1. NAME
:
Ms. H. V. D. Soysa
SUBJECT
:
South Asian Studies
STUDENT NO
:
PGD/12/A/39/E
LECTURE’S NAME
:
Dr. Sinharaja Tammita Delgoda
ASSIGNMENT NO
:
01 (Written)
TOPIC
:
Rising China’s growing presence in South Asia and the
Indian Ocean. Will this affect Indian hegemony in the
region?
ACADEMIC YEAR
:
2011/2012 (B)

2. Rising China’s growing presence in South Asia and the Indian Ocean.
Will this affect Indian hegemony in the region?
There is no doubt that this century is the “Asian Century” and super power crown is transforming
from West to the East and crown is floating in between China and India. China will take over USA in
2018 as the world’s largest economy, says an economic game published in December 31st edition of
the economist. India is nowhere near the two; interestingly at least, nowhere near China. The
Economic barometer is pointing towards a Chinese economic world no later than 2020. 1 And it is
important as both of the countries are finding stand up against “West”. By the time it will decide
whether it is China or India but as an Asian nation we can be in high spirits because at the end of the
day it is anyway Asia.
China and India have come long way since 1962, fought for brief boarder war. Both countries are
rapidly growing there economies, not only that but also they are increasing mutual trade and
bilateral relations. Both countries have different political systems, India is the world’s largest
democracy and China is still under communist government control. China and India, as the fastestgrowing of the ‘BRIC’ economies and making substantial and rapidly growing out put to the world.
2.4 billion people or 40% of the world population live in India and China and with such a human
power both countries are leading to become the world powers.
China is the fourth largest country by landmass and has a population of 1.3 billion people. It was
originally a sate-run economy, but after the death of Mao Zedong, Deng Xiaoping introduces major
economic transform that changed it from a state-run economy to a more capitalist economy. And
this influence China in magical way for its development.
China is the world’s fastest-growing major economy, with an average growth rate of 10% for the
past three decades years. (Wikipedia)
GDP (purchasing power parity): US$9.872 trillion (2010 est.)
GDP global rank
: #3 (behind the European Union and the U.S.)
GDP, real growth rate : 10.3% (2010 est.)
GDP, per capita
: US$7,400 (2010 est.)
Labor force
: 819.5 million (2010 est.), #1 global ranking
Population below the poverty line: 2.8%
[ Source: CIA World Fact Book, accessed 2011 ]
1
Bishwajit Okram. “ India vs. China – the elephant can not fly the dragon unless winged”, 12 January 2012
2

3. Figure 01: GDP (in trillion), Source World Bank: CIA Fact book 2010
As shown in the figure 01, in 2000, China topped Italy to become the world’s sixth-biggest economy. In 2005,
China overtook France to become the fifth-largest. In 2006, it moved up again by knocking off the U.K. In 2007,
China became the third-largest economy by topping Germany. During 1978-2006, China achieved an average
annual growth of 9.6% in real GDP. Two different ways are currently used to measure GDP: in nominal dollars
using official exchange rates and in PPP dollars using the actual buying power of currencies. Measured in PPP
dollars, China’s GDP in 2006 was $10.5 trillion, compared with $12.9 trillion for the US, $13.0 trillion for the EU,
$4.1 trillion for Japan, $3.9 trillion for India, $2.6 trillion for Germany and $1.9 trillion for the UK. China is the
third largest economic bloc after the EU and the US and the second largest economy after the US. 2
China is the world’s largest consumer and producer for many industrial and agricultural products such as steel,
cement, coal, television, cloth, cotton and etc. China has a drastic development in infrastructure development
and educational sector as well. To develop a country far most important thing is to invest in countries
education system. In 1978 China had only 598 Universities and it was only sufficient to facilitate 0. .4 Million
student, but in 2006 it had 1,800 universities and eligible to facilitate over 5 million student and sending
another 120,000 students abroad.
2
Shujie Yao, “Can China Really Become the Next Super Power”, The University of Nottingham, China Policy
Institute, April 2007
3

