even after losing a vote of confidence in parliament as opposition parties failed to corral the numbers for a coalition government.133

Bureaucratic skill and corruption

The potential to compromise electoral and especially constitutional processes are not the only vulnerabilities in this category. For instance, even though Sri Lanka and Bangladesh fare well with developed institutions, questionable practices and pressure can make their bureaucracies ineffective. In Sri Lanka, for example, questionable actions by the Rajapaksa government began coming to light after the Sirisena government that took power in 2015 reviewed earlier decisions. This included investigations into allegations of nontransparent decisionmaking and corruption in China-funded projects.134 Officials were found to have ignored procedures to provide an unfair advantage to foreigners, including Chinese tourists, leading to losses for the exchequer.135 The Sirisena government also initiated an audit of China-funded projects carried out by its predecessor—including the Hambantota Port, the Hambantota Oil Tank complex, the Sooriyawewa Cricket Stadium, and the Mattala Rajapaksa International Airport (MRIA)—to check for their commercial viability or whether they were sweetheart deals for individuals and/or interest groups.136 This is a key example of how systemic vulnerabilities in the state can make it harder to resist debilitating forms of Chinese influence, much less steer Chinese energies in positive directions for a country.

There have also been allegations in Sri Lanka of mismanagement in different government departments leading to heavy losses. Stakeholders believe there have been instances of collusion between politicians and government departments, leading to cost escalation and mismanagement of funds. Some hint that Chinese projects moved forward because contractors were willing to bribe officials.137 The most serious of these allegations involve CHEC, the company in charge of constructing the Colombo Port City, which was accused of paying over $1 million for Mahinda Rajapaksa’s election campaign through various proxies.138 However, allegations of corruption raised against various members of the Rajapaksa family failed to make much headway in the Sirisena years and were eventually forgotten. In some cases, as with Gotabaya Rajapaksa, returning to power was followed by immunity against corruption charges.139

The political pressure led government departments to hide their lapses by making their operations more opaque, including by not releasing audited financial reports, which in turn made them less efficient.140 Environmental concerns, considered critical for an island nation like Sri Lanka, were disregarded—so while review agencies may be robust in terms of staffing or budgets, they failed to perform their duties in a way that could command public respect and credibility. The 2011 environmental impact assessment report for the Colombo Port City failed to acknowledge the possibility of coastal erosion and damage to the fishing industry. Nor was there any clarity on what the land reclaimed for the project would be used for.141 In fact, in the original agreement for the project, Sri Lanka was responsible for compensating China for damages in the event of a future natural disaster, not the other way around.142 In the case of the Southern, Outer Circular, and Colombo-Katunayake expressways, concerns about flooding were raised but ignored.143

In Maldives, the transfer of power brought to light allegations of domestic corruption by the prior government. In his negotiations with China to restructure debt, Finance Minister Ibrahim Ameer accused the previous government of accepting kickbacks from contractors to keep contract prices high.144 Solih said that “state coffers have lost several billions of rufiyaa . . . due to embezzlement and corruption conducted at different levels of the government.”145 This is reflected in the flagship China-Maldives Friendship Bridge, which has faced multiple questions about environmental degradation and threats to marine life.146 Even after the bridge was completed, Chinese subcontractors were found to be illegally mining sand, claiming that this was permitted under the construction agreement, which suggests that state weakness made the government unable to exercise its proper oversight, regulatory, and enforcement functions—a clear example of how state vulnerability enables unproductive forms of Chinese engagement.147 Another highly publicized deal, the Maldives-China Free Trade Agreement (FTA) signed during the Yameen years, has fallen by the wayside as the new government believes that its terms are not beneficial.148 Beijing’s lack of governance-related requirements and the low importance given to monitoring, along with limited capacity in the Maldivian state, seems to have helped corrupt practices go unnoticed.149

More broadly, a lack of institutional capacity and skills within the civil service enabled Chinese loans in Maldives that would have been screened differently by a stronger state with more robust institutions. Stakeholders argued that Chinese financial institutions differed from all other lending agencies not just in the speed with which they disbursed loans but also in their offers to take care of the “complicated backend” of financial agreements. This resulted in an unusual arrangement during the Yameen years in which Chinese institutions offered loans to Maldivian individuals or companies backed by a sovereign guarantee from the Maldivian state. On coming to power, the Solih government admitted that it did not know the total amount of such loans.150 The central bank stated $900 million as a probable amount of the sovereign guarantee, $300 million more than what the government itself directly owed China, suggesting state collusion with a well-connected private individual working with the Chinese partners.151 In 2020, the Export-Import Bank of China (China Eximbank) asked the government to repay part of a $125 million loan after a private debtor, Ahmed Siyam, failed to make a payment. Siyam—Yameen’s close political ally and a member of the legislature during his presidency—reportedly repaid the loan eventually.152 This kind of arrangement would be almost impossible in a strong state with robust diligence and monitoring mechanisms.

State institutions in Bangladesh are relatively robust compared to those in the other three countries, but stakeholders flag issues with corruption and political influence in approving Chinese-backed projects. By some accounts, almost a third of such projects are likely to be commercially and/or financially unviable but have been allowed because state institutions were unable to resist pressure from politically connected individuals who stood to benefit.153

In 2012, the World Bank pulled out of the Padma Multipurpose Bridge Project because requests to investigate corruption in the project went unheeded by state institutions.154 The project, currently funded by the government and China Eximbank, is considered one of the flagship projects showcasing the Bangladesh-China relationship. There have been no systematic reviews or answers on the charges. The Chinese SOE Sinohydro Corporation winning a $680 million contract in 2014 for part of the project also shows how brittle state institutions can become a problem. It won the bid even though it had been temporarily debarred by the World Bank.155 The companies that lost out said that they had informed the government about the ban on Sinohydro, which the authorities denied. Local newspapers reported that a former communications minister was working with the Chinese firm and had lobbied for it to win the contract. This was not the first time Sinohydro had run into controversy around an infrastructure project in Bangladesh—it had earlier worked on the Dhaka-Chittagong Highway Expansion project and was blamed for stalling it for two years.156 In a similar case, CHEC was given a contract at the Mirsarai Economic Zone in 2019 after joining a local consortium.157 The Bangladesh government blacklisted it just a year earlier, which technically prevented it from working on new projects, after it emerged that it tried to bribe officials.158

A more effective process of bureaucratic oversight, investment screening, and contract review could have raised questions at an earlier stage of these projects, at least pushing the Chinese and Bangladeshi partners to be more transparent and adhere to stronger rules of procedure. The problem has been present across all the four countries, with stakeholders reporting that Chinese loans seem to come with an unspoken expectation that there would either be no tender process or that the tender would be arranged to favor a Chinese contractor. A 2015 report by the Finance Ministry flagged this issue, pointing out that the practice went against the country’s formal transparency and contracting laws. A stronger state might have enforced these. The commerce minister even acknowledged the practice of going with China’s preferred contractors while talking about prospects of Chinese investment in SEZs.159

In Maldives, former president Mohamed Nasheed has raised a similar concern, adding that awarding projects to other countries should have been a more transparent process—“the tendering process happens here, the award (of contract) happens here, the monitoring happens here, and the labour can come from here.”160 To enforce “buy and hire Maldivian” policies would require a much stronger set of institutions than the country has had up to this point. Indeed, under the previous government, laws were amended to bypass competitive bidding.161 And in 2015, the constitution was amended in a rushed session of the legislature to allow foreign ownership of land, which is believed to benefit Chinese projects.162

In Sri Lanka, the earlier Rajapaksa government was accused of abandoning what would have been a state-led tendering process for multiple China-funded projects from road works to stadiums.163 On coming to power, the Sirisena government canceled oil contracts with several companies, including Chinese ones, as guidelines set in law and bureaucratic processes had not been followed.164 The most serious allegations were reserved for CHEC Port City. Lawmakers alleged that the agreement with CHEC for the project was shrouded in secrecy, and the Rajapaksa government refused to share it even with the parliament or the leader of the opposition.165 The area of the project was increased from 200 hectares to 269 hectares without a reason being given or the decision being made public.166 Thus, the fast-growing relationship with China has stretched the state’s limited bureaucratic capacity. This makes it more difficult to conduct a deliberative interagency process that balances competing interests and accounts for all aspects of the relationship with China.

In Nepal, the state has allowed Chinese observers to be unofficially present in government ministries related to development so that they can keep track of China-funded projects, thus subcontracting oversight from national officials to foreign actors that should be the subject.167 Before signing an agreement to build an airport in Pokhara, officials of the civil aviation authority found that China Eximbank had demanded as a guarantee that revenue from all of Nepal’s airports be kept in a joint account with itself.168 In a separate example, the state-owned airline was forced to ground aircraft purchased from China due to unprofitability and operational issues.169 It was later established that the aircraft had been brought into the fleet even before their suitability for Nepal’s needs had been established by government oversight.170 In other cases, local officials had to make peace between Chinese contractors and local laborers in a road project after the latter accused their employer of not paying the legal minimum wage, as a stronger state would have enforced.171 Similarly, the government body in charge of setting school curriculums was left in the dark when schools across the country made Mandarin classes mandatory as part of a direct deal between the schools and the Chinese government.172

Law enforcement

Vulnerabilities that flow from weak institutions can be seen in law enforcement as well. With the expansion of engagement with China in multiple directions, state agencies need to cope with changing scenarios and to modify their operating procedures.

According to the World Justice Project’s 2020 Rule of Law Index, all four countries experience significant influence by the political regime of the moment on nominally independent law-enforcement agencies. On a scale of 0 to 1—with 1 indicating the least politicized criminal justice system, and 0 the most—Bangladesh scores lowest at 0.26, while Sri Lanka scores highest with 0.49. Nepal scores 0.40.173 It follows that, when pressured by China, politicians or governments tend to pass its requests or demands onto state agencies. And, as it has become increasingly sensitive about how it is portrayed abroad, China has started making demands on the resources of law-enforcement agencies abroad.

In 2020, for example, 122 Chinese nationals were arrested in Nepal and sent back to China after local authorities failed to file charges against them. The Nepali and Chinese authorities contradicted each other on the nature of the operation, with the former claiming that they acted alone with information from Chinese authorities, while Beijing claimed that it was a joint operation.174 According to stakeholders, Chinese requests to Nepal’s police started ahead of the 2008 Olympics when pro-Tibet protesters were arrested.175 This elevated level of vigilance returned during Xi’s 2019 visit, not only because of the government’s initiatives but also because of requests made by Beijing.176

Reports of political influence on the police and other law-enforcement agencies are not new in Bangladesh either. International human-rights organizations have highlighted instances of how the police has been used to restrain the political opposition of the day and of citizens being arrested on charges of anti-government actions.177 While incidents of police action in projects funded or constructed by Chinese entities come up in conversation with stakeholders, they rarely appear in newspapers.178 At least one project—a power plant in Chittagong, built as part of a joint venture between a Bangladeshi and a Chinese company—has seen unrest over the years. In 2016, four people were killed by the police, who fired on demonstrators protesting against the plant’s construction.179 Five people were killed in connection with the same project in April 2021 when demonstrators protesting against the Chinese subcontractor clashed with the police.180

The last word

Of the four states, Bangladesh and Sri Lanka exhibit the strongest administrative systems. However, both are impeded by domestic systemic deficiencies that make them susceptible to foreign interferences. These include pressures on the institutions and administrative apparatus from members of the establishment that prevent them from playing the roles they are designed to play. In Bangladesh, corruption and elite interference have led to the weakening of the system of investment screening and contract review, leading to nontransparent agreements with Chinese partners. In Sri Lanka, similar interference has aided entrenched elites, leading to inefficiencies, cost escalations, and mismanagement of funds.

Nepal and Maldives demonstrate deficient institutional capacity that makes them vulnerable. Nepal is still in the process of institutionalizing its systems. This—along with other reasons like the regime’s preference for Beijing as a partner—has made it particularly susceptible to Chinese influence. Faced with accelerated engagement with China on multiple fronts, this has manifested itself in stretched bureaucratic capacity, from setting up rules of procedure to oversight mechanisms and law enforcement. For Maldives, which democratized in 2007, the challenges are associated with limited institutional capacity and skills. This has been reflected most significantly in loans accepted under terms that would have raised red flags in any system with adequate checks and balances. But, unlike the issues plaguing Sri Lanka and Bangladesh, these are not inadequacies that can be corrected primarily with political will. Nepal and Maldives will need to develop robust institutions from the ground up and invest in building capacity and experience over years. Till then, these inefficiencies will exist, with the extent of Chinese entrenchment often obscured by institutional weaknesses.

VULNERABILITY 2: INDEPENDENCE OF CIVIL SOCIETY AS A CHECK ON EXTERNAL PRESSURE

In a well-functioning political system, civil society provides an independent check on state action. Robust civil society should be able to monitor and mobilize when Chinese influence is wielded at the expense of the public in the four countries studied. Individual civic actors and groups do call out improprieties by Chinese actors or by domestic political or bureaucratic institutions and report the facts. Nepal and Sri Lanka fare well in this category, albeit for different reasons, while Maldives and Bangladesh display significant vulnerabilities. This is also becoming more challenging in all four countries because of policy measures through which governments have sought to regulate and potentially restrict civic speech.

Governments in the four countries, whether weak or strong, tend to restrict the ability of civil society to criticize China or Chinese activities in two ways. When Beijing’s relations with a government are strong, the latter tries to bury criticism. Alternatively, civil society itself can be pliable and subject to government influence, altering its message under state pressure. More often than not, the state pushes harder on criticism of China where civil society is stronger. This has been the case in Nepal, for example. By contrast, in Bangladesh, which has a weaker civil society and little media freedom, civic organizations are more likely to comply with requests to tone down criticism of China-linked activities because they are prone to pressure or vulnerable to enticement.

Challenges for civil society in Nepal

Among the four countries, Nepal is probably strongest in terms of the media’s capacity to provide independent oversight of the state and of Chinese activities. According to the Reporters Without Borders (RSF) Press Freedom Index, conditions for media in the country have marginally improved in recent years.181 Problems like intimidation of journalists or holding back government advertisements to punish “recalcitrant” publications do exist. However, the media is diverse and vibrant. It carries varying perspectives on the relationship with China, including calling out either the government or Beijing when questions arise. The media has to deal with pushback from both but it has been strong enough to navigate this. However, the government has been considering various laws that are of concern in this regard, including one that would see the autonomous body that oversees freedom of the press replaced by one under government control.182 A second law would allow the government more control over state television and radio stations.183 The anti-cyber-crime National Transaction Act has been used to detain journalists.184

Nepal’s newspapers have also been the target of Chinese ire, raising the stakes for them to maintain their critical editorial line: when one newspaper published an article on the secrecy surrounding the origin of the coronavirus pandemic in China, the Chinese embassy harshly criticized the editor by name.185 The greatest Chinese pressure has been on media that report on the Tibet issue. The state-owned national news agency Rastriya Samachar Samiti does not report on China-funded projects, on international aspects of the Tibetan refugee issue, or on the Dalai Lama. This has been as a direct result of Chinese pressure: when the agency carried a report on the Dalai Lama in 2019, it was criticized by the Chinese embassy. The communications minister then confirmed that an investigation had been ordered on three journalists, saying “we should be sensitive to our neighbours’ concerns.”186

Still, despite this political pressure, a 2012 study found that the private media gives adequate space to domestic and international Tibetan issues. Tibetan issues tended to be reported more in the private media ahead of any high-level bilateral visit.187 However, journalists say that it has become increasingly difficult to get approval from editors for articles on Tibetan issues, even in the private media.188 According to one senior journalist, government officials shy away from responding to reporters who solicit comments on China-related stories.189

Civic organizations in Nepal share these challenges on Tibetan issues: space to engage with the refugee issue has shrunk substantially for all civil society organizations since the 2008 Beijing Olympics. Under instruction from the authorities, and at the request of Beijing, the police have prevented the civic activist community from public expressions of any kind at the risk of arrest. Some say this extends from major events like celebrating the Dalai Lama’s birthday to relatively minor expressions of solidarity with Tibet, including even wearing clothing with Tibetan characters. Protests or expressions of solidarity with the cause are quickly subdued.190 Stricter measures were put in place ahead of Xi’s 2019 visit, leading to detentions, which were then kept secret to prevent a public outcry during his visit.191 The same year, a member of parliament was suspended by the Samajbadi Party for attending a convention on Tibet in Latvia. His companion, another lawmaker from Rastriya Janata Party Nepal, however, escaped punitive measures.192

Tibetan refugees are not issued Nepali passports and depend on movement passes as proof of identity, the issuance of which has almost stopped in recent years, effectively restricting them to their locations. Community organizers say that it has become difficult to operate in Nepal, as government agencies are unwilling to work with civic organizations that work with Tibetans. This includes bureaucratic hurdles to getting new civic organizations registered and to existing organizations’ freedom to operate.193 In recent months, for example, community organizers have found it difficult to arrange for COVID-19 vaccines for Tibetan refugees, given that most of them are undocumented.

Pressure on media in Bangladesh

Bangladesh faces distinctive challenges, in part because the nature of Chinese pressure is different there than in the other three countries, and the Chinese embassy has adopted a distinctive strategy. The media has been largely free to regularly report on issues related to Chinese projects, including impropriety in tendering and allegations against Chinese companies lobbying for projects or the local partners that have helped them. At the same time, stakeholders say that officials periodically pass on requests and unofficial advice to not be too harsh in criticizing initiatives led by China, and that on occasion they suggest carrying reports that would be positive for its image.194

The gap between the extent of Chinese initiatives and the public’s awareness or opinion about those initiatives is widest in the case of Bangladesh. Of the four, it is the one with the greatest number of infrastructure projects being developed with Chinese assistance. Bangladesh also has a relatively well-established security relationship, based on the purchase of military hardware, with China. However, China is hardly ever present in the public’s imagination. To tackle this, the Chinese embassy prioritizes outreach to the media instead of trying to coerce it with criticism of editors and stories. It has aimed largely to shape the message, not to bury it. Scholarships that allow journalists to spend up to a year in China are awarded frequently. Some of the journalists involved have even been hired by Chinese state-owned media. The embassy also organizes workshops on various aspects of BRI engagement in Bangladesh, in partnership with local newspapers. Embassy officials, including the ambassador, regularly visit these newspapers’ offices and meet their staff in friendly exchanges.195 The Chinese embassy is more sensitive to issues touching Tibet than to criticism of the BRI. In 2016, for instance, it objected to an exhibit in the Dhaka Art Summit that featured letters written by Tibetan protesters who had self-immolated. The organizers eventually had to cover up the art, in an echo of the kind of pressure related to Tibetan issues visible against civic organizations in Nepal.196

Stakeholders argue that the gravest challenges to civil society in Bangladesh arise not necessarily from reporting on China itself but from showing the government’s cooperation with China in a bad light. Media ownership is opaque and rests with a few families with close business or political connections. Financial statements are seldom made public, and there is little official information about media owners or their other business interests.197 Weak media freedom is a systemic vulnerability in Bangladesh, and one that is deepening. RSF notes regular incidents of intimidation and detention of critical journalists.198 The Digital Security Act, which allows the police to make arrests without warrant, has been widely used to arrest media workers for allegedly criticizing the government on online platforms. This has extended to cartoonists, photojournalists, and reporters.199 Media weakness can also show up in the form of self-censorship: for instance, interviewees say that when periodic incidents of unrest occur due to labor trouble in China-funded projects, it is likely that laws and informal directives from the government are being used to keep them out of the papers. USAID’s 2019 Civil Society Organization Sustainability Index (CSOSI) notes these problems and states that the reasons for shrinking civil society space in Bangladesh can be traced back to self-censorship, intimidation, and clampdowns on protests.200

Nascent, recovering media in Maldives

The media situation in Maldives has shown strong signs of improvement in recent years, with the country steadily improving its score in the World Press Freedom Index.201 This owes much to the rollback of a draconian defamation law as part of President Solih’s electoral promise of ensuring press freedom. The law passed in 2016 threatened jail time and hefty fines for journalists accused of slander.202 The regime of former president Abdulla Yameen was known for its antagonistic approach to the media, often shutting them out of covering important political developments. Arrests of journalists occurred regularly; for example, in 2018 when British and Indian reporters were among those detained by police when covering an impasse between the Supreme Court and the president.203 When a popular blogger was stabbed to death in 2017, his family said that “Maldives is a dangerous place for anyone who dares to criticize the ruling regime, or who expresses opinions about the state of society.”204

More recently, however, there have been fewer instances of muzzled reporting on China-related issues or of censorship. Under Solih, newspapers regularly report on China-funded projects and on corruption or impropriety in awarding contracts. However, the media landscape is still nascent with limited expertise on the editorial and organizational aspects of media work.205 Popular newspapers have shut down, even under a government that is not antagonistic toward the media,206 and media independence and self-regulation are far from complete. Regulatory organizations like the Maldives Broadcasting Commission (MBC) and the Maldives Media Council (MMC) include active involvement by the government—the president nominates members to the former, while the minister of information nominates the public candidates to the latter. Reports suggest the government is planning to merge the MBC and the MMC with the eventual aim of giving the government and the parliament regulatory power over media outlets.207 This could potentially become a weapon in the hands of a future government antagonistic toward the media. It could also be a vulnerability if Chinese or other actors pressure the government to use this power to stifle critical reporting.

