THE DRAGON'S REACH

The Indian Ocean has become the latest arena for geopolitical manoeuvring, hosting almost 40% of the world’s energy supply through the key sea routes. The presence of 38 littoral states, important sea lines of communications (SLOCs) and the three of the most traversed maritime chokepoints furthers the immense strategic importance of the Indian Ocean. 

China, although not a littoral state in the Indian Ocean Region (IOR), has amassed geopolitical influence through their economic domination as well as guanxi diplomatic strategies. China is heavily relying on the maritime route in the IOR for its growing economy, with nearly 80% of their imported crude oil passing through the Strait of Malacca. China’s emergence as a key player in the Indian Ocean has coincided with their economic growth, developing a 900-billion-dollar trade volume with countries in the IOR. Their position as the top import and export partner of the IOR is exacerbated by the largely ubiquitous membership of IOR states in the Belt and Road Initiative (BRI). China maintains diplomatic ties and a dominant military presence across the Indian Ocean. 

This paper explores Chinese influence operations  (IOs) in the IOR, with a focus on the use of soft and sharp power strategies. It provides a detailed analysis of the key characteristics of these operations, offering a clear framework to understand their scope and intent. By evaluating the effectiveness and impact of these activities, the brief highlights China's growing capacity to alter regional stability and power dynamics. Understanding these developments is crucial for assessing Beijing’s long-term implications for geo-political security and policymaking in the region.

Defining Influence Operations

Similar to most modern security and intelligence threats, “influence operations” does not possess an internationally recognised and accepted definition, and remains critically understudied. This lack of definitions leads to significant differences in perspectives from different scholars. The existing research attempting to define IOs often relies upon Western researchers studying the clandestine operations from non-Western adversarial states. The American Department of Defence (DoD), becomes the Western authority for this definition, and defines IOs as “the coordinated, integrated, and synchronized application of national diplomatic, informational, military, economic, and other capabilities in peacetime, crisis, conflict, and post conflict to foster attitudes, behaviours, or decisions by foreign target audiences”.

However, leading non-Western scholars attempt to re-define IOs through more meaningful interventions, focusing upon key aspects of non-military means. Scholars, therefore, define IOs as “the use of non-military means of psychological, informational and political influence and subversion to undermine the security and governance of a targeted country”. Chinese scholars, however, do not provide a concrete definition of IOs. But, Instead, they often ignore such activities as a method to propagate the media arm of the “Three Warfare” policy. Notably, Chinese scholars often equate these IOs as a necessary arm of modern warfare strategies, an alternative to traditional warfare. 

With these definitions, it is possible to isolate certain criteria to identify IOs. Firstly, these operations may involve the use of military or economic assets of a country, but no direct use of hard power. Secondly, most operations are often insidious, although some use the element of fear and explicit danger to its advantage. Finally, the intention behind such operations is often to project force and dominance and develop beneficial foreign sentiments to further one’s national interest. 

Infrastructure as Influence: The “String of Pearls” Strategy

Colonel Dai Xu, in 2009, made a statement about the need to develop Chinese military bases in the Indian Ocean and the Pacific Ocean as a logistical asset for the People’s Liberation Army Navy (PLAN). These sentiments, corroborated by the ‘anti-piracy mission’ in the Gulf of Aden in 2008, solidified the arguments presented by B.A. Hamilton in 2004. Termed as the “String of Pearls” strategy, Hamilton posited that Chinese investments in seaports across the littoral area in the IOR can be connected as naval bases to gain control over the key SLOCs in the region. These investments, while nominally for commercial and economic objectives, are deliberately positioned to provide dual-use capabilities, allowing them to be transformed into military bases during times of conflict or heightened geopolitical tensions.

Image 1: Chinese Developments Across the Indian Ocean (Reddy, 2022)

The ports mapped in Image 1 show China's presence in IOR using its String of Pearls strategy. This strategy has become the leading Chinese policy to enhance their control over the Indian Ocean through the creation of “pearl” ports, or Chinese-funded or operated ports. Several aspects of this strategy required the involvement of IOs and extensive diplomatic efforts, including presenting China's proposals for economic aid, facilitating the construction and utilization of strategically located ports through its BRI. The rise of “pearl ports” began in 2017, when China unveiled a PLAN support base in East Djibouti- a strategically important state on the horn of Africa. This base oversaw the Bab-El-Mandeb chokepoint and guarded the SLOCs passing through the Suez Canal, with a dock capable of housing aircraft carriers and nuclear submarines. This has threatened the security of commercial shipments passing through the chokepoint. Moreover, the dual-use facilities provided by the Gwadar Port in South Pakistan since 2021 and the Hambantota Port in Sri Lanka, where China holds a 99-years long lease, exacerbates the problem. The strategic location of these ports on key SLOCs in the Indian Ocean enhances China’s strategic influence by providing a dual-use infrastructure for military or commercial purposes, ensuring effective militarization in the IOR.The “Sea Guardian 3” joint military exercise between the Pakistani Navy and PLAN is a crucial case study to analyse China using the asset-based military IO. The nine-day exercise in 2023 involved a conventional submarine, a guided missile destroyer and two frigates from the PLAN, thus proving their ability to compete with the traditional naval powers in the IOR. This military exercise was the third and largest edition of the bilateral naval exercise, indicative of the increase in Chinese military presence in the region since 2008. 