4. Figure 02: Top three countries by the Economic dominance
Most of the economist are predicting and forecasting that the China will over take US economy power in the
near future and will be the economic giant in the world. According to the Arvind Subramanian of the Peterson
Institute for International Economics argues that China's economic might will overshadow America's sooner
than people think. As per Arvind Subramanian in 2030 China’s economic power will be equal to the US
economic power was in 1973 and India’s economic power will matches the Japan’s was in 2010.
Indian Ocean
Indian Ocean is the Eastern boundary of the African continent reaches out to the Middle East by the
Persian Gulf washes the shores of the Indian sub-continent and links up with the South China Sea.
There is no secret that the “Great Game” of the century is playing and will play in the Indian Ocean
and for the Indian Ocean. Both emerging super powers are trying to dominate their power in the
Indian Ocean to gain the maximum benefit of it. But, why Indian Ocean? Indian Ocean is the key to
the seven seas. Indian Ocean has tremendous geo-strategic importance. It’s the lifeline of
international trade and links Atlantic with the Pacific Oceans and critical for global economic
prosperity. It carries the half of the world’s container ships, 1/3 of bulk cargo traffic and 2/3 of the
world’s oil shipments. Both India and China are running there trade with high volume with the
support of Indian Ocean. India’s mercantile trade is concerned almost 90% of it by volume and 77%
of it by value carried by sea.
China’s rapidly growing economy has made it increasingly dependent on foreign imports of fuel and
other raw material. China became the net oil importer in 1993, second largest consumer oil in 2003,
and the largest importer of oil by 2004. 3
3
Erica S. Downs and Jeffrey A. Bader, “Oil-Hungry China Belongs at the Big Table,” Brookings Institution,
September 8, 2006, at http://www.brookings.edu/opinions/2006/0908china_bader.aspx
4

5. In 2010, Chinese oil imports are expected to total 210 million tons, a 5.5% increase over2009
imports.4 Much of this oil is brought to china by tankers from Persian Gulf via the Indian Ocean and
the Strait of Malacca. So the Indian Ocean is becoming more important to Chinese economy and
security interest. Strait of Malacca which runs for 600 miles between Thailand, Malaysia and
Singapore to the east and Sumatra to the west in Indonesia. Some estimates that more than 50,000
ships pass through the Malacca strait annually, transporting 30% of the goods traded in the world
including oil from the Persian Gulf to major East Asian nations like China, Japan and South Korea. As
many as 20 million barrels of oil a day pass through the Strait of Malacca, an amount that will only
increase in the near future. More than 50% of Indian’s trade while more than 80% of China’s oil
needs go through the Malacca Strait; this makes the Strait one of the world’s most vital strategic
water passages.5
Figure 03: String of Pearls
China is into the strategy of “String of Pearls” with the mission of to protect its economy and security
interest and as well as to balance the “rising India”. This “string of pearls” (Figure: 03) strategy of
bases and diplomatic ties includes the Gwadar port in Pakistan, naval bases in Burma, electronic
intelligence gathering facilities on islands in Bay of Bengal, funding construction of a canal across the
Kra Isthmus in Thailand, a military agreement with Cambodia and building up of forces in the South
4
“China expects 5% Growth of Net Oil Import in 2010,” China Daily, March 22, 2010, at
http://www.chinadaily.com.cn/china/2010-03/22/content_9625216.htm
5
Johannes Dragsbaeks Schmidt, “India China Rivalry and Competition in Southeast Asia” at
https://docs.google.com/viewer?a=v&q=cache:DQAzxQnvWGsJ:vbn.aau.dk/files/61143145/India_China_Rivalr
y_and_Competition_in_Southeast_Asia_pres_in_Delhi.vbn_version.docx+india+china+rivary+and+competition
+in+southeast+asia&hl=en&gl=lk&pid=bl&srcid=ADGEESheRUOoCpywE0yCZJM9PbvrELpb_dOZhx6sIJRYnrGPEji
arRl4nQiAzlg4951J_Trd8dPM8c-8gItfL7FkEZBW3LtqnMB-yPXenpfaW6-jCY-Rto-E70WCeveaTOwwp1z7fnH&sig=AHIEtbSHKzrm6hCLC3il__23Bi8q3HWJxA
5