The regime’s long hand in Sri Lanka

In Sri Lanka, the mainstream media has traditionally been pro-government. As a result, the degree of its pro- or anti-China leanings has depended on the outlook of the government of the day.208 RSF describes media ownership patterns in the country as “concerning” because just four entities—including the government—account for 75 percent of the print readership. Many of the nongovernment media owners are known to be associated with politics, leading to questions of independence and bias.209 According to CSOSI, conditions for civil society, including the media, had improved since 2015 but started to decline in 2019. It attributes this to rising scrutiny by the state and instances of harassment.210

There were reports critical of the government during the early years of Mahinda Rajapaksa’s tenure as president, which was marked by the end-phase of the civil war and the final defeat of the LTTE. In the same period, there were several high-profile cases of abductions and murder of journalists.211 International human-rights organizations raised the issue of the protection of journalists and questioned the role of the Rajapaksas in obstructing the investigation of cases. One journalist who went into hiding after Mahinda Rajapaksa was elected prime minister in 2019 claimed to have been targeted in 2008 and again in 2019, and he told Human Rights Watch that “every time the Rajapaksas come to power, journalists are threatened.”212 The Rajapaksa regime was also accused of buying influence. According to one investigation, the government gave free laptops and interest-free car loans to over 500 journalists, while the treasury used taxpayer funds to pay the interest on these loans.213

The China–Sri Lanka relationship has been under greater scrutiny in the media since 2015, when the Sirisena government came to power. This has mostly, however, meant reports questioning decisions by the earlier Rajapaksa regime, not necessarily questioning China’s actions. The Tamil-language media has been more outspoken than the Sinhala media, albeit using nuance to get their point across. For example, they have suggested that China has always had its own best interests, not Sri Lanka’s, at heart while engaging in the country.214

The practice of calling a government in Sri Lanka pro- or anti-China is more common in the foreign media than in outlets within the country. Domestically, a government developing close relations with China is generally reported far more tactfully. The media tend to depict governments as pursuing nonalignment and not necessarily leaning toward Beijing—for instance, the Sirisena government’s decision to continue with Rajapaksa-era Chinese infrastructure projects and loans was mostly framed in these terms. Recently, however, the passage of the Colombo Port City bill and subsequent disclosure of the exceptions built into it has ignited a debate. Part the political and administrative elite seems to believe that Sri Lanka’s eagerness to benefit from its friendship with China is moving it too far away from the principles that guided its relations with other countries.215

The Chinese embassy has attempted to pressure media outlets into retracting unfavorable reports, directly or through the government. Media outlets are frequently contacted to retract reports or to “issue clarifications.”216 In 2020, the Twitter handle of the Chinese embassy was suspended for a short while after it used harsh language to criticize anti-China views in Sri Lanka.217 One interviewee suggested that, in the absence of laws that bar foreign funding for media organizations, China has invested in local media organizations, including helping to set up a Buddhist television station, although this allegation cannot be investigated or proven.218 Since 1963, the state-run China Radio International has been running its Tamil service from Colombo, which is its most popular international service.219 Its Sinhala language service has run since 1975.220

The last word

Civil society in the four states in this study are a mixed bag in terms of their ability to monitor independently Chinese inducement and pressure. Nepal and Sri Lanka fare well, though in different ways. While Nepali media organizations present a multitude of views, they have been facing mounting pressure when it comes to Tibet. Reporting of the issue is discouraged, and penalized in some cases. Organizations and individuals working with Tibetan refugees are restricted in what they can do and how they express themselves. Sri Lanka has seen more questions raised about the connections between the Rajapaksas and China since 2015, when Sirisena was elected president. Significantly, in both cases Chinese stakeholders in the country use their connections in the government to discourage actions that may be construed as critical of China.

In Bangladesh and Maldives, the problem is one of limited capacity and the role of the government in guiding the media. Bangladeshi media is prolific in its reporting of delays in China-led projects or in questioning the terms of agreements signed with Chinese companies. However, there are fewer articles that directly question the government’s decisions on engaging with China. Interviewees mention unofficial advice that is often passed on from various quarters of the government to guide the tone on issues concerning Bangladesh’s neighbors. In Maldives, where the civil society space is nascent, the government’s guidance of the media is more direct in terms of their association with regulatory bodies. In both countries, pressure for anticipatory compliance can be used by Chinese or other foreign actors that are close to the government to influence the narrative.

VULNERABILITY 3: INFLUENCE-ABLE ELITES AND POTENTIAL CAPTURE

Examples of vulnerability to elite capture include systemic or entrenched elite corruption and chronic crony capitalism. These can provide fertile ground for influence buying by an outside power or interest group. External funding can, as well, influence the findings of local research institutions.

Of the four countries studied, Bangladesh has the strongest state with the fewest indications of elite capture. Its political system is anchored by a strong political party in power that has no need to turn to foreign influences or supporters to bolster its domestic position. It is also the country whose ruling elite has most skillfully navigated and balanced relationships with India and China. The leadership’s actions suggest that tilting toward either will limit the elite’s and the country’s room for flexibility; thus, there has been no need to lean too heavily on Chinese influences for political support. At the opposite end of the spectrum lies Sri Lanka, whose elite has been prone to foreign influence and even capture because this buttresses domestic needs.

Nepal and Maldives are midway between Bangladesh and Sri Lanka in the relative strength of their elites in the face of foreign money and enticements. The Solih government in Maldives has rejected the significant Chinese influence that had shaped the priorities of the Yameen government, but this could change if power changes hands. While Nepal-China relations have evolved rapidly under the last several governments, recent communist ones have been more open to direct influence from Beijing, raising questions about how durable that will prove to be now that the Nepali Congress is back in power. In both countries, future elections will likely indicate whether the elites that will govern in the coming years will be those whose political weakness or financial circumstances make them more or less prone to capture.

Cultivating the Rajapaksas in Sri Lanka

Where domestic institutions and civil society are relatively robust, Chinese actors have turned to political and business elites in highly personalized ways to pursue and support Chinese interests. Still, it is hard to conclusively establish connections between elites and foreign stakeholders.

For China, the late 2000s provided an opportune moment to cultivate the Rajapaksa family in Sri Lanka, where state institutions are comparatively strong. The country was then grappling with the end of the twenty-five-year civil war that left the country polarized and the regime drawing international scrutiny for its human-rights violations. The economy was heavily reliant on short-term external financing, with capital flows falling as a result of the global financial crisis, leading to a demand by the elite for alternative sources of capital.221

China was already the largest donor to Sri Lanka by the end of the 2000s, offering over $1 billion in aid annually since 2008 without conditioning it on improvements in internal governance.222 Its unwavering support for the Rajapaksa government on human-rights issues at international forums, most significantly the UN Human Rights Council (UNHRC), further cemented its relationship with the family. The economic relationship flourished with Chinese investment in several mega projects, including the Hambantota Port in Mahinda Rajapaksa’s home constituency, started in 2008, and the MRIA, started in 2009. The proposal for the Colombo Port City was submitted to the government in 2012. By 2011, China accounted for the largest share of FDI flowing into Sri Lanka. Around the same time, it overtook Japan as the largest provider of development assistance.223

The close relationship between China and the Rajapaksas truly became public only after Maithripala Sirisena became president in 2015. By this time, however, Chinese actors were so deeply entrenched in Sri Lanka that no government could simply reverse the trend. The country had joined the BRI in 2014, and Chinese financial institutions and SOEs were on the lookout for even more opportunities to loan and invest, partner and build. Sirisena and his prime minister, Ranil Wickremesinghe, soon turned to Beijing too. Investigations began to reveal a rush to launch projects without feasibility studies and environmental assessments.224 The lack of a transparency clause in some Chinese loans meant that decisionmakers had steered projects to Chinese contractors often without following a tendering process. For example, the Colombo Port City project was awarded to CHEC without competitive bidding, with the company submitting a proposal after Mahinda Rajapaksa visited the prospective site.225 As one interviewee put it, the more Sri Lanka bought, the more corrupt politicians gained.

The Rajapaksas’ favoritism toward Chinese companies has faced regular criticism. Studies comparing interest rates on loans from Chinese institutions against those from the ADB or the World Bank have found the former to be comparatively expensive, raising questions about the logic and cost of borrowing from China.226 The hold that China had over the regime between 2005–2015 through companies and projects is evident in the way that agreements were proposed as well as the means through which the projects were carried out. For example, in the initial agreement for the Colombo Port City the government agreed to compensate CHEC in case of damages from a natural disaster. The agreement also stipulated that the airspace above the project would be considered Chinese airspace.227 These pledges were revised when the Sirisena government renegotiated the agreement.

However, the current Rajapaksa government pushed through the Colombo Port City Economic Commission Bill in May 2021. This sets up the Colombo Port City SEZ and Colombo Port City Economic Commission to go ahead, notwithstanding the concerns expressed by some in Sri Lanka. The bill has met with political opposition and widespread criticism.228 Opposition politicians have objected on various grounds, from claiming that it—in effect—establishes the port city as “a province of China” to claiming that it makes Sri Lankans “servile” to foreigners and noting that it violates twenty-five acts passed by parliament.229 While some of this criticism is hyperbole, the bill was pushed through even though a petition against it was still being considered by the Supreme Court. The court found parts of the bill unconstitutional and asked for a referendum, but the parliament eventually passed it, albeit after accepting suggested amendments.230 This incident is in stark contrast with Sri Lanka’s approach to infrastructure projects aided by other partners where the government has been open to revising its decisions. Examples include approving and then declining the MCC grant from the United States; or, deciding against developing the Colombo East Container Terminal with India and Japan in the face of domestic protests.231

Allegations that the Rajapaksas were captured by Chinese interests have circulated since Mahinda’s first term as president. After the 2015 elections that swept Sirisena and Wickremesinghe to power, agencies started investigating allegations that CHEC had paid over $1 million to fund Mahinda’s election campaign. CHEC’s parent company denied these allegations. The Chinese embassy waded into this controversy, vouching for the innocence of the company.232 In 2016, an associate of Mahinda’s brother, Basil, admitted that he had been given a large sum of money to purchase sixteen acres of land and build a house on it. It was alleged that the real owner of this land and house was Basil himself. The authorities eventually decided to auction off the property.233 Others in the family, including Mahinda’s son, Namal, and his brother, the former defense minister and current president, Gotabaya, were accused of embezzlement and money laundering.234 In 2019, the Rajapaksas were accused of selling off prime land belonging to the army to an international hotel chain.235 However, most of the charges were dropped and Gotabaya received immunity in 2019 when he became president.236

Maithripala Sirisena fought the election of 2015 on a platform explicitly built around taking back the country “from foreigners.” Referring to the presumed closeness between the Rajapaksas and China, he said that “this robbery is taking place before everybody and in broad daylight . . . if this trend continues for another six years, our country [will] become a colony and we would become slaves.”237 Soon after his inauguration, Sirisena visited Beijing to renegotiate more than $5.3 billion of deals signed by the previous government.238 China-funded projects were put under scrutiny and—in a move that would reduce the government’s dependence on China at the UNHRC—he signed a resolution to reconsider the government’s role in the civil war through transitional-justice mechanisms.

However, despite pledges to “protect Sri Lanka’s sovereignty” from Chinese lending, the poor state of the economy soon forced Sirisena’s government to turn to Beijing once again.239 Projects that had been placed under review were cleared as well. China accepted this renewed momentum, calling itself a friend of all Sri Lankans.240 The familiar process of grants, loans, and projects started once again.241 The Sirisena government also agreed to allow Chinese SOEs to take a controlling interest in managing the Hambantota Port under a ninety-nine-year lease. Even at this time, certain developments worked in favor of Chinese companies. For example, Wickremesinghe admitted that the government had agreed to Beijing’s request that the first set of proposals for operating Hambantota Port be solicited from Chinese companies.242

The return to power of the Rajapaksas in 2019 has been seen by both China and the returned ancien regime as an opportunity to revive the old partnership. While the Sirisena years saw the government solicit and accept Chinese help, they were also marked by greater freedom of speech, including the lifting of bans on news websites that had been critical of China-linked projects. This allowed the China–Sri Lanka relationship to be questioned in popular discourse, even as it advanced on many fronts. It also enabled public dissent against the Rajapaksas.243 This was a shift in the operating environment for Chinese actors. In one instance, the Chinese embassy commented that the “Sri Lankan people and government should have some gratitude for the things given.”244 This openness under Sirisena has affected the ability of Beijing and Rajapaksas to resume the earlier arrangement seamlessly. However, it has not stopped China from reaching out to various constituencies across the political spectrum, most recently on the occasion of the hundredth anniversary of the CCP, when Beijing invited twelve Sri Lankan political parties to attend a commemorative conference in June 2021.245

President Gotabaya Rajapaksa has let his preference for “China-style development for Sri Lanka” be known. Apart from the CHEC Port City project, some argue that an FTA is the key to the success of this putative model. The government has reportedly removed officials in the National Medicines Regulatory Authority after they questioned a decision to import Sinopharm vaccines, which were at the time unapproved by the World Health Organization. Yet soon after, 600,000 doses were imported.246 In the meantime, some have claimed that the government is setting up a process to sell more state-owned prime land to CHEC and its local intermediaries.247

Chinese engagement of civil society in Sri Lanka

Chinese interests have sought to capture and influence key individuals in Sri Lanka’s vibrant and robust media, as an alternative to politicians, to get their view across in the public discourse. Interviewees note various instances of the Chinese embassy reaching out directly or through the government to ask for retractions or clarifications on reporting it considers inimical to China’s image. In some cases, the embassy has developed highly personalized relationships with journalists to glean insights about the workings of media organizations and to wield influence over them. The goal is to have enough clout in various publications to be able to intervene in the editorial process when an article that China believes shows it in a negative light is about to go to print. The influence would allow China to have such articles spiked before they are printed, avoiding the messy process of demanding retractions after the fact.

Chinese actors also find it effective to operate through proxies. Websites modeled after traditional mainstream news websites funded by Chinese sources disseminate news and opinions that focus on portraying China positively. These websites are secretive and do not disclose ownership or funding details. Interviewees point out that, while the COVID-19 pandemic has hurt traditional media whose revenue has decreased, these websites continue to be well funded, often in the form of advertisements or sponsored articles from Chinese companies or the embassy.248

Organizations dedicated to good relations and friendship between the two countries—for instance, between elite journalists—have an active online and social media presence, helping to amplify positive impressions about China. China-linked journalists sometimes publish op-eds in mainstream newspapers on topics ranging from criticism of Western media’s propaganda about COVID-19 to commentary against “U.S. imperialism.”249 In some cases, publications acknowledge their Chinese partnerships, as in the case of the Sri Lanka Red Cross Society, which publishes the quarterly magazine Subhasara jointly with China Radio International.250 Similarly, the Sri Lanka-China Journalists Forum and the Chinese Cultural Centre sponsor the bi-monthly magazine People’s Republic of China.251 To reach out to the public-policy community, institutions associated with China’s State Council or the CCP have started directly building ties with Sri Lankan think tanks for knowledge and experience sharing.252 Chinese actors also directly fund educational institutions to set up specific centers, such as the Chinese Academy of Sciences funding the China-Sri Lanka Center for Education and Research at the University of Ruhuna in the southern part of the country.253

Cultivating political elites in Nepal

In Nepal, a whole new political elite has emerged as a result of the end of the Maoists’ guerilla struggle, the collapse of the monarchy, and the formation of a presidential republic in 2008. India’s 2015 economic blockade further changed the elite by entrenching a group of politicians carried along by a groundswell of anti-Indian sentiment and a desire in Kathmandu to forge closer relations with China. The communists, who were in power between 2018 and July 2021, were also ideologically receptive to China, with greater willingness to accommodate it on Tibetan issues, and interested in nurturing closer ties to the Tibet Autonomous Region. Taken together, these dramatic changes since 2008 have created fertile ground for China to turn the elite into a sympathetic constituency.

