Nearly half of China’s investments in India’s neighbourhood went to PakistanDec 16, 2020 | 🚀 Fathership
China's investments and contracts remain cloaked in opacity, with virtually no official figures available, though reliable estimates showed $1.93 billion, or almost half of its investments and construction contracts in India's neighbourhood, had gone to its traditional ally Pakistan.
India's support for connectivity and development projects in the neighbourhood picked up pace soon after the border standoff with China emerged in the open in May, and New Delhi has pumped in hundreds of millions of dollars for key schemes and to extend financial support to the governments of countries such as Sri Lanka and the Maldives that were impacted by the Covid-19 pandemic.
According to figures collated by the American Enterprise Institute, which closely tracks China's investments and construction projects around the world, Chinese investments in India's neighbourhood this year included $1.93 billion in Pakistan, $1.25 billion in Bangladesh, $450 million in Sri Lanka and $280 million in Myanmar.
Amit Bhandari, a fellow at Gateway House who tracks China’s economic activities in the region, said the figures could be significantly higher, given the lack of transparency regarding such investments, especially by Chinese state-run firms.
"Recent estimates showed 60 per cent of the FDI in Pakistan, more than 40 per cent in Myanmar and more than 30 per cent in Sri Lanka came from China, which has a bigger cheque book to throw around. Such large investments in what aren't vibrant economies are aimed at generating geo-political influence but also lead to badly designed projects that make problems worse. For instance, rates for power generated by China-backed projects in Pakistan are 20 per cent to 50 per cent more than in India," he said.