6. China Sea.6 These pearls are to help to build interconnection with several countries along the sea
lines from Middle East to the South China Sea in order to strengthen the strategic ties in between
China and other related countries as well as to protect China’s security objectives and energy
interest. China is built or building whole range of ports under the rim of the Indian Ocean. All these
ports are in the Indian Ocean and meet Indian Ocean. So China eventually through building these
ports, will gain the commercial maritime access along the round of the Indian Ocean and they bring
the energy, oil and natural gas from the Middle East all the way to Asia. China made a wise decision
with inverting in Gwadar port (in Balochitan) which could connect china with oil routes in Western
Pakistan. Pakistan’s highway in Karakoram provides the shortest route from Gwadar to the western
regions of china. This route is short, safe and can serve as alternative to the sea route through the
pirate prone Strait of Malacca, where currently China transports most of its crude oil imports.
China’s growing presence in South Asia
As a result of “String of Pearls “strategy of China, it has improve the involvement and presence in the
Indian Ocean rim countries. It is a geo-political as well as a geo-economical strategy. China is
improving its trade and investment relations with South Asian countries through treaties and
bilateral cooperation. Countries like Pakistan, Bangladesh, Maldives, Burma and Sri Lanka are
especially heighted under the China’s relations with South Asia.
Sino - Pakistan
Pakistan establishes its formal diplomatic relations with China in 1950, and Pakistan is the very first
countries to recognize the People’s Republic of China rather than the Republic of China. Since 1950s
Sino – Pakistan relationship still remains in a stable path. Once Sino – Indian relations deteriorated,
China and Pakistan had a further reason to bring into line against their common enemy.
While the two states have not formally aligned against India, both sides clearly benefit from a
relationship that can tie down significant Indian assets along multiple fronts and force Indian
planners to divide their attention. Thus there are reports that, in the midst of the 1965 IndoPakistani War, China repeatedly charged Indian with violating the Chinese border near Sikkim, at the
other end of the Sino-Indian border from Pakistan, raising the specter of an armed response.7 China
is an arms supply for many Asian countries and so in a same way China helped Pakistan with arms
6
For a detailed explication of the security ramifications of the Chinese “string of pearls” strategy, see Gurpreet
Khurana, “China’s ‘String of Pearls’ in the Indian Ocean and Its Security Implications,” Strategic Analysis, Vol.
32, No. 1 (January 2008), pp. 1-22.
7
For example, see Claude Arpi, “1965 War: The China Bluff,” Rediff, September 30, 2005, at
htt://www.rediff.com/news/2005/sep/30war.htm
6

7. development and access. China has provided the Pakistani military range of military systems,
including tanks, naval combatants and combat aircraft. For example, china and Pakistan currently coproduce the K-8 trainer and the JF – 17 Thunder/FC – 1 Xiaolong. More than that Chinese assistance
with missile and nuclear weapons are in to the greater concern. China has supplied Pakistan with
the M-11 series of short range ballistic missiles. China has helped Pakistan build two nuclear reactors
at the Chasma site in the Punjab Province and is considering building two more nuclear reactors at
the same site.
One of the first planks of Sino-Pakistani relations was economic, with trade relations started in 1950.
China and Pakistan signed a Free Trade Agreement (FTA) in 2006, as well as other numerous
agreements and MOUs, including Bilateral Investment Treaties (BIT) to increase the mutual trade
and investment between two countries. Pakistan provides china with cheap raw materials and the
use of Pakistani ports in return for access to Chinese markets through preferential treatment under
FTA. By 2002, bilateral trade amounted to some $ 1.8 billion, and has since grown to some $7 billion
as 2008.8 Same time china provided both financing and labor for the Gwadar port’s development.
(Further discuss in the next secession). Pakistan has a potential to become a hub in the region and
china may get more opportunity to grab the benefit from that.
Sino – Sri Lanka
China also has a long history of peaceful relations with Sri Lanka. Sri Lanka was one of the first noncommunist countries to establish relations with China by signing the Rubber – Rise agreement
(1952). In 2005 China and Sri Lanka signed a Joint Communiqué to further bilateral relations and
provide each other Most Favored Nation (MFN) treatment.
It is not surprising that China has provided Sri Lanka with military and political support during war
era, including significant supplies of fighter aircraft, naval combatants and a variety of other military
equipments. China has offered Sri Lanka funds in the form of Aid and Preferential credit for various
development purposes. China is the first foreign country to have an exclusive economic zone in Sri
Lanka and is involved in a range of infrastructure development projects (constructing power plants,
modernizing railways, providing financial and technical assistance in launching of communication
satellites). “China is the leading investor in Sri Lanka and involved in building highways, bridges, a
new shipping port and airport as well as a high tech theater.” In the post war period, improvements
8
People’s Republic of China, Ministry of Foreign Affairs, “China – Pakistan Relations,” China Daily , November
14, 2006, at http://www.chinadaily.com.cn/china/2006-11/14/content_732562.htm
7

