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China has India surrounded in their new Great Game

One after another, Beijing is pulling South Asian governments into its orbit

Nikkei illustration

NEW DELHI Think of South Asia as a giant Othello board. The squares are countries and slices of coveted territory. The players trying to cover the board with their black or white pieces are China and India.

In the current round, China is winning.

The latest square to come under Beijing's sway is Nepal, where a new pro-China government will be sworn in at the beginning of 2018. This marks a major change for the country, nestled in the Himalayas between the two ascendant regional powers. The incumbent Nepalese government has maintained a pro-India stance.

In a landmark election held over two stages -- on Nov. 26 and Dec. 7 -- Nepal's Communist coalition parties scored a crushing victory to regain power. Although high-ranking officials of the leading Communist Party of Nepal (Unified Marxist Leninist) have said they will maintain relationships with both China and India, they are not hiding their intention to break away from New Delhi's "micromanagement."

Economically, India-Nepal ties run deep: Nepalese citizens are allowed to work in India without visas. Imports from India account for 60% of Nepal's total.

In contrast, Nepal relies little on China in part because Mount Everest stands in the way, limiting access between them. But China's ambitious, regionwide infrastructure development drive could help overcome that obstacle.

The power shift in Nepal came at "the prodding of China," said R.S.N. Singh, a former officer of India's intelligence agency. Beijing's "desperation" to play a bigger role in Nepal, Singh suggested, "was linked to India's tough and uncompromising position during the Doklam faceoff," in which Chinese and Indian troops stared each other down at the tri-junction with Bhutan from June to August this year.

Nepal is hardly the only country in India's neighborhood drawing closer to China. Until recently, many of these neighbors had been tough negotiators, playing the big rivals off each other to secure sweeter offers of financial support and other assistance. But much to India's dismay, countries seem increasingly inclined to simply move into China's orbit.

Myanmar is another example.

"[Our countries should] nurture new growth points, such as discussing the construction of a China-Myanmar economic corridor, so as to advance bilateral ties," Chinese President Xi Jinping told Myanmar's State Counselor Aung San Suu Kyi during her state visit to Beijing on Dec. 1. Suu Kyi, for her part, "agreed with China's proposal" for the corridor, Xinhua News Agency reported.

Khadga Prasad Oli, left, the chairman of the Communist Party of Nepal (Unified Marxist Leninist), shakes hands with Communist Party of Nepal (Maoist Centre) leader Pushpa Kamal Dahal in Kathmandu on Dec. 17.   © Reuters

It seems like a natural fit, especially now: With Myanmar facing heavy international criticism over persecution of its Rohingya Muslim minority, China is probably the only partner willing to offer crucial infrastructure support without interfering with the sensitive human rights issue. The envisioned corridor would stretch to the Indian Ocean, giving China a second access point, on top of a planned corridor in Pakistan.

Score one for China in the Maldives, too.

On Nov. 29, the Maldivian government called an emergency parliament session and hastily passed a free trade agreement with China while the opposition parties were absent. The 1,000-page document received the rubber-stamp treatment: "The agreement was sent to the parliamentary oversight committee on national security affairs within three minutes of submission to the floor," said Hamid Abdul Ghafoor, a spokesperson for the opposition Maldivian Democratic Party. "The committee vetting the agreement took less than 10 minutes."

MILITARY TOEHOLDS Over the past several years, Maldivian President Abdulla Yameen has been pushing aside one political foe after another. He appears to see China as a helpful partner in cementing his grip before a presidential election next year.

The pact gives China two free trade agreements in South Asia, after its accord with Pakistan; Beijing is negotiating one with Sri Lanka as well.

"The negotiation and signing of the China-Maldives free trade agreement are ... in line with the trend of economic globalization," Chinese Foreign Ministry Spokesperson Geng Shuang told a news conference on Dec. 6. But few are taking this at face value. Deeper economic ties often have a military angle.

"There is a possibility that they may set up a naval base there in [the Maldives'] Gadu island," said Manoj Joshi, a distinguished fellow at the Observer Research Foundation, a think tank in Delhi.

Joshi noted that Gadu is next to the island of Gan -- where the British navy had a base during World War II -- and that the deep water is well-suited for a "submarine base."

Two years ago, he added, the Maldivian government "changed its law about island reclamation."

"Like [China is] doing in the South China Sea, the Maldives said, 'If you can make a certain level of reclamation, then you can own that island.'"