China’s engagement with Nepali elites focuses on political affairs to the point of contradicting one of the central tenets of its diplomacy, namely that about noninterference in a country’s internal affairs. In 2017, as the Madhesis and other marginalized groups decided to oppose elections over their objections to the new constitution, China provided $1 million to the government to hold the polls. As expected, the China-friendlier Dahal-led government showcased this Chinese support for the government and the new constitution.254 More recently, as the two factions of the communist party sparred in 2020, China’s Ambassador Hou Yanqi was particularly active, meeting leaders from various parties and the leading protagonists of the two factions—Dahal and Oli.255 She even met the president to attempt to broker a truce; however, this meeting created a minor diplomatic incident for being held without the knowledge of Nepal’s foreign ministry.256 (A former Nepali ambassador to China has claimed that there was nothing unusual about Hou’s meetings—it was normal diplomatic practice for an ambassador to try to understand the political situation during a crisis.257) Once it was clear that Oli and Dahal were not going to reconcile, a team led by the vice minister of the International Department of the CCP traveled to Sri Lanka to meet senior politicians and support Hou’s efforts.258 In its five-day visit, the delegation met the president as well as Dahal, Oli, and other senior party leaders in a final attempt to resolve the crisis. It also reached out to opposition leaders, meeting former prime ministers Sher Bahadur Deuba and Baburam Bhattarai, in case the Oli government were to be replaced by a non-communist one.259

The Nepal-China political relationship has also included workshops organized by the International Department of the CCP aimed at cultivating individual political workers, especially those belonging to the CPN-UML. One such meeting was organized virtually at the height of China-India border tensions in 2020.260 The other, a two-day symposium on “Xi Jinping Thought,” was held days before Xi’s visit to Nepal in 2019.261

The scope and scale of Chinese money inflows—jumping to $220 million in FDI for fiscal year 2019–2020 from $116 million the previous year—has the potential to fuel individual-level corruption.262 The inflows fund a range of projects, from government-to-government agreements on major infrastructure projects to micro-enterprises in the private sector. The problem of influence and corruption has arisen frequently, and Chinese actors have all but acknowledged it. For instance, a Chinese corporate participant in a workshop at Fudan University said that “every political party, government body, local pressure group and other visible and invisible groups [in Nepal] have to be paid.”263 Interviewees suggest that corruption is prevalent even at the level of senior political leaders.264

Chinese capital has flowed into major projects located in the electoral constituencies of major communist party leaders. One example is an industrial park slated to be in Oli’s constituency at the cost of millions of dollars.265 Procurement, too, has raised the specter of elite corruption. In 2016, when the tourism ministry insisted on the purchase of six aircraft from China with a concessional Chinese loan, the national carrier, Nepal Airlines Corporation, objected that the planes would be grounded often as well as cost too much to maintain and insure, affecting the airline’s profitability.266 After the ministry insisted, the planes were purchased but, as predicted, they were soon grounded and the airline is now looking for buyers for them.267 There have also been attempts to steer contracts to Chinese companies without competitive bidding. In 2018, the contract for a digital action room in the Prime Minister’s Office was canceled after it emerged that it had been awarded to Huawei without an open tender, as required by laws on public procurement. Tendering was skipped in this instance under direct pressure from an adviser to the prime minister.268

Other cases of noncompetitive contracts include the $2-billion, 1,200-megawatt Budhigandaki Hydropower Project, which has been plagued by allegations of impropriety. In 2017, the communist government led by Dahal awarded the project to the state-owned China Gezhouba Group Corporation (CGGC). There was no competitive bidding, and the agreement was signed with much fanfare in the presence of the prime minister and China’s ambassador.269 Later that year, the new government led by the Nepali Congress’s Sher Bahadur Deuba rejected the agreement after a parliamentary committee judged it irregular and nontransparent.270 However, once a communist-led government came to power again in 2018 with Oli at the helm, that decision was overturned and the project was awarded once again to CGGC without competitive bidding. In sum, projects have not followed the national interest so much as they have followed the interests of the individuals and political parties in power at any given moment.271

The last word

This analysis finds Sri Lanka to be the state where elite capture and crony capitalism has advanced the most. As evident under the Sirisena government, attempts to curb Chinese influence are limited by the heavy dependence of the economy on foreign inflows. Additionally, the Rajapaksa government’s need for external support after the end of the civil war, as well as its proclivity to limit and shape civic discourse, offered Beijing a continuing opportunity to increase its influence.

Bangladesh, led by a party strongly in control of the political process, is at the other end of the spectrum, with fewest indicators suggesting undue Chinese elite engagement or capture is underway. However, with a growing number of questions about undue influence of the administrative machinery over the electoral process, the general election in 2023 will be crucial. If the incumbent government has to turn to its powerful neighbors for an endorsement of its legitimacy in a postelection scenario, this will allow China to make further inroads.

Upcoming elections in 2023 and 2024 are also crucial for Maldives and Nepal. They will determine the direction that these countries take to confront challenges at home in the face of enticements from abroad. In Nepal, the communist regime in power over the last few years has been more receptive to Chinese influence. The current Nepali Congress–led government does not share the ideological closeness of the previous government with the CCP, but it has inherited the need to develop alternatives to Nepal’s overdependence on India as its supply and infrastructure link. Similarly, a future government in Male may decide to reverse the current one’s decision to turn away from China if that means greater support for the economy in a post-pandemic scenario along with assistance in infrastructure development. Either development will allow greater involvement of Chinese actors in these countries, increasing the likelihood of influence peddling and entrenchment.

LESSONS LEARNED

China’s Goals

China’s main asset is its economic levers of influence and Chinese actors are proactive in wielding these.

China’s primary instruments of influence in the four countries are economic, though they serve longer-term Chinese strategic ends and help expand its influence in a region that has traditionally been considered as India’s strategic backyard. Its loans to Sri Lanka were at $4.6 billion in 2020, despite the pandemic, and the figure for Maldives is believed to be between $1.1 and $1.4 billion.272 China is helping to construct mega infrastructure projects in every country in the region, in most cases with money that it has lent them. Chinese actors are proactive in seeking opportunities: interviewees offered various examples of them approaching public or private stakeholders in the four countries with suggestions for engagement.273 Chinese actors identify opportunities and make offers without waiting for the country to ask first. Chinese embassies, SOEs, private firms, journalists, and other actors present in a country share information with one another and coordinate insights to identify and hone these prospective opportunities for engagement. These could involve building local capacity, identifying a business partnership, or offering technology packages and financing around, for example, 5G telecommunications. Many Chinese companies active in the region have gauged the importance of specific big-ticket projects to the governments they are soliciting and the role that Chinese investments could play for incumbents who must face the voters. Project completion is often timed to coincide with upcoming elections, offering parties in power an achievement to showcase, thereby increasing their chances of greenlighting a proposed Chinese project in the first place.

Este enfoque proactivo le ha valido a China mucha buena voluntad y confianza.67° Si las propuestas no funcionan o si no ganan la aprobación de un gobierno, las empresas chinas intentan mantener un perfil bajo en lugar de abandonar el país. En Maldivas, por ejemplo, una vez que los contratistas chinos encontraron restringido su acceso después del cambio de gobierno de Yameen a Solih, ofrecieron períodos de responsabilidad extendidos en los proyectos terminados para garantizar el acceso continuo.275 En Sri Lanka, los contratistas chinos se mantuvieron a través de años de controversia y mala prensa sobre los proyectos, ganando buena voluntad como socios confiables.276

En los casos en que los actores chinos no pueden identificar inmediatamente nuevas oportunidades de colaboración, ofrecen mejorar las colaboraciones existentes del país anfitrión con terceros países. En Nepal, por ejemplo, las incursiones de China como socio de desarrollo a menudo implicaban ofrecer versiones más grandes de proyectos en los que india ya estaba trabajando, prometiendo completarlos más rápido de lo que India podría y a un costo menor.277

Este modelo parece estar haciendo su camino desde Nepal a otros países, como Bangladesh.278 En los últimos meses, China ha tratado de establecer una red de colaboración en varios países para hacer frente a la COVID-19. Y una vez que el fondo de emergencia voluntario COVID-19 propuesto por India no pudo despegar en el sur de Asia, el ministro de Relaciones Exteriores Wang Yi se reunió con sus homólogos de Afganistán, Bangladesh, Nepal, Pakistán y Sri Lanka para discutir vías de cooperación similares al esfuerzo indio, expandiendo la mitigación de la pandemia para incluir la cooperación económica y el desarrollo regional como medios de recuperación.279

Las herramientas de influencia de China son cada vez más diversas.

China emplea un repertorio de medios para ejercer influencia, pero la forma en que se aprovechan depende del alcance de su compromiso en un país, de la solidez de las instituciones de ese país y de las relaciones personales de China con actores clave del régimen. Estos medios ahora incluyen el castigo coercitivo para disuadir ciertas acciones que se perciben como contrarios a los intereses chinos o para obligar al cumplimiento. China también sigue utilizando herramientas de persuasión e incentivos positivos.

Las amenazas coercitivas se han utilizado como herramientas de influencia negativa de varias maneras, incluidas las amenazas en el horizonte que llevan a los actores locales a autocensurarse. Por ejemplo, en febrero de 2020, cuando un periódico nepalí publicó un artículo sobre el secreto que rodea los orígenes del coronavirus, la embajada nepalí en China se adelantó a las críticas al publicar una declaración amenazante, pidiendo a los periódicos nepalíes que evitaran posturas que pudieran afectar negativamente las relaciones entre los dos países.280 En el caso, la amenaza no pudo producir el resultado deseado. Los editores nepalíes se negaron a dar marcha atrás, recordando a la embajada que la única forma de proteger la libertad de prensa garantizada por la Constitución es ejercerla.281 Pero tal reacción puede producir amenazas más directas de China. Un artículo similar en un periódico de Sri Lanka llevó a la embajada china a solicitar al gobierno que le pidiera al periódico que se retractara.282

En otros lugares, China ha tratado de evitar la mala prensa a través de insípidos e incentivos, incluida la compra de anuncios, la oferta de colaboración para un medio de comunicación con la embajada, la disponibilidad de oportunidades de trabajo en China para los periodistas locales u ofreciendo becas en China. En Bangladesh, la embajada china publica regularmente anuncios de página completa en los diarios locales, y los funcionarios de la embajada, incluido el embajador, han visitado las salas de redacción y han participado en discusiones moderadas con el personal para construir relaciones positivas que puedan producir una cobertura positiva.283°

China uses cultural programs in similar ways, directly connecting with people to spread its influence. In Sri Lanka, this has been done by promoting connections around Buddhism—with CHEC helping to construct an international Buddhist university. Through the port city project, the company has also donated books on Confucian thought to this university.284 Cultural connections have proved to be useful tools of positive influence in Nepal as well, as demonstrated by China’s minister of press and media visiting culturally significant sites at Lumbini and Tilaurakot, and participating in the 2,640th Buddha Jayanti program organized by the Jonghua Gumba of China at the Mayadevi temple in Lumbini in 2016.285

When incentives fail to convince, threats can be used in pursuit of Chinese interests. In Maldives, for example, reports suggest that during negotiations over the FTA in 2017, the Chinese embassy tied all future financial assistance to its signing.286 Similarly, in Bangladesh, China’s state-owned Sinohydro Corporation tied the completion of the Dhaka-Chittagong highway expansion project to the signing of a new contract on management of the river waters near the Padma Multipurpose Bridge project.287 Carrots and sticks are sometimes wielded by proxy. For example, when U.S. Secretary of State Mike Pompeo complained publicly about Sri Lanka’s deepening relationship with China during his visit in October 2020, the Sri Lanka-China Friendship Association responded with strongly worded statements calling out what it considered “misinformation” and U.S. “imperialism.”288 In Bangladesh, stakeholders tell of cases in which government officials have informally offered advice about how to write stories about “friendly neighbors.”289 As an interviewee points out, while some lower-circulation newspapers report on disagreements between Chinese contractors and their local employees, the mainstream media seldom covers this topic.290

There is no “debt trap” in the four countries.

The greater exposure of some countries to Chinese loans has contributed to the narrative that China practices “debt-trap diplomacy.” According to this view, China offers easy money to fund infrastructure projects that eventually are found to be unviable. This allows the lending Chinese entity to gain a foothold and even seize the asset by converting debt to equity or dictating new terms.

However, this narrative can be questioned. For example, the Chinese share of Sri Lanka’s debt is vastly exaggerated: one study from March 2020 put it at just 6 percent of GDP, with more owed to other creditors.291 The fact is that Sri Lanka has a foreign debt problem and needs better debt management. As one member of the Sirisena government claimed in 2016, soon after it came to power, the country had to borrow from China because no one else would lend to it anymore.292

Of the other three countries, only Maldives has considerable exposure to Chinese commercial loans. Nepal and Bangladesh have been careful in choosing their funders and methods of financing to ensure less dependence on Chinese money. While Bangladesh tries for soft loans over commercial loans, Nepal prefers grants over soft loans.

TABLE: TYPES OF CHINESE ASSISTANCE TO NEPAL BETWEEN 2013–14 AND 2019–20 (IN MILLIONS OF U.S. DOLLARS)
Year/TypesGrantsLoansTechnical AssistanceTotal
2013/14----
2014/1528.89.2038.0
2015/1627.18.10.135.3
2016/1741.20041.2
2017/1836.418.53.858.7
2018/19106.044.40150.4
2019/2033.0060.093.0
Source: “Development Cooperation Report Fiscal Year 2014/15,” “Development Cooperation Report Fiscal Year 2015/16,” “Development Cooperation Report Fiscal Year 2016/17,” “Development Cooperation Report 2018,” “Development Cooperation Report 2019,” and “Development Cooperation Report Fiscal Year 2019/20,” Nepal’s Ministry of Finance, accessed July, 2021, https://mof.gov.np/site/publication-category/65.

When China reached out to the Prime Minister’s Office in Bangladesh in 2015 offering to finance ten major infrastructure projects, the government decided to evaluate the offer against those from other development partners like Japan and India.293 Similarly, Nepal has turned to the World Bank multiple times for COVID relief. First, it accepted $104 million under the COVID-19 Emergency Response and Health Systems Preparedness Project.294 Then, it borrowed $800 million for various infrastructure and urban renewal projects between April and November 2020 for post-pandemic economic recovery.295 While Nepal has accepted China’s help in the form of testing kits, medical equipment, and vaccines, it has not looked to it for financial assistance to cope with difficulties associated with the pandemic. According to one interviewee, borrowing from the World Bank made far more sense because of more favorable interest rates. Nepal has also had other options, including soft loans, concessional loans, and development grants from traditional agencies such as the World Bank and the ADB, and other bilateral partners such as the United Kingdom, the United States, or India.296

Countries are learning from each other and changing how they exercise agency as a result.

Perhaps the most important conclusion of this study is that none of the four countries is an island anymore when it comes to dealing with China. Workshop participants and interviewees in all of them made it clear that stakeholders are acutely aware of the perils of overdependence on China and are eager to avoid that prospect. Many brought up the experience of other countries when discussing their own country’s engagement with Beijing. In particular, Sri Lanka’s initial struggles to make the MRIA and the Hambantota Port viable, and the subsequent investment by Chinese SOEs in Hambantota, were brought up often by actors from the other three countries. Clearly, Sri Lanka’s experience has become a significant reference point.

Despite common misperceptions, the four countries do exercise agency and ultimately determine the terms of their relationships with China. They have rejected specific projects found to be untenable. In Bangladesh, the cancellation of the Sonadia deep-sea port in 2020 after China changed the terms of funding from a soft loan to a commercial loan is a case in point.297 Instead, Bangladesh is proceeding with the construction of a deep-sea port at Matarbari, about twenty-five kilometers from Sonadia. According to the government, the new project is funded by a loan of $3.7 billion from Japan at an interest rate of 0.1 percent over thirty years with an initial ten-year grace period.298 Earlier this year, the Prime Minister’s Office stepped in to slash the budget of two crucial rail line projects being built with Chinese loans after they were found to be too high. The embassy in Dhaka has said that China is pulling out of the project.299

Bangladesh is not alone in canceling projects. The Nepal Electricity Authority terminated a contract for the first section of the Upper Tamakoshi-Kathmandu transmission line after the contractor, Guangxi Transmission and Substation Construction, finished only 8 percent of the work within the stipulated time.300 Subsequently, in a meeting with China’s ambassador, the energy minister questioned the performance of Chinese companies in the country, asking for different and more efficient Chinese companies working elsewhere in the world to be given responsibility for projects instead.301

The four countries display assertiveness and determination in the other aspects of their engagement with China as well. For instance, even as political engagement between the CCP and political parties in Sri Lanka is on the rise, some actors prefer to stay away, ideological affinity notwithstanding. The Janatha Vimukthi Peramuna, the country’s principal communist party, did not participate in a commemorative event in June 2021 to celebrate the CCP’s centenary. It has been opposed to the terms agreed by the Rajapaksa government for guiding the operation of the Colombo Port City, arguing that under the current terms, the port city will be “another province of China.”302

It is the governments of the four countries that have pulled China closer in many instances for what they see as clear benefits. Ties to China can provide domestic political advantage ahead of elections, put the opposition on its heels, and deliver public works and other benefits to constituents. Hambantota Port, built in Mahinda Rajapaksa’s constituency, started operations just in time for the former president’s sixty-fifth birthday.303 Similarly, a China-funded industrial park in former prime minister Oli’s constituency has been in the news in Nepal since protests broke out over money given as compensation for land.304 Generally speaking, China has not imposed tough governance-related conditionality on projects, making them even more attractive to politicians who want to deliver quick wins. These projects lack best practices for rehabilitating displaced persons and the environment, and even more so, demands related to human rights or electoral practices.305

China and its partners are still having teething trouble—for now.

China is a relatively new entrant in South Asia, and it is still in the process of familiarizing itself with the institutions and organizational cultures of the four countries. As a stakeholder notes, China does not know their “system, language, or culture” especially well.306 Likewise, these countries have only recently begun deepening their engagement with China and are still learning how it thinks and functions. This accounts for the gap in their understanding and communication of their respective needs and priorities.

One case in point is the incident involving the Chinese ambassador to Bangladesh commenting negatively on the possibility of the country joining the Quad. The very next day, the ambassador and the Bangladeshi foreign minister were photographed at an event celebrating Beijing’s gift of 500,000 doses of Sinopharm COVID-19 vaccines.307 As in any engagement, there are bound to be missteps on both sides, but, considering the importance of the region to China and the importance of China to the developmental journey of the four countries, the two sides will learn to overlook these and work together.

India is still a more significant strategic player than China.

India continues to be the state with the most influence on the choices, interests, and conduct of the four countries, even though the balance is gradually shifting toward China. India is more than just a hugely significant trading partner for most of these countries and one of their top sources of FDI.308 It also wields historical and social connections, and, above all, it is deeply entrenched in their domestic politics in ways that China simply is not. Various political actors have benefited from official and unofficial Indian support at various times. Moreover, the Indian military is the biggest in the region and is operationally active across it. This has been useful for some of these countries—for Maldives to prevent a coup in 1987, and for Bangladesh to establish itself as an independent nation in 1971.

All of these factors taken together suggest limitations to how deeply entrenched China can become in the region. For example, India’s objections have prevented Beijing from developing close operational security relations with the four states. However, India’s close presence in their social, political, and economic life also leaves it open to heightened levels of criticism, including allegations of meddling. Recent examples include a turning of popular sentiment against India after its 2015 economic blockade of Nepal, or Mahinda Rajapaksa accusing India’s external intelligence agency of being responsible for his election defeat in 2015.309

RECOMMENDATIONS FOR THE UNITED STATES AND ITS STRATEGIC PARTNERS

Consistency is the key to China’s regional engagement; it should be key to the United States’ as well.310

Steady engagement from the United States and its strategic partners is still very much desired by all four of the states surveyed. This includes Sri Lanka, whose local elites are the most predisposed toward engagement with China. As a key adviser to Mahinda Rajapaksa said at the time of the elections in 2019: “The thinking was, if we upset China, the West would come to us with endless bags of gold. . . But the bags of gold never materialized.”311 The solution to this problem is to meet the China challenge by assuring a consistent U.S. presence and long-term policy for the region. In the experience of these states, Western engagement has been piecemeal and fleeting, often dependent on the personalities working on the region in Washington and in the U.S. embassies. Stakeholders looked hopefully to the Biden administration and expressed a desire for arrangements like the Quad to yield greater engagement with South Asia. The decision at the first Quad summit to focus on vaccines, emerging technologies, and climate—three areas where China has made a big play to support South Asia—is useful in this regard.312

Stakeholders also argued that the United States could compete with China through nongovernmental means. In some instances, nonofficial channels were actually preferred, as these could enhance the U.S. role in the region while sparing local governments from having to appear to be choosing Washington’s side “against” Beijing. Some called for Americans, on a private basis, to launch more workshops to discuss China’s role in the region. These could also help with cross-national learning: in this project, for instance, workshop participants frequently asked questions of each other and shared experiences.

Chinese projects focus on what the four states are perceived to need; so should U.S. engagement.