8. in infrastructural development and investments from China in Sri Lanka have been seen to increase.
These commercial transactions have created a win-win deal for both countries. Significantly, “Beijing
has decided to grant Sri Lanka dialogue partner status in the Shanghai Cooperation Organization
(SCO)” (‘Growing Chinese influence in Sri Lanka’, The National, 8 June 2011). China has been
continuously in economic cooperation as well. Two main ongoing projects are Norochcholai Coal
Power Project and construction of a large container port at Hambanthota, with $ 300 million in
funding from China’s Export – Import Bank. Equally important, Chinese support has the added
attraction that Beijing doesn’t “interfere” in the domestic affairs of the nation receiving the aid. This
appeal has been at work not only in Sri Lanka, but also in Pakistan and Burma. 9
Relationship with Other South Asian Countries
China and Bangladesh, both countries granted each other Most Favored Nation (MFN) treatment in
1984. China doesn’t have a FTA with Bangladesh. China provides duty-free access to a list of
Bangladeshi products under the Asia-Pacific Trade Agreement, and Bangladesh had offered oil
exploration rights to china at Barakpuria. China had also gained naval access to the Bangladeshi
Chittagong port, which will bring china closer to Myanmar oil fields and the seas around India.10
China has constructed six friendship bridges, one of the bridges completed in 2008, is very important
because it connects the northern and southern part of Bangladesh.
China is one of the few states who are willing to support Burma. Burma’s Irrawaddy Valley has been
a strategic path to China. More than that Burma has potential oil and natural gas reserves. The
ability to access those oil reserves would gain limit Chinese vulnerability to interdiction of its sea
lines. Not surprisingly, china is helping to construct oil pipelines across Burma and into China. It is
also helping to construct new port facility in Sittwe, Dawei and Mergui.11 China has been engaged in
numerous security cooperation measures in Burma and China is the largest source of arms for
military, supplying a variety of systems, including trucks, artillery and communication equipments.
Burma is lying to the east of India and one of the potential area to worry about the involvement of
China.
9
Dean Cheng, “China’s view of South Asia and the Indian Ocean”, Heritage Lectures, Published by the Heritage
Foundation, August 31, 2010
10
Pravakar Sahoo,IEG and Nisha Taneja, ICRIER, “China’s growing presence in India’s neighborhood”, East Asia
Forum, February 5,2010 at http://www.eastasiaforum.org
11
Sutirtho Patranobis, “ China Creates a Pear in Sri Lanka,” Hindustan Times, September 16, 2009, at
http://www.hindustantimes.com/special-news-report/News-Feed/China-creates-a-pearl-in -Sri_Lanka/Article454644.aspx
8

9. India is highly concerned about china’s growing relations with South Asian countries because India
feels it as a threat for their journey towards the super power. There was an era that India was seen
as the guardian who would lead South Asia to the growth but not anymore. Some of the South Asian
countries have unsolved issues and problems with India. Especially Pakistan and Bangladesh have
unresolved issues regarding multilateral trade and economic relations. Some of the issues are
geographical, like land boarder sharing or territorial water issues and some are political. As an
example Sri Lanka has many issues with India, such as territorial water issue, Tamil Nadu factor and
also it is not a secret that India supported LTTE in many ways during the war period. Also there are
some economic issues between India and its neighbors. Countries like Bangladesh and Sri Lanka have
accused India of creating barriers against their exports. Although Sri Lanka has an FTA with Sri Lanka,
Sri Lanka has issues with India over easier entry, caps on imports and Rules of Origin. Bangladesh
accuses India of non-traffic barriers to trade and protectionist ant-dumping measures against its
exports. Bangladesh also complains against restrictions on trade due to allotting deferent goods to
specific ports for Custom clearance, as well as discrimination against Bangladesh at Petrapole. 12 So
its clear that India has unsolved issues with its neighbors and it makes negative impact towards
India’ s relations in South Asia and directly it makes positive impact towards China. May be as a
result of that China’s trade with South Asian countries has been rapidly growing up though it was
India who has been the major trading partner with its neighbors traditionally.
12
Pravakar Sahoo, IEG and Nisha Taneja, ICRIER, “China’s growing presence in India’s neighborhood”, East Asia
Forum, February 5,2010 at http://www.eastasiaforum.org
9

