China

CHINA WOOS BHUTAN WITH $10 BILLION IN STANDOFF WITH INDIA

01 Sep 2017/Friday

After being locked in a two-month long border standoff with India and tiny Bhutan in the heights of  Himalayas, China is offering $10 billion in economic assistance to soften its stance. This may be seen as an offer to Bhutan to tone down its allegations that China is violating its territorial integrity.

The development may complicate Indo-Bhutanese relations, which blocked Chinese troops after Bhutan, India’s long-time security ally, notified New Delhi that the Chinese troops were attempting to construct a road in a part of the Doklam Plateau claimed by both China and Bhutan. Accusing each other of violation both the countries had a face-off since June. Hence, China wants to win over Bhutan to gain more credibility in the stand-off.

In June, Bhutan’s foreign ministry had already blasted China, saying that the construction work violates an agreement between the two countries. China is seen clearly wooing Bhutan in order to validate its presence in Doklam, wherein, India is seen to have sent troops only after Bhutan claimed that China had started construction work in Bhutanese territory. Beijing hopes that Bhutan will relinquish its claim to the disputed area, thereby obviating the need for Indian troops, which would then be violating Chinese territory.

Chinese Track Record in the region

The Chinese track record of similar loans with another Himalayan country Nepal has not been good.

In August 2012, the Nepal Electricity Authority (NEA) and CWE Investment Corporation, subsidiary of CTGC, signed an MoU to construct the hydropower project on river Seti. As per the MoU, the Chinese and Nepalese will have 75:25 Stake in the project with an estimated cost of $1.6 Billion. The NEA board immediately approved the agreement, but the Chinese did not move ahead until 2017, when Nepalese government threaten to pull back.

Similar is the fate of Kulekhani Dam project has three stages was scheduled to be completed costing about US$117.84 million. Construction work started in 2008 to be completed in 2011. Inspite of repeated warnings by the Nepalese govt the Project is yet to be finished by the Chinese contractor.

In the backdrop of Chinese failures in Nepal and other regional countries like Sri Lanka, Bhutan will have to decide which friend to choose: an age old friend or a friend with a lucrative bargain offer, which may not be beneficial to Bhutanese interest in the long run.

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