One of the critical factors enabling China to escalate its engagement with so many South Asian countries at once is its willingness to make frequent offers and proposals but then also listen carefully to what its partners want. Connectivity and infrastructure projects are at the top of the wish list for all South Asian states and have become a key area of cooperation. To increase their profile in the region in the face of Chinese projects finance and investments, the United States and its partners must pay attention to what the countries are asking for. The Build Back Better World initiative, instigated by the United States and announced at the June 2021 meeting of G7 leaders, is a productive step in this direction.313 In conjunction with the Blue Dot Network, it has the potential to offer the kind of engagement these states have told China that they need.314 However in doing so, the United States must engage consistently across the spectrum of political parties and stakeholders. Workshop participants from Sri Lanka and Nepal, for example, attributed the failure of the U.S. MCC’s compact in the first case and the lack of political traction in the second to the absence of such a multi-stakeholder U.S. approach.315

The United States can also enhance its influence by helping the countries to improve their capacity vis-à-vis China. For instance, the United States can help provide technical assistance for managing debt. This does not have to mean formal debt relief, as envisaged in multilateral programs like the Multilateral Debt Relief Initiative. Instead, the United States can offer to assist the countries both before and after they agree to take Chinese loans.

In practice, this will mean helping states like Sri Lanka and Maldives not only to manage and restructure their overall foreign debt but also to become stronger negotiators by assisting them in developing terms and conditions that will strengthen their bargaining power in negotiations with Chinese actors. Stakeholders often mentioned how their bureaucracies can be inexperienced or lack the capacity to handle complex financial instruments, so China has wielded influence by offering to help them to handle the backend in a deal.316 However, this has resulted in private loans with sovereign guarantees, or sometimes agreements where conditions are unfavorable for the borrowing country. The United States can offer to train and build capacity that will prevent such outcomes in the future.

Finally, South Asian countries are on their way to attaining middle-income status. Sri Lanka has already transitioned to being a lower middle-income country and Bangladesh is projected to reach it by the end of 2021, years ahead of its 2026 target.317 This will make them ineligible to receive much concessional assistance, likely drawing them even closer to China for loans. Bangladesh and China have started discussions on a free trade agreement, and the commerce minister of Bangladesh has claimed that such a deal “will help Bangladesh face the challenges of LDC graduation.”318 The United States could use its influence in Western multilateral organizations to ease the transition and help these states develop alternative avenues for development assistance.

De-hyphenate U.S. engagement in the region from the Chinese question.

During the George W. Bush administration, the United States said that it was de-hyphenating its relationships with India and Pakistan. It is time to take a page from this playbook and de-hyphenate U.S. engagement with South Asia from the question of China. Stakeholders argued that a significant section of decisionmakers in their countries disliked what they perceive to be demands that make U.S. assistance conditional upon the countries reducing their exposure to China. That is unlikely to happen for several reasons.

As small countries, it is unlikely that Bangladesh, Maldives, Nepal, or Sri Lanka can afford to explicitly choose among relationships with bigger powers. Additionally, it is rarely an optimal strategy for a small country to go “all in” with just one major power, leaving themselves inside a bloc and reducing their options and opportunities.319 Not surprisingly, some of these states have played India and China off each other to extract the best deals to finance their development needs. That same tactic will likely occur if the United States enters the fray “against China.” Geopolitics can also lead the countries to make complex adjustments in their strategic calculus.320 Communicating a positive agenda, not just a negative one, will win greater favor among governments, businesses, and the public.

Acknowledge domestic drivers and build capacity to reduce space for China.

China’s ostensible policy of noninterference is one of its calling cards in South Asia. “China has never sought to influence the domestic politics of Sri Lanka,” claims one highly regarded former foreign minister of Sri Lanka.321 For countries that must deal with domestic fissures along multiple social, ethnic, and religious lines, that putative Chinese approach of noninterference is comfortable. As the United States aims to partner with these countries, it is faced with two equally bad options—to ask tough questions about internal governance and risk “losing” opportunities to China or to avoid these questions and allow governance challenges to deepen. Traditional multilateral organizations such as the ADB and the World Bank, whose funding is contingent on governance conditions, face the same issue.

One effective way to deal with this problem may lie in strengthening civil society and building capacity in these countries as a U.S. priority. China does not do nearly as much of this as the United States, preferring instead to focus on hard infrastructure. But all four states in this study have media outlets and civil society organizations that have been focusing on questions of good governance—from their regimes’ human-rights records to opacity in Chinese contracting practices. These groups are more effective in Sri Lanka and Nepal than in Bangladesh or Maldives. The United States can identify and equip them with grants and training to enable them and their audiences to ask tough questions and ask for transparency. Over time, capacity building could lead more stakeholders in these countries to see the dangers of opaque deals and ignoring environmental and other concerns. They would demand that their government partner only with those committed to international best practices in sustainability and accountability, which will raise the pressure on China and create new opportunities for the United States and its partners.

Finally, China leans heavily on project finance and direct investment because it is a relative newcomer to giving development assistance.322 Most Chinese projects in the four countries are undertaken by arms of various Chinese SOEs, which have been set up to concentrate exclusively on particular regions, not by the China International Development Cooperation Agency or its proxies. When Chinese companies give grants that have the flavor of development assistance, the miscommunication, delays, and failure to meet agreed terms can often be attributed to their unfamiliarity with this role. Through enhanced capacity building, the United States and its partners can ensure that stakeholders in these countries increasingly ask questions of Chinese actors when they fail to live up to their promises.

LIST OF ABBREVIATIONS

ADBAsian Development Bank
AIIBAsian Infrastructure Investment Bank
ALITAerospace Long-March International Trade Company
APSCLAshuganj Power Station Company Limited
AVIC-EngChina National Aero-Technology International Engineering Corporation
B3WBuild Back Better World
BDTBangladeshi Takas
BGMEABangladesh Garment Manufacturers and Exporters Association
BIADBeijing Institute of Architectural Design Group Co. Ltd.
BNPBangladesh National Party
BPCButwal Power Company Limited
BRIBelt and Road Initiative
BUCGBeijing Urban Construction Group Co. Ltd.
B2BBusiness to Business
CAANCivil Aviation Authority of Nepal
CAMCEChina CAMC Engineering Co. Ltd.
CCCCChina Communications Construction Company Ltd.
CCDIChina Construction Design International
CCPChinese Communist Party
CDBChina Development Bank
CEBCeylon Electricity Board
CEECChina Energy Engineering Corporation
CEYPETCOCeylon Petroleum Corporation
CGCChina Geo-Engineering Corporation
CGGCChina Gezhouba Group Corporation
CGSChina Geological Survey
CHECChina Harbour Engineering Company Limited
ChinaEximbank Export-Import Bank of China
CICIRChinese Institute of Contemporary International Relations
CIDCAChina International Development Cooperation Agency
CMCChina National Machinery Import and Export Corporation
CMECChina Machinery Engineering Corporation
CMPortChina Merchants Port Holdings Company Limited
CNTICChina National Technical Import and Export Corporation
COMPLANTChina National Complete Plant Import and Export Corporation Limited
COVECChina Overseas Engineering Group Co Ltd.
CPCECColombo Port City Economic Commission
CPNUML Communist Party of Nepal
CPPCCChinese People’s Political Consultative Conference
CRECChina Railway Group Limited
CREECChina Railway Eryuan Engineering Group Co. Ltd.
CRIChina Radio International
CR5China Railway No. 5 Engineering Group
CR15GChina Railway 15th Bureau Group Corporation
CSCECChina State Construction Engineering Corporation
CSOCivil Society Organization
CSOSICivil Society Organization Sustainability Index
CTGChina Telecom Global Limited
CUECChina National Electric Import & Export Corporation
CWEChina International Water & Electric Corporation
DCCIDhaka Chamber of Commerce and Industry
DECDongfang Electric Corporation
EIAEnvironmental Impact Assessment
FDIForeign Direct Investment
FTAFree Trade Agreement
GDPGross Domestic Product
GHCBGuangxi Hydroelectric Construction Bureau
G2GGovernment to Government
HADRHumanitarian Assistance and Disaster Relief
HNCEGHunan Construction Engineering Group
HIDCLHydroelectricity Investment and Development Company Limited
HIPGHambantota Port International Group
ICTInformation and Communication Technology
IDAInternational Development Association
IORIndian Ocean Region
JCTECJoint Committee on Trade and Economic Cooperation (Maldives)
JTEGJiangsu Provincial Transport Engineering Group
JVPJanatha Vimukthi Peramuna
JWGJoint Working Group
KDAWKDA Weerasinghe & Co. Pvt Ltd.
LDCLeast Developed Country
LKRLankan Rupees
LTTELiberation Tigers of Tamil Eelam
MBCMaldives Broadcasting Commission
MBECChina Major Bridge Engineering Company Ltd.
MCCMillennium Challenge Corporation
MCC GroupThe Metallurgical Corporation of China
MCTCOMaldives China Trade and Cultural Organisation
MDPMaldivian Democratic Party
MDRIMultilateral Debt Relief Initiative
MMCMaldives Media Council
MoUMemorandum of Understanding
MRIAMattala Rajapaksa International Airport
MVRMaldivian Rufiyaa
MWSDBMelamchi Water Supply Development Board
NEANepal Electricity Authority
NGONongovernmental Organization
NHLNyadi Hydropower Limited
NOCNepal Oil Corporation Limited
NPRNepali Rupees
NTNepal Telecom
ODAOverseas Development Assistance
PCRPowerChina Resources Limited
PMBPPadma Multipurpose Bridge Project
POWERCHINAPower Construction Corporation of China
PPMProgressive Party of the Maldives
PRCPeople’s Republic of China
RAWResearch and Analysis Wing
RSFReporters Sans Frontières / Reporters Without Borders
SAARCSouth Asian Association for Regional Cooperation
SMEDRICSouthwest Municipal Engineering Design and Research Institute of China
SEZSpecial Economic Zone
SGCGBeijing Shougang Construction Group
SIPRIStockholm International Peace Research Institute
SLCFASri Lanka-China Friendship Association
SLCHBCSri Lanka-China Business Council
SLCJFSri Lanka-China Journalists Forum
SOEState-Owned Enterprise
STELCOState Electric Company Limited (Maldives)
TARTibet Autonomous Region
UFWDUnited Front Work Department
UNUnited Nations
UNHRCUnited Nations Human Rights Council
UPFAUnited People’s Freedom Alliance
USAIDUnited States Agency for International Development
USDU.S. Dollars
WBWorld Bank
WECWEC Engineers and Constructors Private Ltd.

ABOUT THE AUTHOR

Deep Pal is a visiting fellow in the Asia Program at the Carnegie Endowment for International Peace. His research and publications focus on the Indo-Pacific, India’s foreign policy in its immediate and greater neighborhood, and regional security in South Asia, with particular emphasis on China. He has worked with the National Bureau of Asian Research, and the Center for Strategic and International Studies in Washington, DC, and has a decade’s experience as a journalist in India. His research has been published in China Brief, the Hindustan Times, Foreign Policy, and the Wire, among others.

ACKNOWLEDGMENTS

The author would like to thank Thomas Carothers, Evan Feigenbaum, Rudra Chaudhuri, and Erik Brattberg for helpful feedback on earlier drafts and phases of research, and to Alexander Taylor and Liming Lin for research assistance and support. The author also acknowledges the substantial contributions provided by Saheb Singh Chadha in finalizing this report. Last but by no means least, thanks are due to Jocelyn Soly for her patience and her work on the graphics for this paper, and to Samuel Brase for his meticulous attention toward making the paper error-free. Funding for this project was provided by a grant from the U.S. State Department.

NOTES

1 UNB Dhaka, “Relations With China Will Be Damaged If Bangladesh Joins US-Led ‘Quad’: Envoy,” Daily Star, May 10, 2021, https://www.thedailystar.net/bangladesh/news/relations-china-will-be-damaged-if-bangladesh-joins-us-led-quad-envoy-2091345.

2 “China Has Crossed the Line When Talking About Quad: Foreign Minister,” Prothom Alo English, May 11, 2021, https://en.prothomalo.com/bangladesh/government/china-has-crossed-the-line-when-talking-about-quad-foreign-minister.

3 See Appendix 1: China–South Asia Bilateral High-Level Visits.

4 This study is distinct in its comparative approach to the China–South Asia relationship, which has been the subject of rigorous analysis, albeit often from the perspective of one country at a time, or limited to particular aspects such as the impact of the BRI or increasing Chinese national power. These include—monographs: Amish Raj Mulmi, All Roads Lead North: Nepal’s Turn to China (Context, 2021); Asanga Abeyagoonasekera, Conundrum of an Island: Sri Lanka’s Geopolitical Challenges (World Scientific Publishing, 2021). Recent reports and projects: Andrew Small, “Regional Dynamics and Strategic Concerns in South Asia: China’s Role,” Background Paper (Washington, DC: Centre for Strategic and International Studies, January 2014), https://csis-website-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/140127_Small_RegionalDynamics_China_Web.pdf; “A World Safe for the Party—China’s Authoritarian Influence and the Democratic Response” (International Republican Institute, February 2021), https://www.iri.org/sites/default/files/bridge-ii_fullreport-r7-021221.pdf; “China’s Influence on Conflict Dynamics in South Asia,” USIP Senior Study Group Final Report (Washington, DC: United States Institute of Peace, December 2020), https://www.usip.org/publications/2020/12/chinas-influence-conflict-dynamics-south-asia; Ganeshan Wignaraja et al., “Chinese Investment and the BRI in Sri Lanka” (Chatham House, March 2020), https://www.chathamhouse.org/sites/default/files/CHHJ8010-Sri-Lanka-RP-WEB-200324.pdf; Jeff M. Smith, “China and the Maldives: Lessons from the Indian Ocean’s New Battleground” (Asian Studies Center, Heritage Foundation, October 2020), https://www.heritage.org/sites/default/files/2020-10/BG3546.pdf; John Hurley, Scott Morris, and Gailyn Portelance, “Examining the Debt Implications of the Belt and Road Initiative From a Policy Perspective,” Policy Paper (Washington, DC: Center for Global Development, March 4, 2018), https://www.cgdev.org/publication/examining-debt-implications-belt-and-road-initiative-a-policy-perspective; Katharine Adeney and Filippo Boni, “How China and Pakistan Negotiate,” China Local Global (Carnegie Endowment for International Peace, May 24, 2021), https://carnegieendowment.org/2021/05/24/how-china-and-pakistan-negotiate-pub-84592; “Mapping the Belt and Road Initiative: Reach, Implications, Consequences” (Observer Research Foundation, February 2021), https://www.orfonline.org/wp-content/uploads/2021/02/BRI-report-FINAL.pdf; Nadège Rolland et al., “Where the Belt Meets the Road: Security in a Contested South Asia,” Asia Policy 14, no. 2 (April 29, 2019): 1–41; “Navigating India-China Rivalry: Perspectives From South Asia,” South Asia Discussion Papers (Institute of South Asian Studies, National University of Singapore, September 2020), https://www.isas.nus.edu.sg/wp-content/uploads/2020/09/SADP-Navigating-India-China-Full-Final.pdf; Nilanthi Samaranayake, “China’s Engagement With Smaller South Asian Countries” (United States Institute of Peace, April 2019), https://www.usip.org/sites/default/files/2019-04/sr_446-chinas_engagement_with_smaller_south_asian_countries.pdf; Rupak Sapkota, “Nepal in the Belt and Road: New Vista on Building a China-India-Nepal Economic Corridor,” China International Studies 67 (November 2017): 105–21; “Sambandh: Regional Connectivity Initiative” (Centre for Social and Economic Progress), accessed June 11, 2021, https://csep.org/sambandh-initiative/; Galen Murton and Austin Lord, “Trans-Himalayan Power Corridors: Infrastructural Politics and China’s Belt and Road Initiative in Nepal,” Political Geography 77 (March 2020), https://doi.org/10.1016/j.polgeo.2019.102100.

5 Shubhajit Roy, “Gowher Rizvi: ‘(NRC) Internal Exercise, Why Should We Raise It?,’” Indian Express, March 26, 2021, https://indianexpress.com/article/india/bangladesh-foreign-affairs-advisor-gowher-rizvi-nrc-internal-exercise-why-should-we-raise-it-7245509/.

6 Following the mandate of the project, this paper specifically examines the recent inflection points in the PRC’s relations with Bangladesh, Nepal, and Sri Lanka. Then, it unpacks the three specific vulnerabilities as they are manifested in those countries. Considering the paucity of detailed studies on Maldives, and the data collected in the course of this project, Maldives continues to be a part of thematic and comparative analysis throughout the paper.

7 See Appendix 2: Chinese Assistance in Focus Countries.

8 “China Remains Largest Source of FDI for Nepal for 6 Consecutive Years,” Xinhua, July 21, 2021, http://www.xinhuanet.com/english/asiapacific/2021-07/21/c_1310075557.htm; Krishana Prasain, “Investment Pledges Plunge as Virus, Messy Politics Scare Away Investors,” Kathmandu Post, July 21, 2021, https://kathmandupost.com/money/2021/07/21/investment-pledges-plunge-as-virus-messy-politics-scare-away-investors.

9 Abhishek G Bhaya, “Chinese Envoy Encourages Nepal Tourism in Stunning Social Media Post,” CGTN, January 7, 2020, https://news.cgtn.com/news/2020-01-07/Chinese-envoy-encourages-Nepal-tourism-in-stunning-social-media-post-N3u86QqAx2/index.html.

10 Virtual interview with stakeholder 3A on Maldives, February 2021.

11 Sabitri Dhakal, “Mandarin Made Mandatory in Many Schools,” Himalayan Times, June 15, 2019, https://thehimalayantimes.com/nepal/mandarin-made-mandatory-in-many-schools.

12 “Communist Parties of China and Nepal Hold High-Level Workshop on Party Governance and State Administration Experience,” International Department Central Committee of CPC, June 19, 2020, https://www.idcpc.gov.cn/english/news/202006/t20200628_139118.html; “Communist Party of China and SLPP Hold Virtual Advanced Seminar on Governance,” Daily FT, November 6, 2020, http://www.ft.lk/news/Communist-Party-of-China-and-SLPP-hold-virtual-advanced-seminar-on-governance/56-708551.

13 Fazlur Rahman Raju, “Awami League, Communist Party of China Ink MoU,” Dhaka Tribune, March 22, 2019, https://www.dhakatribune.com/bangladesh/foreign-affairs/2019/03/22/awami-league-communist-party-of-china-ink-mou.

14 See Appendix 3: China’s COVID-19 Diplomacy in Focus Countries.

15 Bangladesh declined an offer for Sinovac vaccines in exchange for co-funding $7 billion late-stage trials for the vaccines. See more here: Ruma Paul, “Bangladesh Will Not Co-Fund Sinovac’s Vaccine Trial, Health Minister Says,” Reuters, October 13, 2020, https://www.reuters.com/article/health-coronavirus-bangladesh-china-idUSKBN26Y265.

16 Deep Pal and Rahul Bhatia, “The BRI in Post-Coronavirus South Asia” (Carnegie India, May 26, 2020), https://carnegieindia.org/2020/05/26/bri-in-post-coronavirus-south-asia-pub-81814.

17 Pieter D. Wezeman, Alexandra Kuimova, and Siemon T. Wezeman, “Trends in International Arms Transfers, 2020,” SIPRI Fact Sheet (Stockholm International Peace Research Institute, March 2021), https://sipri.org/sites/default/files/2021-03/fs_2103_at_2020.pdf.

18 “১৫০০০ কোটি টাকার অস্ত্র-সরঞ্জাম ক্রয়” (Purchase of Arms and Equipments Worth Tk 15,000 Crore), Prothom Alo, August 24, 2013.

19 “১৫০০ কোটি টাকায় দুটি সাবমেরিন আসছে” (Two Submarines Are Coming at the Cost Tk 1500 Crore), Prothom Alo, September 20, 2014; “নৌবাহিনী প্রধান চীন গেছেন” (Navy Chief Has Gone to China), Bangladesh Pratidin, November 14, 2016.