10. Conclusion
India and China both rising powers of the 21st century belong to the Asia, both struggling to
dominate their power in the Indian Ocean. As motioned above Indian Ocean is playing the most
important role in the century. Indian Ocean is the key of seven seas. Zhao Nanqi, former Director
General, General Logistics Department of the People’s Liberation Army(1993) “We can no longer
accept the Indian Ocean as an ocean only of the Indians”. According to the geographical situation at
a glance anyone would feel Indian Ocean as a part of India or property of India. It is true that the
more than 2/3 of the Indian land is open and touching the Indian Ocean. But it doesn’t mean that
Indian Ocean is a property of India. Recently, an Asian scholar based in the West (Dr.Toshi Yoshihara)
analyzing Chinese writings on Indian Ocean states that in China Mahan is quoted as having said
“Whoever controls the Indian Ocean dominates Asia. This ocean is the key to the Seven Seas. In the
21st century the destiny of the world will be decided on its waters.”
China is already in to the great game with the goal of dominating the power of Indian Ocean. They
have a geo-political and geo-economical strategy for that. This will affect Indian hegemony in the
region. It is true and proven that some of the Asian countries, like Pakistan, Sri Lanka and Burma
have many unresolved issues with India. The smaller nations (Sri Lanka, Nepal and Bhutan) need
India’s assistance with development and solving internal problems, but if India doesn’t proactively
assume leadership in this area, and continues to protect its industries and businessmen from
international trade, this opportunity will slip away and spur Chinese interference in the region. 13 So
as a result of that China is successfully filling the vacuum. By building the “pearls” in the Indian
Ocean China is decreasing its dependency in Strait of Malacca. And all these small nations are
growing their good heart towards the China. More importantly China is not normally involved in
domestic political issues when sometime India violating. So these small nations have the freedom to
behave around there domestic political arena. One of the earliest strategic analysts known for his
knowledge and understanding of Indian history, K M Panniker, wrote in the early 1940s, before India
achieved its independence, that “the peninsular character of the country and the essential
dependence of its trade on maritime traffic” would give Indian Ocean a preponderant influence on
its destiny, and “the economic life of India will be completely at the mercy of the power which
controls the seas”. He also held that “India never lost her independence till she lost the command of
the sea in the first decade of the sixteenth century”, and thus the future of India would depend not
on its land frontiers but “on the oceanic expanse which washes the three sides of India”. Ashok K.
Behuria, “Cooperation in Indian Ocean: An Indian Perspective”, Galle Dialog, December 14, 2012
13
Pravakar Sahoo, IEG and Nisha Taneja, ICRIER, “China’s growing presence in India’s neighborhood”, East Asia
Forum, February 5,2010 at http://www.eastasiaforum.org
10

11. Indian Ocean is sorted as the World’s energy inter-state and China will have maritime presence and
perhaps even naval presence. In all these Asian counties most of them Pakistan, Myanmar and Sri
Lanka, Chinese have given significant amount of military aid and economic aid as well as building
above mentioned ports. As China will eventually have very close relationship with these countries
and so the Beijing Navy can make regular port visits all of these countries and most of the times
Chinese will able to use these ports’ maritime commercial facilities. This will give China two Ocean
presence the Western Pacific and the Indian Ocean.
India is still behind the China and long way to go to surplus in China as China also improving its
power day by day. China’s economy is roughly 3.5 times bigger than that of India and China is now
India’s number one trading partner with bilateral trade increasing from under $ 3 billion in 2000 to
almost $ 52 billion in 2008, and is growing almost three times the rate of US- China Trade (Hallinan
2010). Also India is depending on China, it is really important for India to balance the China’s rising
power. It is a norm that to take something you have to give something. China is spreading its arms all
over the Asian region, specially the Indian Ocean rim countries. So when the time comes there is a
more probability for China to take the benefit of spreading the good relations among the Asian
region. This is a threat for India’s hegemony. It is highlighted that India has lost its good handshake
with most of these Chinese friendly countries. It is a good example that the decision of Myanmar to
sell the gas from fields where India has made an investment. It made India really disappointed
among its own region. India had only been looking at the possibility of routing the pipeline through
the Northeast Region.
Hegemony is depending on the power, perception and the leadership. There is no doubt that China
has already gain the power; economic, military and energy and to be the super power in the world.
In some cases India also depending on China. As motioned earlier great game of the century is
playing in the Indian Ocean and who ever dominate the power in the Indian Ocean will be the
winner. By spreading the friendly arms China already acquire the good perception all around the
world especially from the Asian region and also China is leading by standing with the small nations
where they really need the powerful hand where India highly ignored. So with the time China will
dominate its power within the Indian Ocean with the support and help of the South Asian friendly
nations.
11

12. References
Harsh V. Pant, “ China’s new ties with Maldives, Seychelles, Sri Lanka sink India’s influence over
Indian Ocean, YaleGlobal, January 9, 2013
Bishwajit Okram, “India vs. China – the elephant can not fly like the dragon unless winged”, January
12, 2012
J. Mohan Malik, “South Asia in China’s Foreign Relation”, Pacifica Review, Volume 13, Number 1,
February 2001
12