The Chinese navy set up its first overseas base in Djibouti this past August, and Joshi said Gadu, in the middle of the Indian Ocean, could serve a similar purpose.

An aerial view of Male, the Maldives' capital. The island country recently approved a trade deal with China.   © Reuters

At this point, China has plenty of naval base candidates to choose from -- all around India. Sri Lanka's port of Hambantota and Pakistan's port of Gwadar top the list. Sri Lanka, which had seen its debt to China swell, earlier this month granted Chinese companies a 99-year lease on Hambantota by converting debt to equity.

Gwadar, which is already run by a Chinese company, "will become a naval facility for China," Ashok Kantha, India's former ambassador to China, warned bluntly. Like Sri Lanka, Pakistan has seen its debt to China increase, with the Chinese side covering most of the cost of the estimated $62 billion corridor project. There is speculation that Pakistan could eventually face insolvency.

INDIAN PUSHBACK India, of course, is not sitting idly by as China entrenches itself all over the region.

The standoff in Doklam was the closest the countries had come to a military clash in the last half century, partly because India refused to let its rival have its way. China had started building a road in an area also claimed by Bhutan, only several hundred meters away from India. New Delhi dispatched troops to stop the project, resulting in a hair-trigger situation that lasted two months.

India has been flexing its military muscle in other ways, too. Prime Minister Narendra Modi on Nov. 22 praised the Indian Air Force: "Delighted on the successful maiden test firing of Brahmos ALCM from Su-30MKI. Congratulations to all those associated with this remarkable feat."

Modi was referring to the first test of a supersonic, air-launched cruise missile fired from a fighter jet over the Bay of Bengal. With China pushing into the Indian Ocean, India is keen to show it is capable of pushing back.

"The Strait of Malacca also is covered in its range, if the missile is fired from Andaman and Nicobar Islands," an Indian defense official told the Nikkei Asian Review, explaining the significance of the test.

The strait is a gateway to the Indian Ocean for China, making it a prime target in the event of a military clash. Bringing the area within missile range could help prevent China from sending reinforcements -- crucial when you consider China's naval power advantage.

But even with such missiles, India is no match for China when it comes to weaponry and military spending. The Chinese economy is nearly five times larger than India's, and New Delhi simply does not have the financial resources to bring neighbors to its side.

What, then, can New Delhi do?

Its strategy seems to be to make low-key moves that, taken together, could help contain China. In August, India began negotiating a 40-year lease of Mattala Rajapaksa International Airport in Sri Lanka, near Hambantota. The airport has little commercial value: Its claim to fame is that its passenger traffic is among the lowest in the world.

Yet India is eager to sign the deal because it would give China something to think about. It would not take much to turn the airport into an air base in a crisis. Meanwhile, over in Bangladesh, a plan to have China back the development of the port of Sonadia appears to have been scrapped. Rumor has it Indian diplomatic pressure played a role in the decision.

So while China's gamesmanship has put India on its heels, New Delhi seems to be flipping at least a few of those Othello squares back in its favor.

Some countries that have strengthened their ties with China may be having second thoughts about relying on the superpower.

Trucks carry India's new BrahMos missile system during a Republic Day parade in New Delhi on Jan. 26.   © Getty Images

"There needs to be greater transparency on how [the China-Pakistan corridor] will impact the competitiveness of existing domestic industries and the safeguards that will be deployed to prevent it becoming a channel for cheap imports," the Pakistan Business Council recently said of the China-led infrastructure plan.

Ghafoor, the Maldivian opposition spokesman, said, "We are deeply concerned that further entrenchment of the country into a Chinese debt trap will result in additional stress on strategic national assets and increasing instability in the Indian Ocean region."

China sounds confident it can overcome such worries -- even in India itself. "We believe that as long as we continue to engage in in-depth strategic communication and promptly dispel strategic misgivings, the strategic value of China-India cooperation will speak for itself, and there will be a prospect of 'the dragon and the elephant dancing together,'" Chinese Foreign Minister Wang Yi said in a speech on Dec. 9.

But with the "dragon" steadily encircling the "elephant," is there any chance they can avoid stepping on each other's toes?

"The 21st century is Asia's century," Modi tweeted after Wang's remark. "Our Government accords highest importance to the Indian Ocean region, guided by the principle of Sagar -- Security And Growth for All in the Region."

This could be a rather tense tango.

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