20 Virtual interview with stakeholder 1E on Bangladesh, April 2021.

21 “রোহিঙ্গ্যা ফেরাতে ভূমিকা রাখবে চীন- চীনের জননিরাপত্তা বিষয়ক মন্ত্রী” (China Will Play Its Role in Returning Rohingya - Chinese Public Security Minister), Bangladesh Pratidin, October 27, 2018, https://www.ebdpratidin.com/arc/archive/2018-10-27.

22 “Country/Commodity Wise Export Receipts,” Bangladesh Bank, accessed August 9, 2021, https://www.bb.org.bd/econdata/export/exp_rcpt_country_commodity.php.

23 Rezaul Karim, “Bangladesh to Seek Relaxed China Rules for Increasing Exports,” Financial Express, November 17, 2020, https://www.thefinancialexpress.com.bd/economy/bangladesh-to-seek-relaxed-china-rules-for-increasing-exports-1605585295.

24 Virtual interview with stakeholder 1A on Bangladesh, February 2021.

25 Virtual interview with stakeholder 1B on Bangladesh, February 2021.

26 “$1.54 Billion Released for 7 Projects,” New Age, August 25, 2020, https://www.newagebd.net/article/114444/154-billion-released-for-7-projects; “নতুন ইতিহাসে বাংলাদেশ-চীন” (Bangladesh-China in a New History), Bangladesh Pratidin, October 15, 2016.

27 “চীনা ইকোনমিক এন্ড ইন্ডাস্ট্রিয়াল জোন বদলে দেবে চট্টগ্রাম” (Chinese Economic and Industrial Zone Will Change Chittagong), Bangladesh Pratidin, March 30, 2017, https://www.ebdpratidin.com/arc/pre_page/2017-03-30/12.

28 Virtual interview with stakeholder 1A on Bangladesh, February 2021.

29 Virtual interview with stakeholder 1B on Bangladesh, February 2021.

30 “Payra Power Plant Coal-Fired Bangladesh 1,320MW,” NS Energy, accessed August 9, 2021, https://www.nsenergybusiness.com/projects/payra-power-plant/.

31 Mushfiqur Rahman, “Energy & Power Magazine,” Energy & Power Magazine, February 5, 2021, https://ep-bd.com/view/details/article/NTc2Mw%3D%3D/title?q=Payra+Coal+Fired+Power+Plant%3A++Delivering+Power+at+Competitive+Price+with+Environment+Care.

32 Kamran Reza Chowdhury, “China to Play Important Role in Bangladesh’s First ‘Smart City,’” Benar News, November 27, 2019, https://www.benarnews.org/english/news/bengali/Chinese-smart-city-11272019164842.html; “Bangladesh Chittagong China Economic Industrial Park Project - Details on ZAWYA MENA Edition,” ZAWYA.com, accessed August 9, 2021, https://www.zawya.com/mena/en/project/050619033931/bangladesh-chittagong-china-economic-industrial-park-project/.

33 “মূল কাজটি পেল চীনা কোম্পানি” (A Chinese Company Got the Main Job), Prothom Alo, May 23, 2014.

34 “China’s Lending to Bangladesh Surges,” Financial Express, January 30, 2021, https://www.thefinancialexpress.com.bd/economy/chinas-lending-to-bangladesh-surges-1611975747.

35 “শেয়ারবাজারের অংশীদার হলো চীনা জোট” (China Consortium Becomes a Stakeholder in the Sharemarket), Bangladesh Pratidin, May 4, 2018, https://www.ebdpratidin.com/arc/pre_page/2018-05-04/12; virtual interview with stakeholder 1A on Bangladesh, February 2021.

36 Virtual interview with stakeholder 1B on Bangladesh, February 2021; Ahsan Habib, “3yrs Into Chinese Partnership: DSE Yet to See Notable Tech Advancement,” Daily Star, February 24, 2021, https://www.thedailystar.net/business/news/dse-yet-see-notable-tech-advancement-2050145.

37 “চিনকে কাছের বন্ধু বললেন আশরাফ” (Ashraf Called China a Close Friend), Prothom Alo, June 16, 2015.

38 “Xi Jinping Meets With Chairperson of Bangladesh Nationalist Party Khaleda Zia,” Ministry of Foreign Affairs of the People’s Republic of China, October 14, 2016, https://www.fmprc.gov.cn/mfa_eng/topics_665678/XJPDJPZMJLGJXGSFWBCXZYDGAJXDJZGJLDRDBCHW/t1406620.shtml.

39 “চিনে ফখরুল,যাচ্ছে আওয়ামী লীগের প্রতিনিধি দলও” (Fakhrul in China, Representative of Awami League Will Also Be There), Bangladesh Pratidin, November 30, 2017, https://www.ebdpratidin.com/arc/archive/2017-11-30; “চীন সফরে আওয়ামী লীগের ১৬ সদস্যের প্রতিনিধি দল” (16 Members Awami League Team Visit China), Bangladesh Pratidin, October 29, 2018, https://www.ebdpratidin.com/arc/pre_page/2018-10-29/3.

40 Virtual interview with stakeholder 1C on Bangladesh, March 2021.

41“৪৫০ কোটি ডলার বিনিয়োগ আসবে” ($450 Crore Investment Is Coming), Prothom Alo, October 2, 2015.

42 “সুষ্ঠ নির্বাচনে সক্ষম হবে বাংলাদেশ” (Fair Election Is Possible in Bangladesh), Bangladesh Pratidin, December 9, 2018.

43 Virtual interview with stakeholder 1A on Bangladesh, February 2021.

44 “কূটনৈতিক সম্পর্কের ৪০ বছর উদযাপনে সাংস্কৃতিক অনুষ্ঠান” (Cultural Function to Celebrate 40 Years of Diplomatic Relation), Bangladesh Pratidin, February 3, 2015.

45 “চিনের টাকায় পূর্বাচলে প্রদর্শনী কেন্দ্র চিন দিচ্ছে ৬৭৫ কোটি টাকা, চুক্তি সই” (Exhibition Centre in Purbachal With Chinese Money China Is Giving TK 675 Crore, Deal Signed), Prothom Alo, August 26, 2015.

46 Virtual interview with stakeholder 1B on Bangladesh, November 2020.

47 “150 BD Students Join Youth Camp in China,” Financial Express, September 4, 2018, https://www.thefinancialexpress.com.bd/education/150-bd-students-join-youth-camp-in-china-1536056021.

48 “চিনের স্বপ্নপূরনের চেষ্টা কখনো থেমে থাকেনি” (China Never Stopped Trying to Fulfil Its Dreams), Prothom Alo, May 26, 2015; “তরুণেরাই দুই দেশের মৈত্রির রাষ্ট্রদূত” (The Youth Are the Ambassadors of Friendship Between the Two Countries), Prothom Alo, May 27, 2015.

49 “China Harbour Celebrates Volunteers’ Day with Mirsarai School Students,” Financial Express, December 7, 2019, https://www.thefinancialexpress.com.bd/trade/china-harbour-celebrates-volunteers-day-with-mirsarai-school-students-1575701453.

50 “বন্দরে চীনের হাসপাতাল জাহাজ আর্ক পিস” (Chinese Hospital Ship, Ark Peace, at the Port), Prothom Alo, August 20, 2013.

51 “চিনের টাকায় পূর্বাচলে প্রদর্শনী কেন্দ্র চিন দিচ্ছে ৬৭৫ কোটি টাকা, চুক্তি সই” (Exhibition Center in Purbachal With Chinese Money China Is Giving TK 675 Crore, Deal Signed), Prothom Alo, August 26, 2015.

52 “Cultural Counselor Sun Yan Hands Over Anti-COVID-19 Medical Materials to Bangladesh Local Cultural and Art Organizations,” Embassy of the People’s Republic of China in the People’s Republic of Bangladesh, April 29, 2020, http://bd.china-embassy.org/eng/zmjw/t1774904.htm; “China Continued Providing Assistance to Bangladesh in the Fight Against COVID-19,” Embassy of the People’s Republic of China in the People’s Republic of Bangladesh, June 5, 2020, http://bd.china-embassy.org/eng/zmjw/t1786211.htm.

53 “Use of Ritonavir, Resochin, Ribavirin, Arbidol Can Be Effective: Chinese Experts,” Financial Express, June 14, 2020, https://www.thefinancialexpress.com.bd/health/use-of-ritonavir-resochin-ribavirin-arbidol-can-be-effective-chinese-experts-1592131775.

54 “ForeignMinister AK Abdul Momen Has Written a Letter to JackMa [sic], Thanking Him for Providing 30 Thousand Testing Reagents and 300 Thousand Masks to the Friendly People of Bangladesh in the Fight Against Covid-19,” Embassy of the People’s Republic of China in the People’s Republic of Bangladesh, April 29, 2020, http://bd.china-embassy.org/eng/zmjw/t1774900.htm.

55 “China-Backed AIIB Approves $250 Million Loan for Bangladesh’s COVID-19 Response,” Reuters, May 21, 2020, https://www.reuters.com/article/us-health-coronavirus-aiib-bangladesh-idINKBN22X08Z; “China-Backed AIIB Approves $100 Million Loan to Bangladesh to Fight Covid-19,” News18, August 28, 2020, https://www.news18.com/news/world/china-backed-aiib-approves-100-million-loan-to-bangladesh-to-fight-covid-19-2827205.html.

56 Moudud Ahmmed Sujan, “Chinese Vaccine Trial in Bangladesh: Sinovac Now Wants Co-Financing,” Daily Star, October 3, 2020, https://www.thedailystar.net/frontpage/news/chinese-vaccine-trial-bangladesh-sinovac-now-wants-co-financing-1971417.

57 “2 BAF Aircraft Leaving for China Tonight to Bring 6 Lakh Sinopharm Vaccines,” Daily Star, June 12, 2021, https://www.thedailystar.net/coronavirus-deadly-new-threat/news/2-baf-aircraft-leaving-china-tonight-bring-6-lakh-sinopharm-vaccines-2109521.

58 “Momen: Bangladesh Will Buy 15 Million Doses of Covid Vaccine From China,” Dhaka Tribune, May 25, 2021, https://www.dhakatribune.com/health/coronavirus/2021/05/25/covid-19-bangladesh-to-buy-15-million-doses-of-vaccine-from-china.

59 “রোহিঙ্গ্যা ইস্যুতে চীনের বিশেষ দূত ঢাকায়” (Chinese Special Envoy in Dhaka on Rohingya Issue), Bangladesh Pratidin, April 25, 2017, https://www.ebdpratidin.com/arc/archive/2017-04-25.

60 Kamal Uddin Ahmed, “Chinese Leadership Assures Hasina of Prompt Resolution of Rohingya Crisis,” Financial Express, July 6, 2019, https://www.thefinancialexpress.com.bd/views/chinese-leadership-assures-hasina-of-prompt-resolution-of-rohingya-crisis-1562423744.

61 Virtual interview with stakeholder 1C on Bangladesh, March 2021.

62 Virtual interview with stakeholder 6A on Nepal, March 2021.

63 “China May ‘Misuse MLAT Against Tibetan Refugees,’” Himalayan Times, October 15, 2019, https://thehimalayantimes.com/nepal/china-may-misuse-mlat-against-tibetan-refugees.

64 “चिनियाँ सामान भारतमा थन्किए” (Chinese Goods Left Stored in India), Kantipur, October 18, 2015, https://ekantipur.com/printedition/2015/10/18/20151018092000.html.

65 Rewati Sapkota and Roshan S. Nepal, “Nepal, China to Pen Transit Trade Pact Protocol During President’s Beijing Visit,” Himalayan Times, April 10, 2019, https://thehimalayantimes.com/business/nepal-china-to-pen-transit-trade-pact-protocol-during-presidents-beijing-visit.

66 “PM Oli Returns Home From China,” Himalayan Times, March 27, 2016, https://thehimalayantimes.com/kathmandu/kp-sharma-oli-returns-home-china.

67 Virtual interview with stakeholder 4A on Nepal, November 2020.

68 “चीनद्वारा राजनीतिक पार्टीको माध्यमबाट नेपाललाई चिकित्सा सामग्री उपलब्ध गराइने” (Medical Supplies Will Be Provided to Nepal by China Through Political Parties), CRI Online | नेपाली, May 27, 2021, http://nepal.cri.cn/20210527/74d25c82-af6f-c790-f834-c9db9fa3aa94.html.

69 Anil Giri, “In a Series of Meetings, Chinese Envoy Calls for Unity Among Ruling Party Members,” Kathmandu Post, May 2, 2020, https://kathmandupost.com/politics/2020/05/02/in-a-series-of-meetings-chinese-envoy-calls-for-unity-among-ruling-party-members.

70 “Chinese Delegation Led by Guo Yezhou Lands in Nepal,” Himalayan Times, December 28, 2020, https://thehimalayantimes.com/nepal/chinese-delegation-led-by-guo-yezhou-lands-in-nepal.

71 “PM Miffed at Delay in Tabling MCC Agreement,” Himalayan Times, April 15, 2021, https://thehimalayantimes.com/nepal/pm-miffed-at-delay-in-tabling-mcc-agreement.

72 “नेपालतिर नजिकिँदै चिनियाँ रेल” (Chinese Rail Nearing Nepal), Kantipur, July 30, 2014, https://ekantipur.com/printedition/2014/07/30/326419.html.

73 “चिनियाँ लगानी भित्रियो - ३६ अर्ब लगानीमा सिमेन्ट उद्योग” (Chinese Investment Entered - Cement Industry in NRs. 36 Billion Investment), Kantipur, May 25, 2016, https://ekantipur.com/business/2016/05/25/20160525170932.html; also see Appendix 8, specifically Chinese projects in Nepal.

74 “Statistics,” Department of Customs of Nepal, accessed June, 2021, https://www.customs.gov.np/, data is calculated based on exchange rates of each year’s value in Annual Report by Nepal Rastra Bank.

75 Rewati Sapkota, “China Proposes Joint Security Mechanism Along Border With Nepal,” Himalayan Times, December 26, 2017, https://thehimalayantimes.com/nepal/china-proposes-joint-security-mechanism-along-border-nepal.

76 “Agreements, MoUs Signed Between Nepal and China,” Himalayan Times, October 13, 2019, https://thehimalayantimes.com/kathmandu/agreements-and-mous-signed-between-nepal-and-china.

77 “कोरोनाविरुद्ध चिनियाँ मोडलको तयारी भइरहेको छ : मन्त्री भट्ट” (Chinese Model Being Prepared Against Corona: Minister Bhatta), Kantipur, March 22, 2020, https://ekantipur.com/news/2020/03/22/15848728304897392.html.

78 Saloni Murarka, “COVID-19: 800,000 Doses of Chinese Vaccine Arrive in Nepal,” WION, June 1, 2021, https://www.wionews.com/south-asia/covid-19-800000-doses-of-chinese-vaccine-arrive-in-nepal-388808.

79 “आयुर्वेदिक चिकित्सकलाई चिनियाँ तालिम” (Chinese Training for Ayurvedic Doctors), Kantipur, September 8, 2015, https://ekantipur.com/printedition/2015/09/08/20150908082902.html.

80 Krishna Acharya, “चिनियाँ राष्ट्रपति भ्रमण : पूर्वाधारका सम्झौता हुँदै” (Chinese President's Visit: Infrastructure Agreement Being Reached), Kantipur, October 11, 2019, https://ekantipur.com/news/2019/10/11/15707603355859643.html; Kriti Joshi, “Agreements, MoUs Signed Between Nepal and China,” Himalayan Times, October 13, 2019, https://thehimalayantimes.com/kathmandu/agreements-and-mous-signed-between-nepal-and-china.

81 See Appendix 4: Chinese Education Initiatives With Focus Countries.

82 Virtual interview with stakeholder 4B on Nepal, February 2021.

83 Chandrashekhar Adhikari, “चिनियाँ राष्ट्रपतिद्वारा नेपाल भ्रमणको वचनबद्धता” (Chinese President Commits to Visit Nepal), Kantipur, April 1, 2015, https://ekantipur.com/printedition/2015/04/01/343642.html.

84 “Over 100 Nepali Students to Study in China Under Government Scholarship,” Xinhua, August 28, 2019, http://www.xinhuanet.com/english/2019-08/28/c_138343188.htm.

85 See Appendix 5: Chinese Training Programs for Focus Countries.

86 “मिडियामा सहकार्य गर्ने चिनियाँ प्रतिबद्धता” (Chinese Commit to Cooperate in Media), Kantipur, December 29, 2014, https://ekantipur.com/printedition/2014/12/29/336760.html; “चिनियाँ पत्रकार भ्रमणमा” (Chinese Journalists on Visit), Kantipur, May 25, 2014, https://ekantipur.com/printedition/2014/05/25/321995.html.

87 “China Radio International Launches Confucius Class in Nepali Capital,” ChinaDaily, June 30, 2010, http://www.chinadaily.com.cn/china/2010-06/30/content_10042253.htm.

88 “चिनियाँ विदेशमन्त्री पनि आउँदै” (Chinese Foreign Minister Also Coming), Kantipur, December 19, 2014, https://ekantipur.com/news/2014/12/19/400543.html.

89 “चिनियाँ राष्ट्रपति आउने ‘निश्चित जस्तै’” (Chinese President Almost Certain to Come), Kantipur, August 10, 2016, https://ekantipur.com/printedition/2016/08/10/20160810105005.html.

90 “दक्षिण एसियाको ‘हव’ नै नेपाल : चिनियाँ प्राध्यापक” (South Asia's 'Hub' Nepal: Chinese Professor), Kantipur, April 27, 2017, https://ekantipur.com/news/2017/04/27/20170427202429.html.

91 Nirmal Shrestha, “६ कुकुरसहित चिनियाँ उद्वार टोली केहीबेरमा काठमाडौं अवतरण गर्दै” (Chinese Rescue Team Including 6 Dogs Landing in Kathmandu Shortly), Kantipur, April 26, 2015, https://ekantipur.com/other/2015/04/26/408007.html.

92 Rishiram Poudel, “सिन्धुपाल्चोकका गाउँमा चिनियाँ प्राविधिक” (Chinese Technicians in the Village of Sindhupalchowk), Kantipur, June 9, 2015, https://ekantipur.com/printedition/2015/06/09/348188.html.

93 Chandrashekhar Adhikari, “चिनियाँ विदेशमन्त्री टुँडिखेल पुग्दा...” (When the Chinese Foreign Minister Reached Tundikhel…), Kantipur, June 25, 2015, https://ekantipur.com/news/2015/06/25/411512.html.

94 Kriti Joshi, “Agreements, MoUs Signed Between Nepal and China,” Himalayan Times, October 13, 2019, https://thehimalayantimes.com/kathmandu/agreements-and-mous-signed-between-nepal-and-china.

95 See Appendix 6: Top Sources of FDI in Focus Countries.

96 “කොළම් තොටේ අසිරි පුරයක්” (A Wonderful City in the Colombo Port), Dinamina, September 17, 2014, http://archives.dinamina.lk/epaper/art.asp?id=2014/09/17/pg01_1&pt=p&h=#.

97 “After Port City, Gota Set to Sell Colombo Fort, Slave Island Heritage Buildings to China-Backed Firms,” Colombo Telegraph, May 28, 2021, https://www.colombotelegraph.com/index.php/after-port-city-gota-set-to-sell-colombo-fort-slave-island-heritage-buildings-to-china-backed-firms/; Wade Shepard, “The Story Behind The World’s Emptiest International Airport,” Forbes, May 28, 2016, https://www.forbes.com/sites/wadeshepard/2016/05/28/the-story-behind-the-worlds-emptiest-international-airport-sri-lankas-mattala-rajapaksa/.

