Security

What Happened: Bhutan has long had border disputes with China in the west and northeast. But in 2016, China quietly began building villages in what used to be uncontested Bhutanese territory. As Robbie Barnett documents in a special report for The Diplomat, “there are 22 such villages and settlements built by China within Bhutan’s customary borders… To construct these villages, China has annexed 2 percent of Bhutan’s territory.” And, most concerningly, “there is no sign that Bhutan can do anything about it – or that China will face any costs for doing so.”

Our Focus: In his analysis, Barnett distinguishes between the eight Chinese villages constructed in western Bhutan and the 14 built in northeastern Bhutan. The long-disputed western area touches on the strategically vital region of Doklam, “possession of which would give China major strategic advantage in its ongoing confrontations with India.” The northeastern villages, by contrast, are being built in what used to be undisputedly Bhutan’s territory, as shown even by official Chinese maps through the 1990s. In essence, Barnett writes, China’s claims in northeastern Bhutan were meant to compel Bhutan to give up Doklam: “the Chinese villages in the northeast were built within Bhutan’s customary borders as a threat: if Bhutan didn’t agree to the package deal and yield the western areas, the threat implied, it would lose the northeastern areas too.”

What Comes Next: China’s gambit didn’t quite work – Bhutan is treaty-bound to consult India on any resolution of the border dispute with China, giving New Delhi veto power over Bhutan ceding Doklam. But China has paid no price for its annexation of Bhutanese territory, not even reputationally. Bhutan’s government was so unwilling to rock the boat with its larger neighbor that it first ignored the encroachment, then insisted that the villages were being built on Chinese soil – effectively ceding the occupied areas to Beijing. Meanwhile, the pace of construction has picked up: “At the end of 2022, there were 14 villages and settlements, built over six years. But in the 18 months since early 2023 seven more have been built, and three existing villages have been majorly expanded.” Ultimately, Barnett concludes, “China may not end up with control of the southern ridge at Doklam, but its cross-border actions elsewhere in Bhutan have already demonstrated the effectiveness of land appropriation as a cost-free means for a major power to extract concessions from a smaller neighbor.”

INTERVIEW

Audrye Wong – Jeane Kirkpatrick Fellow at the American Enterprise Institute and assistant professor of Political Science and International Relations at the University of Southern California – on China’s overseas information campaigns: “The Chinese state has fine-tuned its ability to control information flows within China through censorship, diversion, and structural intervention into media platforms. It is marshaling these resources outward, targeting foreign public audiences as well as overseas Chinese audiences.”

Northeast Asia

On October 14, China held a day of military drills surrounding Taiwan. The exercise, involving all branches of China’s armed forces, was shorter than a previous iteration in May 2024, but reportedly involved an unprecedented number of incursions by PLA aircraft into Taiwan’s air defense identification zone. Ostensibly, the drills were a response to the “provocation” of Taiwanese President Lai Ching-te’s National Day address; most foreign observers, however, viewed his remarks as relatively restrained, embracing the “Republic of China” framing that Lai’s DPP has often shunned.

South Asia

On October 15 and 16, Pakistan is hosting the summit meeting of the Shanghai Cooperation Organization’s Council of Heads of Government – not to be confused with the higher-profile heads of state summit held each year. The diplomatic spotlight comes at an awkward time for Pakistan, shortly after a terrorist attack killed Chinese nationals in Karachi. Meanwhile, supporters of the opposition party PTI continue to hold mass rallies against the current government. Islamabad will be hoping to distract from its domestic turmoil with some diplomatic acumen, especially as India’s S. Jaishankar is in attendance. It’s the first visit by an Indian minister to Pakistan since 2015.

Southeast Asia

Indonesian President-elect Prabowo Subianto will be sworn into office later this week, eight months after a decisive victory at the polls. The former general, 73, had previously run twice unsuccessfully against current President Joko “Jokowi” Widodo, in 2014 and 2019, but now counts Jokowi as an ally, having served as his defense minister since 2019 and appointed his son, Gibran, as his vice-presidential running mate. Much speculation has attended Prabowo’s choice of cabinet, which will be announced after his inauguration, although he has confirmed that current Finance Minister Sri Mulyani Indrawati, a former managing director of the World Bank, will stay on in her role for his first term – an early indication that the Prabowo administration will be marked by continuity with its predecessor.

Central Asia

China has adopted three core tools in its strategy with foreign governments in South and Central Asia: strategic messaging; adapting to local customs; and flexible repayment of loans. The strategy, put into operation via the Belt and Road Initiative, is flexible enough to suit different circumstances across the region and has powered China’s rising influence.

Source: Central Bank of Sri Lanka and IMF Staff Report for second review of EFF, 2024

Sri Lanka’s government revenue as a percentage of GDP has fallen dramatically over the years. Boosting that ratio is a major goal of the current IMF program.

Diplomacy

Vietnamese for “more friends, fewer enemies,” and a foreign policy mantra for Vietnam’s government since the end of the Cold War.