98 Ananth Krishnan, “China Backs Sri Lanka on UNHRC Resolution,” The Hindu, March 22, 2012, https://www.thehindu.com/news/international/china-backs-sri-lanka-on-unhrc-resolution/article3088478.ece.

99 Virtual interview with stakeholder 5B on Sri Lanka, February 2021; “Xi Jinping Speaks With Sri Lankan President Gotabaya Rajapaksa on the Phone,” Ministry of Foreign Affairs of the People’s Republic of China, March 29, 2021, https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1865471.shtml.

100 “අගමැති පිළිගන්න චීනය සූදානම්” (China Ready to Welcome PM), Dinamina, March 5, 2016, http://www.dinamina.lk/2016/03/05/

101 “Sri Lanka Revives Stalled Chinese-Funded Projects,” Yahoo News, December 17, 2015, https://news.yahoo.com/sri-lanka-revives-stalled-chinese-funded-projects-161848870.html.

102 “Sirisena Backs Xi’s Maritime Silk Road Project,” Business Standard, February 7, 2017, https://www.business-standard.com/article/pti-stories/sirisena-backs-xi-s-maritime-silk-road-project-117020700853_1.html.

103 Chinese Embassy in Sri Lanka (@ChinaEmbSL), Twitter Post, June 17, 2021, 8:18 p.m., https://twitter.com/ChinaEmbSL/status/1405537797319008262.

104 Chandani Kirinde, “P’ment Supremacy Over Port City,” Daily FT, May 19, 2021, https://www.ft.lk/top-story/P-ment-supremacy-over-Port-City/26-718054.

105 Charumini de Silva, “Govt. Calls on Global, Local Firms to Invest in Port City,” Daily FT, May 22, 2021, https://www.ft.lk/top-story/Govt--calls-on-global--local-firms-to-invest-in-Port-City/26-718266.

106 “Performance Report - 2017” (Department of External Affairs, Ministry of National Policies and Economic Affairs, Sri Lanka, 2018), http://www.erd.gov.lk/images/Publications/ERDReport2017/ERDReport2017-English.pdf.

107 “Chinese Loans Not Main Source of Debt Trap, Says Think Tank,” Daily Mirror, January 14, 2019, https://www.dailymirror.lk/article/Chinese-loans-not-main-source-of-debt-trap-says-think-tank-161047.html.

108 “Annual Report 2019” (Colombo, Sri Lanka: Ministry of Finance, Sri Lanka, n.d,. pp 113–114), http://oldportal.treasury.gov.lk/documents/10181/12870/Annual+Report+2019-20200625-rev2-eng/5952fd01-ba62-4186-a270-fe87fd87fd5c.

109 “Annual Report 2020” (Colombo, Sri Lanka: Ministry of Finance, Sri Lanka, n.d., p 117), http://oldportal.treasury.gov.lk/documents/10181/12870/AnnualReport-2020/6b2a56e6-80ff-41d6-aec9-76b479f86fb9.

110 Ganeshan Wignaraja et al., “Chinese Investment and the BRI in Sri Lanka” (Chatham House, March 24, 2020), https://www.chathamhouse.org/2020/03/chinese-investment-and-bri-sri-lanka.

111 Virtual interview with stakeholder 5A on Sri Lanka, February 2021.

112 Virtual interview with stakeholder 5A on Sri Lanka, February 2021.

113 Virtual interview with stakeholder 5B on Sri Lanka, February 2021.

114 “Annual Statistical Report 2013,” Sri Lanka Tourism Development Authority, 2013, https://sltda.gov.lk/storage/documents/826914be6b2f346c08d0e66db21809cb.pdf; “Annual Statistical Report 2015,” Sri Lanka Tourism Development Authority, 2016, https://sltda.gov.lk/storage/documents/87e6120675b19fecce8c986006200ecf.pdf; “Annual Statistical Report 2017,” Sri Lanka Tourism Development Authority, 2018, https://sltda.gov.lk/storage/documents/0f7443899b258fa5bffbabf2ecc54e27.pdf; “Annual Statistical Report 2019,” Sri Lanka Tourism Development Authority, 2020, https://srilanka.travel/SLTDA_documents/ASR%202019.pdf.

115 Virtual interview with stakeholder 5A on Sri Lanka, November 2020; “Six Decades on, Sri Lankan Brothers Carry on Family Legacy of Friendship With China,” Xinhua, June 3, 2019, http://www.xinhuanet.com/english/asiapacific/2019-06/03/c_138114004.htm.

116 Pushpa Rowell, “චීනයේ අසිරියෙන් බිඳක්” (A Bit of Chinese Wonder), Dinamina, August 9, 2016, http://www.dinamina.lk/2016/08/09/20621; “Visit to Institutes of Chinese Academy of Sciences,” China-Sri Lanka Joint Center for Research and Education [ CSL-CER ], accessed August 9, 2021, https://www.ruh.ac.lk/Uni/cslcer/mainmenu.php?menu=Events&evntid=8.

117 “Pathfinder Ties Up With Communist Party of China,” Daily News, November 24, 2020, http://www.dailynews.lk/2020/11/24/finance/234281/pathfinder-ties-communist-party-china.

118 Virtual interview with stakeholder 5A on Sri Lanka, February 2021.

119 Virtual interview with stakeholder 5A on Sri Lanka, February 2021.

120 Virtual interview with stakeholder 5A on Sri Lanka, February 2021.

121 Meera Srinivasan, “China Extends $500 Million Loan to Lanka,” The Hindu, April 12, 2021, https://www.thehindu.com/news/international/china-extends-500-million-loan-to-lanka/article34305277.ece.

122 “Sri Lanka Secures $1.5 Bn Chinese Loan,” The Hindu, March 23, 2021, https://www.thehindu.com/news/international/sri-lanka-secures-15-bn-chinese-loan/article34144236.ece.

123 “Chinese Aid a Burst of Spring in Sri Lanka’s COVID-19 Fight,” Xinhua, April 8, 2020, http://www.xinhuanet.com/english/2020-04/08/c_138956763.htm; Suranjana Tewari, “Sri Lanka: Covid Increases China Influence in India’s Backyard,” BBC News, May 20, 2021, https://www.bbc.com/news/world-asia-57167091.

124 “Strong Opposition Is a Must: PM Hasina,” Prothom Alo - English, January 31, 2021, https://en.prothomalo.com/bangladesh/politics/strong-opposition-is-a-must-pm-hasina.

125 “Khaleda Zia to Stay Out of Jail for 6 More Months,” Dhaka Tribune, March 15, 2021, https://www.dhakatribune.com/bangladesh/politics/2021/03/15/khaleda-zia-to-stay-out-of-jail-for-another-6-months.

126 Shamsul Huq Zahid, “The Landmark Credit Swap,” Financial Express, May 30, 2021, https://thefinancialexpress.com.bd/views/the-landmark-credit-swap-1622387865.

127 Suvojit Bagchi, “Election Was Free and Fair: Hasina,” The Hindu, December 31, 2018, https://www.thehindu.com/news/international/election-was-free-and-fair-hasina/article25874607.ece.

128 Virtual interview with stakeholder 1A on Bangladesh, February 2021; virtual interview with stakeholder 1B on Bangladesh, February 2021.

129 Tisaranee Gunasekara, “And Then They Ruled Happily Ever After?,” Groundviews, September 20, 2020, https://groundviews.org/2020/09/20/and-then-they-ruled-happily-ever-after/.

130 End to Sri Lanka’s Democracy: Shouldn’t It Be Resisted?,” Daily FT, September 24, 2020, https://www.ft.lk/columns/End-to-Sri-Lanka-s-democracy—Shouldn-t-it-be-resisted-/4-706483.

131 Ali Faaiq, “Nasheed Informs President Solih of His Interest to Become Prime Minister!,” Times of Addu, April 19, 2021, https://timesofaddu.com/2021/04/19/nasheed-informs-president-solih-of-his-interest-to-become-prime-minister/; Aishath Hanaan Hussain Rasheed, “Maldives Once Again Faces Question of Parliamentary Governance,” Raajje, April 19, 2021, https://raajje.mv/98565.

132 Nirnaya Bhatta and Maximillian Morch, “Citizenship, Identity and Nepal’s Contested 2015 Constitution,” The Diplomat, September 19, 2019, https://thediplomat.com/2019/09/citizenship-identity-and-nepals-contested-2015-constitution/.

133 “Oli Appointed Prime Minister, Days After He Lost Confidence Vote in House,” Kathmandu Post, May 13, 2021, https://kathmandupost.com/politics/2021/05/13/oli-appointed-prime-minister-days-after-he-lost-confidence-vote-in-house.

134 “Government to Extend Southern Highway,” Colombo Gazette, May 30, 2015, https://colombogazette.com/2015/05/30/government-to-extend-southern-highway/.

135 Wijayani Edirisinghe, “දිනමිණ: - සංචාරක වීසාවලට ව්‍යාපාර අයිතිය දීලා” (Continuous Investigations Into Corrupt Officials in the Department of Companies Register), Dinamina, February 25, 2013, http://archives.dinamina.lk/2013/02/25/_art.asp?fn=n1302251.

136 Ram, “පරණ පව් ගෙවීම” (Paying for Past Sins), Dinamina, June 8, 2016, http://www.dinamina.lk/2016/06/08/17434; “වරාය දියේ ගිල්ලූ තෙල් ටැංකි විවෘතය” (The Oil Tanks That Were Submerged in the Harbor Waters Have Been Opened), Dinamina, June 10, 2016, http://www.dinamina.lk/2016/06/10/17504; “වරාය ගිවිසුම අපට වාසියි කියල පොඩි ළමයටත් තේරෙනවා” (Even a Small Child Understands That the Port Agreement Is to Our Advantage), Dinamina, August 4, 2017, http://www.dinamina.lk/2017/08/04/

137 Virtual interview with stakeholder 5H on Sri Lanka, November 2020; virtual interview with stakeholder 5D on Sri Lanka, November 2020; virtual interview with stakeholder 5B on Sri Lanka, February 2021.

138 “Rajapaksa Comeback Bid Checked by Sri Lanka Bribery Probe,” Reuters, July 24, 2015, https://www.reuters.com/article/us-sri-lanka-rajapaksa-idUSKCN0PY1PK20150724.

139 “Corruption Charges Dropped as Gotabaya Rajapaksa Has Immunity as New Sri Lanka President,” Straits Times, November 21, 2019, https://www.straitstimes.com/asia/south-asia/corruption-charges-dropped-against-immune-new-sri-lanka-president-gotabaya-rajapaksa.

140 Karunaratne Amaratunga, “පාඩුවට කඩිනම් ප්‍රතිකාර” (Immediate Treatment for Loss), Dinamina, June 18, 2019, http://www.dinamina.lk/2019/06/18/

141 “පරිසර චෝදනාවෙන් පෝට් සිටිය නිදහස්” (Port City Acquitted of Environmental Charges), Dinamina, January 22, 2016, http://www.dinamina.lk/2016/01/22/

142 Samanmalee Priyashanthi, “රුපියල කඩා‍ වැටුණේ පසුගිය පාලන සමයේදී” (The Rupee Collapsed During the Last Regime), Dinamina, October 24, 2020, http://www.dinamina.lk/2018/10/24/

143 “Environmentalists and Development Projects,” Daily FT, July 16, 2014, https://www.ft.lk/Columnists/environmentalists-and-development-projects/4-323026.

144 Simon Mundy and Kathrin Hille, “Maldives Seeks to Renegotiate With China Over Belt and Road Debt,” Financial Times, January 31, 2019, https://www.ft.com/content/fcab0410-2461-11e9-8ce6-5db4543da632.

145 Sanjeev Miglani, “Maldives’ New President Warns State Coffers ‘Looted’ After China-Led Boom,” Reuters, November 17, 2018, https://www.reuters.com/article/us-maldives-politics-idUSKCN1NM0K8.

146 “Airport Bridge Will Not Cause Lasting Damage to Malé’s Surf Point, Says Minister,” Maldives Independent, April 12, 2016, https://maldivesindependent.com/politics/chinese-bridge-will-not-cause-lasting-damage-to-males-surf-point-says-minister-123472; “Chinese Workers Defy Shark Fishing Ban,” Maldives Independent, October 21, 2018, https://maldivesindependent.com/environment/chinese-workers-defy-shark-fishing-ban-142191.

147 “Bridge Subcontractor’s Boat Stopped With Illegally Mined Sand,” Maldives Independent, May 26, 2019, https://maldivesindependent.com/environment/bridge-subcontractors-boat-stopped-with-illegally-mined-sand-145554.

148 “The China-Maldives Free Trade Agreement Is Officially ‘Dead,’” Maldives Times, October 8, 2020, https://maldivestimes.com/the-china-maldives-free-trade-agreement-is-officially-dead/.

149 Virtual interview with stakeholder 3C on Maldives, October 2020; virtual interview with stakeholder 3A on Maldives, February 2021.

150 “India Offers US$1 Billion in Exchange for Military Presence,” Maldives Independent, November 28, 2018, https://maldivesindependent.com/politics/india-offers-us1-billion-in-exchange-for-military-presence-142961.

151 “A Tale of Two Bridges: India and China Vying for Influence in the Maldives,” Maldives Times, November 25, 2020, https://maldivestimes.com/a-tale-of-two-bridges-india-and-china-vying-for-influence-in-the-maldives/.

152 Ahmed Aiham, “Ahmed Siyam Holdings Pays off Sovereign Loan to EXIM Bank: Finance Ministry,” The Edition, August 6, 2020, https://edition.mv/news/18325.

153 Virtual interview with stakeholder 1A on Bangladesh, February 2021; virtual interview with stakeholder 1E on Bangladesh, February 2021.

154 “World Bank Statement on Padma Bridge,” World Bank, Press Release, June 29, 2012, https://www.worldbank.org/en/news/press-release/2012/06/29/world-bank-statement-padma-bridge.

155 At the time, Sinohydro was in the “early temporary phase,” of the sanctions process, which the World Bank issues “before the completion of an investigation by the World Bank Integrity Vice Presidency (INT). This can be issued if there is already sufficient evidence to conclude that a sanctionable practice has occurred and that the appropriate sanction for such misconduct involves a minimum period of debarment of at least 2 years.” During this phase, the suspended company is not eligible to bid for World Bank-funded projects. According to the tender document for the Bangladeshi project, the successful bidder was required to be eligible for World Bank projects. Additionally, while the temporary suspension process is confidential, the other two bidders had informed the government of Sinohydro’s status which could be verified with the World Bank. More here: “Early Temporary Suspension of Companies Involved in World Bank-Financed Projects” (World Bank, n.d.), https://thedocs.worldbank.org/en/doc/c44ad03494ae6a2fbf1180e0ca67fafa-0090012021/original/Early-Temp-Suspension-Announcement.pdf; Sharier Khan and M. Abul Kalam Azad, “Failed Company to Get $0.78b Padma Job,” Daily Star, July 11, 2014, https://www.thedailystar.net/failed-company-to-get-0-78b-padma-job-32820.

156 “নদীশাসনের কাজ পেল সেই সিনোহাইড্রো” (Sinohydro Got the Job of River Management), Prothom Alo, September 11, 2014; “Sinohydro Gets Contract,” Daily Star, September 11, 2014, https://www.thedailystar.net/sinohydro-gets-contract-41178.

157 “এসবিজিতে মাটি ভরাটে চুক্তি চীনা কোম্পানির সাথে” (Agreement With Chinese Company in Ground Fill Up at SBG), Bangladesh Pratidin, January 31, 2019, https://www.ebdpratidin.com/arc/pre_page/2019-01-31/3.

158 “No Job for China Harbour in Future,” Daily Star, January 17, 2018, https://www.thedailystar.net/frontpage/no-job-china-harbour-future-1520917.

159 “অর্থ চিনের, ঠিকাদারও ঠিক করে দেয় চিন” (Chinese Investment and They Fix the Contractors), Prothom Alo, November 8, 2015; “চীনের জন্য বিশেষ অর্থনীতিক অঞ্চল” (Special Economic Zone for China), Bangladesh Pratidin, October 10, 2016.

160 “A Tale of Two Bridges: India and China Vying for Influence in the Maldives,” Maldives Times, November 25, 2020, https://maldivestimes.com/a-tale-of-two-bridges-india-and-china-vying-for-influence-in-the-maldives/.

161 “Feydhoo Finolhu Leased to Chinese Company for US$4m,” Maldives Independent, December 24, 2016, https://maldivesindependent.com/business/feydhoo-finolhu-leased-to-chinese-company-for-us4m-127572.

162 “Majlis Approves Foreign Freeholds in Second Amendment to Constitution,” Maldives Independent, July 22, 2015, https://maldivesindependent.com/politics/majlis-authorizes-foreign-ownership-of-land-in-second-constitutional-amendment-101193.

163 Samanmalee Priyashanthi, “පසුගිය රජයට පාරවල් හදන්න ටෙන්ඩර් පටිපාටියක් තිබුණේ නැහැ” (The Previous Government Did Not Have a Tender Procedure to Build Roads), Dinamina, April 20, 2016, http://www.dinamina.lk/2016/04/20/%E0%B6%B4%E0%B7%94%E0%B7%80%E0%B6%AD%E0%B7%8A/15275; Ram, “පරණ පව් ගෙවීම” (Paying for Past Sins), Dinamina, June 8, 2016, http://www.dinamina.lk/2016/06/08/17434.

164 “Ceypetco Suspends Oil Contracts Worth Millions,” Colombo Gazette, July 2, 2015, https://colombogazette.com/2015/07/02/ceypetco-suspends-oil-contracts-worth-millions/.

165 Samanmalee Priyashanthi, “රුපියල කඩා‍ වැටුණේ පසුගිය පාලන සමයේදී” (The Rupee Collapsed During the Last Regime), Dinamina, October 24, 2020, http://www.dinamina.lk/2018/10/24/

166 “පරිසර චෝදනාවෙන් පෝට් සිටිය නිදහස්” (Port City Acquitted of Environmental Charges), Dinamina, January 22, 2016, http://www.dinamina.lk/2016/01/22/

167 Virtual interview with stakeholder 4A on Nepal, November 2020.

168 Deepak Pariyar and Bina Thapa, “चुनावपछि विमानस्थल निर्माण सुरु : चिनियाँ राजदूत” (Construction of Airport Begins After Election: Chinese Ambassador), Kantipur, May 9, 2017, https://ekantipur.com/business/2017/05/09/20170509092709.html.

169 “Nepal Airlines Corporation Grounds All Its Chinese Aircraft,” Himalayan Times, August 1, 2020, https://thehimalayantimes.com/business/nepal-airlines-corporation-grounds-all-its-chinese-aircraft.

170 “चिनियाँ जहाजमा धेरै त्रुटि” (Many Errors on the Chinese Aircraft), Kantipur, July 29, 2015, https://ekantipur.com/business/2015/07/29/413625.html.

171 Narayan Sharma, “बुटवल-नारायणगढ सडक खण्डमा कार्यरत मजदुर र चिनियाँ ठेकेदारबीच सहमति” (Agreement Between Workers Working on Butwal-Narayangadh Road Section and Chinese Contractor), Kantipur, December 1, 2020, https://ekantipur.com/pradesh-4/2020/12/01/1606816605873737.html.

172 Sabitri Dhakal, “Mandarin Made Mandatory in Many Schools,” Himalayan Times, June 15, 2019, https://thehimalayantimes.com/nepal/mandarin-made-mandatory-in-many-schools.

173 “World Justice Project Rule of Law Index 2020” (World Justice Project, March 11, 2020), https://worldjusticeproject.org/sites/default/files/documents/WJP-ROLI-2020-Online_0.pdf.

174 Anil Giri, “Nepal’s Arrest and Deportation of 122 Chinese Raise Legal and Ethical Questions,” Kathmandu Post, January 8, 2020, https://kathmandupost.com/national/2020/01/08/nepal-s-arrest-and-deportation-of-122-chinese-raises-legal-and-ethical-questions.

175 Virtual interview with stakeholder 4D on Nepal, March 2021; virtual interview with stakeholder 6B on Nepal, March 2021.

176 “चिनियाँ राष्ट्रपति भ्रमणको सुरक्षा तयारी” (Security Preparations for Chinese President's Visit), Kantipur, September 23, 2019, https://ekantipur.com/news/2019/09/23/156920551010117080.html; Matrika Dahal, “चिनियाँ राष्ट्रपति सीको भ्रमणमा विरोध गर्ने २ तिब्बती शरणार्थीसहित ३२ जना पक्राउ” (Thirty-Two People, Including Two Tibetan Refugees Protesting Against Chinese President Xi Jinping's Visit, Have Been Arrested), Kantipur, October 13, 2019, https://ekantipur.com/news/2019/10/13/157097477814436832.html.

177 “Amnesty Stands Up for Bangladeshi Journalists,” United News of Bangladesh, March 18, 2020, https://unb.com.bd/category/Bangladesh/amnesty-stands-up-for-bangladeshi-journalists/47392; “Surveillance: HRW Worried at Govt Move,” Daily Star, October 20, 2018, https://www.thedailystar.net/country/news/hrw-human-rights-watch-concerned-over-bangladesh-government-intensive-surveillance-social-media-1649122.

178 Virtual interview with stakeholder 1A on Bangladesh, February 2021; virtual interview with stakeholder 1F on Bangladesh, April 2021.

179 “4 Killed in Clash Over Setting Up Power Plant,” Daily Star, April 5, 2016, https://www.thedailystar.net/frontpage/3-killed-30-injured-clash-over-power-plant-1204543.

180 “5 Dead as Police Open Fire on Coal Power Plant Workers in Chattogram,” Daily Star, April 17, 2021, https://www.thedailystar.net/bangladesh/news/four-coal-power-plant-workers-killed-clash-police-ctgs-banshkhali-2078953.

181 “Nepal: Victim of Political Vicissitudes | Reporters Without Borders,” RSF, accessed August 5, 2021, https://rsf.org/en/nepal.

182 Kamal Dev Bhattarai, “With Latest Draft Bill, Press Freedom in Nepal Under Siege,” The Wire, May 17, 2019, https://thewire.in/south-asia/with-latest-draft-bill-press-freedom-in-nepal-under-siege.

183 “Journalists, Stakeholders Want Government to Scrap Public Service Broadcasting Bill,” Himalayan Times, December 10, 2020, https://thehimalayantimes.com/nepal/journalists-stakeholders-want-government-to-scrap-public-service-broadcasting-bill.

184 “Journalist Giri Released on Normal Date,” Himalayan Times, April 19, 2019, https://thehimalayantimes.com/nepal/journalist-arjun-giri-released-on-normal-date; Masta KC, “Scripted Arrest,” Nepali Times, June 12, 2019, https://www.nepalitimes.com/banner/scripted-arrest/.

185 “Statement of the Embassy of the People’s Republic of China in Nepal,” Embassy of the People’s Republic of China in Nepal, February 18, 2020, http://np.chineseembassy.org/eng/News/t1746464.htm.

186 Anil Giri, “Three Journalists Are Under Investigation Over Publishing News About the Dalai Lama,” Kathmandu Post, May 12, 2019, https://kathmandupost.com/national/2019/05/12/three-journalists-face-probe-over-publishing-dalai-lama-news.

187 Subash Acharya, “Tibetan Refugee Issues in Nepali Press,” Tibet Journal 43, no. 2 (2018): 41–63.

188 Virtual interview with stakeholder 6B on Nepal, March 2021.

189 Yeshi Dorje and Rajani Tamang, “Nepalese Journalists Pushed to Avoid Reporting on China, Tibet,” Voice of America, June 29, 2019, https://www.voanews.com/south-central-asia/nepalese-journalists-pushed-avoid-reporting-china-tibet.

190 “चिनियाँ दुताबासअघि आन्दोलन गर्न खोज्ने पक्राउ” (People Trying to Protest in Front of the Chinese Embassy Arrested), Kantipur, March 10, 2014, https://ekantipur.com/news/2014/03/10/385486.html.

191 Matrika Dahal, “चिनियाँ राष्ट्रपति सीको भ्रमणमा विरोध गर्ने २ तिब्बती शरणार्थीसहित ३२ जना पक्राउ” (Thirty-Two People, Including Two Tibetan Refugees Protesting Against Chinese President Xi Jinping's Visit, Have Been Arrested), Kantipur, October 13, 2019, https://ekantipur.com/news/2019/10/13/157097477814436832.html.

192 Santosh Ghimire, “Samajbadi Party Suspends Its Lawmaker for Taking Part in Event Related to ‘Free-Tibet Movement,’” My Republica, June 25, 2019, https://myrepublica.nagariknetwork.com/news/samajbadi-party-suspends-its-lawmaker-for-taking-part-in-event-related-to-free-tibet-movement/.

193 “2019 Civil Society Organization Sustainability Index - Asia” (United States Agency for International Development, December 2020, 44-53), https://www.fhi360.org/resource/civil-society-organization-sustainability-index-reports.

194 Virtual interview with stakeholder 1A on Bangladesh, February 2021; virtual interview with stakeholder 1F on Bangladesh, April 2021.

195 “China to Further Consolidate Relations With Bangladesh,” Daily Star, February 2, 2009, https://www.thedailystar.net/news-detail-74042; “Ambassador Li Jiming Visits Daily Sun and NEWS24,” Embassy of the People’s Republic of China in the People’s Republic of Bangladesh, February 27, 2020, http://bd.chineseembassy.org/eng/dshd/t1749954.htm.

196 “Dhaka Art Summit Covers up Tibetan Art,” Prothom Alo - English, February 9, 2016, https://en.prothomalo.com/entertainment/Dhaka-Art-Summit-covers-up-Tibetan-art.

197 “Center for International Media Assistance,” Media Ownership in Bangladesh: Why More Media Outlets Does Not Mean More Media Freedom (blog), April 15, 2021, https://www.cima.ned.org/blog/media-ownership-in-bangladesh-why-more-media-outlets-does-not-mean-more-media-freedom/.

198 “Bangladesh: Tougher Politics, More Press Freedom Violations | Reporters Without Borders,” RSF, accessed August 5, 2021, https://rsf.org/en/bangladesh.

199 Zyma Islam, “Scars of Torture All Over Him,” Daily Star, March 5, 2021, https://www.thedailystar.net/frontpage/news/scars-torture-all-over-him-2055265; “‘Tortured in Custody,’” Daily Star, August 7, 2018, https://www.thedailystar.net/city/whereabouts-shahidul-alam-still-unknown-family-1616650; “Journalist Sent to Jail Under Digital Security Act in Jhalakathi,” Daily Star, May 11, 2021, https://www.thedailystar.net/crime/news/journalist-sent-jail-under-digital-security-act-jhalakathi-2092069.

200 “2019 Civil Society Organization Sustainability Index - Asia” (United States Agency for International Development, December 2020, 7-16), https://www.fhi360.org/resource/civil-society-organization-sustainability-index-reports.

201 “Maldives : Encouraging Results, Promises to Keep | Reporters Without Borders,” RSF, accessed August 5, 2021, https://rsf.org/en/maldives.

202 Nafaahath Ibrahim, “President Solih Ratifies Bill to Repeal Contentious Defamation Act,” The Edition, November 22, 2018, http://edition.mv/news/7973.

203 “Maldives Police Arrest Reporters at Press Freedom Rally,” Al Jazeera, April 4, 2016, https://www.aljazeera.com/news/2016/4/4/maldives-police-arrest-reporters-at-press-freedom-rally; “Seven Journalists Arrested From Opposition Protest,” Maldives Independent, July 27, 2017, https://maldivesindependent.com/politics/seven-journalists-arrested-from-opposition-protest-131726; “Indian, British Journalists Arrested in Maldives for ‘Violating’ Immigration Rules,” Hindustan Times, February 9, 2018, https://www.hindustantimes.com/india-news/indian-british-journalists-arrested-in-maldives-for-violating-immigration-rules/story-A8EnruVe4JZR9EcIby0e1L.html.

204 Mehr Gill, “Explained: The Case Against Maldivian Ex-President Abdulla Yameen,” Indian Express, December 2, 2019, https://indianexpress.com/article/explained/explained-who-is-abdulla-yameen-the-maldivian-ex-president-sentenced-to-5-years-in-jail-6144271/.

205 Virtual interview with stakeholder 3C on Maldives, October 2020.

206 “Maldives Independent Suspends Operations,” Maldives Independent, January 31, 2020, https://maldivesindependent.com/feature-comment/maldives-independent-suspends-operations-149760.

207 Ahmedulla Abdul Hadi, “Commission to Regulate Media by Govt, Parliament Proposed,” SunOnline International, August 10, 2020, https://en.sun.mv/62261.

208 Virtual interview with stakeholder 5B on Sri Lanka, February 2021.

209 “Sri Lanka,” Media Ownership Monitor, accessed August 5, 2021, https://www.mom-rsf.org/en/countries/sri-lanka/.

210 “2019 Civil Society Organization Sustainability Index - Asia” (United States Agency for International Development, December 2020, 63-70), https://www.fhi360.org/resource/civil-society-organization-sustainability-index-reports.

211 Ahimsa Wickrematunge, “My Father Was Assassinated 12 Years Ago. Sri Lanka’s Leaders Are Still Denying Us Justice,” Washington Post, March 2, 2021, https://www.washingtonpost.com/opinions/2021/03/02/lasantha-wickrematunge-ahimsa-rajapaksa/.

212 “Open Wounds and Mounting Dangers” (Human Rights Watch, February 1, 2021), https://www.hrw.org/report/2021/02/01/open-wounds-and-mounting-dangers/blocking-accountability-grave-abuses-sri-lanka; “CPJ Alarmed at Threat to Lankan Journalists,” Sunday Times, June 15, 2008, https://www.sundaytimes.lk/080615/News/timesnews007.html.

213 “Expose: Media Heads to Bow; Rajapaksa Gives 547 Journos Interest Free Car Loans,” Colombo Telegraph, January 20, 2014, https://www.colombotelegraph.com/index.php/expose-media-heads-to-bow-rajapaksa-gives-547-journos-interest-free-car-loans/.

214 Hariharan, “செக்” வைக்கும் சீனா” (Checkmate China), Virakesari, March 18, 2018; Hariharan, “இலங்கையும் இரண்டு வாள்களும்” (Sri Lanka and Two Swords), Virakesari, September 6, 2020.

215 Meera Srinivasan, “News Analysis | A Perception Shift in Relations Between Sri Lanka and China?,” The Hindu, July 9, 2021, https://www.thehindu.com/news/international/news-analysis-a-perception-shift-in-relations-between-sri-lanka-and-china/article35240800.ece.

216 Virtual interview with stakeholder 5E on Sri Lanka, April 2021.

217 Hassaan Shazuli, “UPDATE: Twitter Lifts Suspension on Chinese Embassy Handle; China Accuses of ‘Double Standards,’” NewsFirst, April 13, 2020, https://www.newsfirst.lk/2020/04/13/twitter-suspends-account-of-chinese-embassy-in-colombo/.

218 Virtual interview with stakeholder 5A on Sri Lanka, February 2021; virtual interview with stakeholder 5E on Sri Lanka, April 2021.

219 “China Radio International’s Tamil Service Completes 50 Years,” The Hindu, August 3, 2013, https://www.thehindu.com/news/international/world/china-radio-internationals-tamil-service-completes-50-years/article4985482.ece; Administrator, “Tamil Broadcast Service Most Popular of China Radio International’s 60+ International Channels,” Dbsjeyaraj.com (blog), July 30, 2012, http://dbsjeyaraj.com/dbsj/archives/8868.

220 “සිංහල සේවය” (Sinhala Service), CRIOnline | සිංහල, September 18, 2020, http://sinhalese.cri.cn/aboutus/sinhalese.html.

221 “IMF Survey: Sri Lanka to Use IMF Loan to Reform Economy After Conflict,” July 29, 2009, https://www.imf.org/en/News/Articles/2015/09/28/04/53/soint073009a.

222 Nimmi Gowrinathan and Zachariah Mampilly, “Aid and Access in Sri Lanka,” Humanitarian Practice Network, July 2009, https://odihpn.org/magazine/aid-and-access-in-sri-lanka/.

223 Janaka Wijayasiri and Nuwanthi Senaratne, “China’s Belt and Road Initiative (BRI) and Sri Lanka,” in China: BRI o El Nuevo Camino de La Seda, ed. Arturo Oropeza García (Universidad Nacional Autónoma de México / Instituto de Investigaciones Jurídicas, 2018).

224 C.J. Amaratunga, “අයියෝ මල්ලි... රට පාවා දී ඡන්ද කළ හැටි” (Come on Brother... How He Did the Election While Betraying the Country), Dinamina, July 5, 2018, https://www.dinamina.lk/2018/07/05/

225 “After Port City, Gota Set to Sell Colombo Fort, Slave Island Heritage Buildings to China-Backed Firms,” Colombo Telegraph, May 28, 2021, https://www.colombotelegraph.com/index.php/after-port-city-gota-set-to-sell-colombo-fort-slave-island-heritage-buildings-to-china-backed-firms/.

226 Sudha Ramachandran, “China and Sri Lanka: In Choppy Waters,” China Brief 15, no. 10 (May 15, 2015): 10–13, https://jamestown.org/program/china-and-sri-lanka-in-choppy-waters/.

227 Samanmalee Priyashanthi, “රුපියල කඩා‍ වැටුණේ පසුගිය පාලන සමයේදී” (The Rupee Collapsed During the Last Regime), Dinamina, October 24, 2020, http://www.dinamina.lk/2018/10/24/ “CPA Commentary on the Port City Bill,” Centre for Policy Alternatives, May 3, 2021, https://www.cpalanka.org/wp-content/uploads/2021/05/CPA-commentary-on-the-Port-City-Bill-03.05.2021-1.pdf.

229 Saman Indrajith, “Proposed Law Will Turn Port City Into a Province of China – JVP,” Island Online, April 13, 2021, http://island.lk/proposed-law-will-turn-port-city-into-a-province-of-china-jvp/; Nabiya Vaffoor, “Port City Project: Country Will Become Servile to Foreigners – Sajith,” CeylonToday, April 19, 2021, https://ceylontoday.lk/news/port-city-project-country-will-become-servile-to-foreigners-sajith; “Opposition: Is Port City a Separate State?,” Island Online, April 12, 2021, http://island.lk/opposition-is-port-city-a-separate-state/.

230 “Certain Provisions of Clauses of the Port City Commission Bill Are Unconstitutional, Supreme Court Rules,” ColomboPage, May 18, 2021, http://www.colombopage.com/archive_21A/May18_1621319795CH.php.

231 “SL Govt Decides Not to Sign $480mn MCC Agreement,” Outlook, February 29, 2020, https://www.outlookindia.com/newsscroll/sl-govt-decides-not-to-sign-480mn-mcc-agreement/1747783; Thameenah Razeek, “Stand on ECT: Govt Yet to Notify India,” CeylonToday, February 10, 2021, https://ceylontoday.lk/news/stand-on-ect-govt-yet-to-notify-india.

232 “Rajapaksa Comeback Bid Checked by Sri Lanka Bribery Probe,” Reuters, July 24, 2015, https://www.reuters.com/article/us-sri-lanka-rajapaksa-idUSKCN0PY1PK20150724.

233 “Basil Loses His 240 Million Worth Luxury Villa in Malwana,” Colombo Telegraph, October 14, 2016, https://www.colombotelegraph.com/index.php/basil-loses-his-125-million-worth-luxury-villa-in-malwana/.

234 “Sri Lanka’s Gotabhaya Rajapaksa Charged With Corruption,” BBC News, August 31, 2016, https://www.bbc.com/news/world-asia-37234654.

235 Lahiru Fernando, “‘Rajapaksas Sold Off State Land to Foreigners in Mega Land Deals’ - Champika,” Daily News, November 12, 2019, https://www.dailynews.lk/2019/11/12/local/202630/%E2%80%98rajapaksas-sold-state-land-foreigners-mega-land-deals%E2%80%99-champika.

236 “Corruption Charges Against Sri Lanka President Gotabaya Rajapaksa Dropped, Travel Ban Lifted,” New Indian Express, November 21, 2019, https://www.newindianexpress.com/world/2019/nov/21/corruption-charges-against-sri-lanka-president-gotabaya-rajapaksa-dropped-travel-ban-lifted-2065068.html.

237 James Kynge and Gabriel Wildau, “China: With Friends Like These,” Financial Times, March 18, 2015, https://www.ft.com/content/2bb4028a-cbf0-11e4-aeb5-00144feab7de.

238 “Xi Jinping Meets Sirisena: Works to Mend Sri Lanka Ties,” AsianMIRROR, March 26, 2015, https://asianmirror.lk/news/item/7797-president-xi-jinping-works-to-mend-sri-lanka-ties.

239 “No Other Place to Go Barring India or China: Sri Lankan PM Ranil Wickramasinghe,” Financial Express, October 6, 2016, https://www.financialexpress.com/india-news/no-other-place-to-go-barring-india-or-china-sri-lankan-pm-ranil-wickramasinghe/408259/.

240 “China-Sri Lanka Cooperation Rooted in the Friendship of the Two Peoples,” Embassy of The People’s Republic of China in Sri Lanka, April 5, 2016, http://lk.china-embassy.org/eng/xwdt/t1353067.htm.

241 “China’s Xi Offers Fresh $295 Million Grant to Sri Lanka,” Reuters, July 22, 2018, https://www.reuters.com/article/us-sri-lanka-china-grant-idUSKBN1KC0D8.

242 Swarna Wijekoon, Roshan Thushara, and Mahinda Aluthgedara, “නැව් එන වරායක් කෙළේ යහපාලන ආණ්ඩුවයි” (It Was the Good Governance Government That Made the Port a Shipping Port), Dinamina, July 6, 2018, http://www.dinamina.lk/2018/07/06/

243 Virtual interview with stakeholder 5B on Sri Lanka, February 2021; virtual interview with stakeholder 5D on Sri Lanka, November 2020.

244 Shihar Aneez, “Chinese Query Sri Lanka Allegations of Corruption in Contracts,” Reuters, November 2, 2016, https://www.reuters.com/article/sri-lanka-china-idUSL4N1D256S.

245 Chinese Embassy in Sri Lanka (@ChinaEmbSL), Twitter, June 17, 2021, 8:18 p.m., https://twitter.com/ChinaEmbSL/status/1405537797319008262.

246 “Opposition Criticizes Government for Bringing Chinese COVID-19 Vaccine Not Approved by WHO,” ColomboPage, April 4, 2021, http://www.colombopage.com/archive_21A/Apr04_1617559939CH.php; virtual interview with stakeholder 5E on Sri Lanka, April 2021.

247 “After Port City, Gota Set to Sell Colombo Fort, Slave Island Heritage Buildings to China-Backed Firms,” Colombo Telegraph, May 28, 2021, https://www.colombotelegraph.com/index.php/after-port-city-gota-set-to-sell-colombo-fort-slave-island-heritage-buildings-to-china-backed-firms/.

248 Virtual interview with stakeholder 5E on Sri Lanka, April 2021; virtual interview with stakeholder 5A on Sri Lanka, February 2021.

249 “කොරෝනා වෛරසය ගැන බටහිර මාධ්‍ය ගෙන යන ප්‍රචාර නින්දිතයි” (The Propaganda About the Coronavirus in the Western Media Is Disgraceful), Dinamina, January 29, 2020, http://www.dinamina.lk/2020/02/17/

250 “‘සුගත් රත්නායකගේ “තොරතුරු විප්ලවය හා ප්‍රවෘත්ති’ කෘතිය එළිදකී” (Sugath Ratnayake’s Book “Information Revolution and News” Released), Dinamina, May 24, 2019, http://www.dinamina.lk/2019/05/24/

251 “‘මහජන චීනය’ ද්විමාසික සඟරාවේ අලුත්ම පිටපත පිළිගැන්වූ අවස්ථාව” (Presentation of the Latest Edition of the Bi-Monthly Magazine “People's China”), Dinamina, August 5, 2019, http://www.dinamina.lk/2019/08/05/

252 “Pathfinder Foundation Opens ‘China-Sri Lanka Cooperation Studies Centre,’” Daily FT, December 18, 2018, https://www.ft.lk/news/Pathfinder-Foundation-opens---China-Sri-Lanka-Cooperation-Studies-Centre-/56-669107; “Pathfinder Ties Up With Communist Party of China,” Daily News, November 24, 2020, http://www.dailynews.lk/2020/11/24/finance/234281/pathfinder-ties-communist-party-china.

253 “China-Sri Lanka Joint Center for Research and Education (CSL-CER) Was Declared Open,” China-Sri Lanka Joint Center for Research and Education [ CSL-CER ], accessed August 9, 2021, https://www.ruh.ac.lk/Uni/cslcer/mainmenu.php?menu=Events&evntid=5.

254 Jhinuk Chowdhury, “Here’s Why China Is Financing Local Elections in Nepal,” Hindustan Times, April 3, 2017, https://www.hindustantimes.com/opinion/here-s-why-china-is-financing-local-elections-in-nepal/story-KFMsNEcGxX8u2Sh2BL9ddN.html.

255 Jagdishwar Pandey, “नेकपा विवाद चर्किएकै बेला अध्यक्ष दाहाललाई भेटिन् चिनियाँ राजदूतले” (The Chinese Ambassador Met Dahal, While the CPN Dispute Was Raging), Kantipur, July 9, 2020, https://ekantipur.com/news/2020/07/09/159429745240916006.html.

256 Jagdishwar Pandey, “नेकपा विवादमा चिनियाँ ‘सहजीकरण’” (Chinese ‘Facilitation’ in Nepal Communist Party [CPN] Dispute), Kantipur, July 8, 2020, https://ekantipur.com/news/2020/07/08/159417798998474954.html.

257 Devendra Bhattarai, “चिनियाँ भेटघाट सामान्य प्रचलन कि सरोकार ?” (Are Chinese Meetings Common Practice or a Concern?), Kantipur, May 2, 2020, https://ekantipur.com/news/2020/05/02/158838213623349942.html.

258 Anil Giri, “Chinese Team Gets Down to Business as It Arrives,” Kathmandu Post, December 28, 2020, https://kathmandupost.com/national/2020/12/28/chinese-team-gets-down-to-business-as-it-arrives.

259 “Chinese Delegation Led by CPC Vice-Minister Guo Yezhou Returns Home,” Himalayan Times, December 30, 2020, https://thehimalayantimes.com/kathmandu/chinese-delegation-led-by-cpc-vice-minister-guo-yezhou-returns-home.

260 “Nepal Communist Party Holding a Virtual Workshop With Chinese Communist Party,” Kathmandu Post, June 19, 2020, https://kathmandupost.com/politics/2020/06/19/nepal-communist-party-holding-a-virtual-workshop-with-chinese-communist-party.

261 Anup Kaphle, “A Blueprint for Consolidating Power: China Exports Xi Jinping Thought to Nepal,” Kathmandu Post, September 24, 2019, https://kathmandupost.com/2/2019/09/24/a-blueprint-for-consolidating-power-china-exports-xi-jinping-thought-to-nepal.

262 Dhanwati Yadav, “Is the Growth of Sino-Nepal Relations Reducing Nepal’s Autonomy?,” China Brief 21, no. 5 (March 15, 2021): 27–32, https://jamestown.org/program/is-the-growth-of-sino-nepal-relations-reducing-nepals-autonomy/.

263 Chetnath Acharya, “बूढीगण्डकी खोसिएपछि चिनियाँ रोष” (Chinese Rage After the Abrogation of Budhigandaki), Kantipur, December 1, 2017, https://ekantipur.com/opinion/2017/12/01/20171201070511.html.

264 Virtual interview with stakeholder 4H on Nepal, October 2020; virtual interview with stakeholder 4H on Nepal, November 2020; virtual interview with stakeholder 4C on Nepal, March 2021.

265 “How Much Is China Investing in Nepal, Where, and How?,” The Record, September 13, 2019, https://www.recordnepal.com/how-much-is-china-investing-in-nepal-where-and-how.

266 Suraj Kunwar, “चिनियाँ दुई विमान पुसभित्रै ल्याइने” (Two Chinese Planes to Be Brought Within Mid January 2017), Kantipur, November 30, 2016, https://ekantipur.com/business/2016/11/30/20161130084558.html.

267 Sangam Prasain, “Nepal Airlines to Lease Out Grounded Chinese Planes,” Kathmandu Post, April 4, 2021, https://kathmandupost.com/money/2021/04/04/nepal-airlines-to-lease-out-grounded-chinese-planes.

268 Sunil Sapkota, “Govt Calls Bids to Set Up Digital Action Room at PMO,” My Republica, January 25, 2019, https://myrepublica.nagariknetwork.com/news/govt-calls-bids-to-set-up-digital-action-room-at-pmo/.

269 “Nepal, China Sign Deal for Budhi-Gandaki Hydroelectric Project,” Business Standard, June 5, 2017, https://www.business-standard.com/article/pti-stories/nepal-china-sign-deal-for-budhi-gandaki-hydroelectric-project-117060501243_1.html; “Nepal Signs Mega Hydro Project Deal With Chinese Firm,” Economic Times, June 5, 2017, https://economictimes.indiatimes.com/news/international/world-news/nepal-signs-mega-hydro-project-deal-with-chinese-firm/articleshow/58996236.cms.

270 “बूढीगण्डकी आयोजना बनाउन चिनियाँ कम्पनीसँग भएको सम्झौता मन्त्रिपरिषदद्वारा खारेज” (The Agreement With the Chinese Company to Build the Budhi Gandaki Project Was Abrogated by the Council of Ministers), Kantipur, November 13, 2017, https://ekantipur.com/news/2017/11/13/20171113125753.html.

271 “Nepal Signs Mega Hydro Project Deal With Chinese Firm,” The Hindu, June 5, 2017, https://www.thehindu.com/news/international/nepal-signs-mega-hydro-project-deal-with-chinese-firm/article18721870.ece; “NC Takes Exception to Govt Decision to Award Budhi Gandaki Project to Gezhouba,” Kathmandu Post, October 8, 2018, https://kathmandupost.com/national/2018/10/08/nc-takes-exception-to-govt-decision-to-award-budhigandaki-project-to-gezhouba.

272 “Annual Report 2020,” Central Bank of Sri Lanka, April 2021; “China Debt Dogs Maldives’ ‘Bridge to Prosperity,’” Maldives Times, September 17, 2020, https://maldivestimes.com/china-debt-dogs-maldives-bridge-to-prosperity-bbc-news/.

273 Virtual interview with stakeholder 1A on Bangladesh, February 2021; virtual interview with stakeholder 1B on Bangladesh, February 2021; virtual interview with stakeholder 3A on Maldives, February 2021.

274 Virtual interview with stakeholder 1B on Bangladesh, November 2020.

275 Virtual interview with stakeholder 3A on Maldives, February 2021.

276 Virtual interview with stakeholder 5A on Sri Lanka, February 2021.

277 Virtual interview with stakeholder 4A on Nepal, November 2020.

278 Kallol Bhattacherjee, “The Hindu Explains | What Does Chinese Interest in the Teesta Mean for India?,” The Hindu, August 23, 2020, https://www.thehindu.com/news/international/the-hindu-explains-what-does-chinese-interest-in-the-teesta-mean-for-india/article32420205.ece.

279 Arindam Roy, “Saarc Covid Fund: No Indian Money for Pakistan; Nepal Biggest Beneficiary,” Business Standard, November 30, 2020, https://www.business-standard.com/article/current-affairs/saarc-covid-fund-no-indian-money-for-pakistan-nepal-biggest-beneficiary-120113001116_1.html; “Wang Yi Hosts Video Conference of Foreign Ministers of China, Afghanistan, Bangladesh, Nepal, Pakistan and Sri Lanka on COVID-19,” Ministry of Foreign Affairs of the People’s Republic of China, April 27, 2021, https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1872178.shtml.

280 “Statement of the Embassy of the People’s Republic of China in Nepal,” Embassy of the People’s Republic of China in Nepal, February 18, 2020, http://np.chineseembassy.org/eng/News/t1746464.htm.

281 “Nepali Editors Condemn Chinese Embassy’s Statement Regarding the Post,” Kathmandu Post, February 19, 2020, https://kathmandupost.com/2/2020/02/19/nepali-editors-condemn-chinese-embassy-s-statement-regarding-the-post.

282 Virtual interview with stakeholder 5E on Sri Lanka, April 2021.

283 “China to Further Consolidate Relations With Bangladesh,” Daily Star, February 2, 2009, https://www.thedailystar.net/news-detail-74042; “Ambassador Li Jiming Visits Daily Sun and NEWS24,” Embassy of the People’s Republic of China in the People’s Republic of Bangladesh, February 27, 2020, http://bd.chineseembassy.org/eng/dshd/t1749954.htm.

284 “සිසු දරුවන් සඳහා පෝට්සිටියෙන් සමාජ සත්කාරක වැඩසටහනක්” (A Social Care Program From Potsdam for Students), Dinamina, December 8, 2018, http://www.dinamina.lk/2018/12/08/

285 “लुम्बिनीमा चिनियाँ मन्त्री” (Chinese Minister in Lumbini), Kantipur, May 15, 2016, https://ekantipur.com/printedition/2016/05/15/20160515081227.html.

286 “China Arm Twists Maldives into Signing a Free Trade Agreement,” Maldives Times, December 19, 2017, https://maldivestimes.com/china-arm-twists-maldives-into-signing-a-free-trade-agreement/.

287 “নদীশাসনের কাজ পেল সেই সিনোহাইড্রো” (Sinohydro Got the Job of River Management), Prothom Alo, September 11, 2014.

288 “ශ්‍රී ලංකාව අධිරාජ්‍යවාදී ප්‍රචාරක යන්ත්‍රණයට හසු වන්නේ නැති බව ක්‍රියාවෙන් පෙන්වා දී තිබෙනවා” (Sri Lanka Through Its Actions Has Shown That It Will Not Get Caught in the Imperialist Propaganda Mechanisms), Dinamina, November 2, 2020, http://www.dinamina.lk/2020/11/02/

289 Virtual interview with stakeholder 1F on Bangladesh, April 2021.

290 Virtual interview with stakeholder 1F on Bangladesh, April 2021.

291 Ganeshan Wignaraja et al., “Chinese Investment and the BRI in Sri Lanka” (Chatham House, March 24, 2020, 10–11), https://www.chathamhouse.org/2020/03/chinese-investment-and-bri-sri-lanka.

292 Swarna Wijekoon, Chameera Elladeniya, and Subhashini Senanayake, “ස්වාධිපත්‍යය ආරක්ෂා කරමින් ජාත්‍යන්තර සබඳතා පුළුල් කරනවා” (Defending Sovereignty and Expanding International Relations), Dinamina, January 27, 2016, http://www.dinamina.lk/2016/01/27/

293 “বড় ১০ প্রকল্পে এক লাখ কোটি টাকা দিতে চায় চিন” (China Wants to Give 1 Lakh Crore in 10 Big Projects), Prothom Alo, February 19, 2015.

294 World Bank, “Government of Nepal and World Bank Sign $75 Million Additional Financing Agreement for COVID-19 Vaccines,” Press Release, April 2, 2021, https://www.worldbank.org/en/news/press-release/2021/04/02/government-of-nepal-and-world-bank-sign-75-million-additional-financing-agreement-for-covid-19-vaccines.

295 World Bank, “World Bank’s $450 Million Road Support in Nepal to Spur COVID-19 Recovery,” Press Release, June 10, 2020, https://www.worldbank.org/en/news/press-release/2020/06/09/new-world-bank-strategic-roads-project-to-aid-economic-recovery-post-covid-19-in-nepal; World Bank, “Government of Nepal and World Bank Sign Financing Agreements of $350 Million (Around NPR 42 Billion) to Support Urban Development and Financial Sector Stability in Nepal to Boost Economic Recovery,” Press Release, November 18, 2020, https://www.worldbank.org/en/news/press-release/2020/11/18/government-of-nepal-and-world-bank-sign-financing-agreements-of-350-million-around-npr-42-billion-to-support-urban-development-and-financial-sector-stability-in-nepal-to-boost-economic-recovery.

296 Virtual interview with stakeholder 4E on Nepal, April 2021.

297 Md Shariful Islam, “China’s So-Called ‘“Debt Trap”’ and Bangladesh,” Financial Express, October 21, 2020, https://thefinancialexpress.com.bd/views/opinions/chinas-so-called-debt-trap-and-bangladesh-1603292664.

298 “EXCLUSIVE-Bangladesh Favours Japan for Port and Power Plant, in Blow to China,” Reuters, September 10, 2015, https://www.reuters.com/article/bangladesh-japan-china-idUKL4N11G2NG20150910.

299 Tuhin Shubhra Adhikary, “Two Rail Projects Face Uncertainty,” Daily Star, June 10, 2021, https://www.thedailystar.net/frontpage/news/two-rail-projects-face-uncertainty-2107933.

300 “न्यु खिम्ती–बाह्रबिसे प्रसारण लाइन : चिनियाँ कम्पनीसँग ठेक्का तोडियो” (New Khimti-Barhabise Transmission Line: Contract With Chinese Company Terminated), Kantipur, December 31, 2018, https://ekantipur.com/business/2018/12/31/154622789017363649.html.

301 “ऊर्जामन्त्रीले राजदूतलाई सोधे, ’चिनियाँ कम्पनीले नेपालमा किन काम ढिला गर्छन् ?” (The Energy Minister Asked the Ambassador, 'Why Do Chinese Companies Delay Work in Nepal?), Kantipur, June 25, 2019, https://ekantipur.com/news/2019/06/25/1561464897555623.html.

302 Saman Indrajith, “Proposed Law Will Turn Port City Into a Province of China – JVP,” Island Online, April 13, 2021, https://island.lk/proposed-law-will-turn-port-city-into-a-province-of-china-jvp/.

303 Nicholas Muller, “Rajapaksa’s Town: A Visit to Hambantota,” The Diplomat, January 9, 2019, https://thediplomat.com/2019/01/rajapaksas-town-a-visit-to-hambantota/.

304 “Locals Protest China-Sponsored Project in Damak,” Himalayan Times, January 1, 2021, https://thehimalayantimes.com/nepal/locals-protest-china-sponsored-project-in-damak.

305 Virtual interview with stakeholder 1D on Bangladesh, November 2020; virtual interview with stakeholder 5D on Sri Lanka, February 2021.

306 Virtual interview with stakeholder 4C on Nepal, March 2021.

307 “Bangladesh Thanks China, Seeks Larger Amount of Covid Vaccine Doses,” Dhaka Tribune, May 12, 2021, https://www.dhakatribune.com/bangladesh/2021/05/12/china-hands-over-half-a-million-doses-of-sinopharm-vaccine-to-bangladesh.

308 See Appendix 6: Top Sources of FDI in Focus Countries.

309 Narayan Adhikari, “Memories of 2015 Blockade Will Haunt Modi’s Nepal Visit,” People’s Review, May 9, 2018, https://www.peoplesreview.com.np/2018/05/09/memories-of-2015-blockade-will-haunt-modis-nepal-visit/; Shreya Paudel, “The ‘Unofficial Blockade’ Has Precipitated a Significant Shift in Nepal’s Relationship With Its Neighbours,” South Asia@LSE (blog), November 12, 2015, https://blogs.lse.ac.uk/southasia/2015/11/12/the-unofficial-blockade-has-propagated-a-significant-shift-in-nepals-relationship-with-its-giant-neighbours/; “Rajapaksa Says RAW Rallied Opposition to His Presidency,” Ada Derana, March 14, 2015, http://www.adaderana.lk/news/30125/rajapaksa-says-raw-rallied-opposition-to-his-presidency.

310 See Appendix 11: Comparative ODA in Focus Countries.

311 Shihar Aneez, “UPDATE 1-Sri Lanka Presidential Nominee Rajapaksa Would Restore Relations With China -Adviser,” Reuters, September 20, 2019, https://www.reuters.com/article/sri-lanka-gotobaya-china-idINL3N26B19J.

312 “Fact Sheet: Quad Summit,” White House, Statements and Releases, March 12, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/12/fact-sheet-quad-summit/.

313 “FACT SHEET: President Biden and G7 Leaders Launch Build Back Better World (B3W) Partnership,” White House, Statements and Releases, June 12, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/12/fact-sheet-president-biden-and-g7-leaders-launch-build-back-better-world-b3w-partnership/.

314 “Blue Dot Network,” U.S. Department of State, accessed August 6, 2021, https://www.state.gov/blue-dot-network/.

315 Virtual interview with stakeholder 5A on Sri Lanka, February 2021; virtual interview with stakeholder 4C on Nepal, March 2021.

316 Virtual interview with stakeholder 5H on Sri Lanka, November 2020; virtual interview with stakeholder 3A on Maldives, November 2020.

317 “Bangladesh on Track to Achieve Middle-Income Status By 2021,” UN Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and the Small Island Developing States, Press Release, accessed August 6, 2021, http://unohrlls.org/news/bangladesh-on-track-to-achieve-middle-income-status-by-2021/.

318 “Chinese Ambassador: About Time Bangladesh, China Signed FTA with Investment Deal,” Dhaka Tribune, June 9, 2021, https://www.dhakatribune.com/business/2021/06/09/chinese-ambassador-about-time-bangladesh-china-signed-fta-with-investment-deal.

319 Darren J. Lim and Rohan Mukherjee, “Hedging in South Asia: Balancing Economic and Security Interests Amid Sino-Indian Competition,” International Relations of the Asia-Pacific 19, no. 3 (September 1, 2019): 493–522, https://doi.org/10.1093/irap/lcz006.

320 Rupak Sapkota, “Nepal’s Conundrum in the Indo-Pacific Amidst the Emergence of the Great Power Rivalry,” Stosunki Międzynarodowe 56, no. 2 (2020): 111–24.

321 Asanga Abeyagoonasekera, "COVID-19: Desafíos internacionales y nacionales esperan a Sri Lanka", Observer Research Foundation, 15 de mayo de 2020, https://www.orfonline.org/expert-speak/sri-lanka-facing-geopolitics-of-covid-19-to-cold-war-2-0-66169/.

322 Kristen A. Cordell, "Chinese Development Assistance: A New Approach or More of the Same?", Carnegie Endowment for International Peace, 23 de marzo de 2021, https://carnegieendowment.org/2021/03/23/chinese-development-assistance-new-approach-or-more-of-same-pub-84141.



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