Moreover, the presence of a Chinese ballistic missile and satellite tracking survey ship  at Sri Lanka’s Hambantota port shows how China also uses these ‘pearls’ to counter expressions of military practices of other traditional powers. By strategically investing in dual-use ports and leveraging the BRI projects, China has bolstered its naval reach to challenge the power of the littoral states in the IOR. This approach not only secures key SLOCs, but also disrupts the balance of power in the IOR by undermining the traditional Indian regional dominance. While the strategy has enhanced China's influence in the IOR, its success depends on sustained economic partnerships, regional acceptance, and the ability to navigate growing international scrutiny and resistance.

Leveraging Trade and Ties

Economic dependence has always been a driving factor for most states to define their foreign policy objectives. For a country like China, which focuses on advancing their market economies most efficiently, economic concerns have been crucial in selecting and decoding foreign policy objectives. Therefore, China often uses IOs to build economic dependence as well as develop trade ties to advance its interests. Beyond the obvious economic and geopolitical benefits, a compelling argument is the security of Chinese ships carrying crude oil from the Middle East countries, traversing through the chokepoints in the IOR. With the tension rising in the South China Sea, China is concerned about the potential cross-strait war between China and other claimant states like the Philippines and others. This has, thus, necessitated Chinese IOs in the IOR. 

Moreover, China’s exponential rise as a trading partner and a creditor for emerging economies, especially in the IOR, has allowed China to strategically leverage their robust economy by expanding global trade, providing grants and loans, and substantial lines of credit to these developing countries. From 2008-2021, China’s development finance institutions (DFIs), the China Development Bank (CDB) and the Export-Import Bank of China (CHEXIM), provided approximately $500 billion in overseas development finance (ODF), an amount nearly on the scale of the World Bank lending during the same time period. Moreover, China’s global trade has tripled in the last two decades (4.7% in 2002 to 12.7% in 2022), and has now become the top trading partner of over 120 emerging economies. China is the top import partner for twenty-four countries in the IOR, and the top export partner for thirteen countries. Furthermore, China’s dominant position as the largest economy in the Regional Comprehensive Economic Partnership (RCEP) has amplified their influence.

On top of this, Chinese commercial and sovereign loans, issued by the CHEXIM and the CDB, ballooned to around $180 billion in 2015 in key industries such as mining, energy and transport, with Asian and African partners accounting for roughly 60% of the loans. Some states, including Laos, Pakistan, Nigeria, Turkey and Sri Lanka, depend on short-term “rescue” loans to maintain their balance of payments, thus extending their economic dependence on China. Arising from this dependency, many scholars, especially from the Global South, developed theories about equating Chinese credit lines to economic imperialism, and termed it as “debt-trap diplomacy”. Many countries see Chinese loans related to capital expenditure and balance of payment crises under the BRI as predatory and a tool to bend other states to its will”. When the borrower nation struggles to repay, it becomes heavily dependent on the lender, sometimes relinquishing critical assets, such as infrastructure, in a debt-for-equity swap to reduce its financial obligations. The case of Hambantota port in Sri Lanka is a perfect example for China using its debt diplomacy to gain ownership in the IOR.

Furthermore, Chinese IOs leverage their commanding economic position in the IOR to increase its influence in the region. Beyond the port development investments, Chinese investments in Maldives depict pro-Chinese economic behaviours. Under President Yameen’s government in 2014, Maldives joined the BRI, reevaluating their historic trading partnership with India. The rationale behind this decision is: the benefits of the BRI, interchangeable needs of the Maldivian economy and close relations between Yameen and Xi Jinping. During Yameen’s regime, Maldives received substantial loans from China through BRI, which were valued at approximately 25.2% of the Maldivian foreign debt bill of roughly $4 billion in 2023. This led to widespread development of Chinese-funded infrastructure projects, such as the Sinamale Bridge, Hulhumale Phase-II, expanding the Velana International Airport, and more. Maldives inadvertently built a strong trade dependency upon China after a Free Trade Agreement (FTA) was signed in 2017, importing Chinese goods worth nearly $500 billion by 2020. This close economic relationship was further strengthened by the signing of a new FTA, which entered into force on 1st January, 2025. Furthermore, the Maldivian economy relies heavily on tourism, which China seeks to expand its influence by developing high-end resorts and attracting more Chinese tourists to the island nation. From this disproportionate trade and huge credit loans, China has not only built an all-weather ally, but also has received strategic islands on lease from the Maldivian government. This proves the leverage that a shrewd economic policy can generate. 

Beijing's Diplomatic Leverages

The past decades China has been effectively using its guanxi diplomacy methods to establish and sustain diplomatic relations with nearly all littoral states in the IOR. Guanxi diplomacy breaks down the elite nature of diplomacy to its first principles: the social fabric that countries display their foreign policies in. This strategy refers to the use of carefully-developed networks and relationships with political elites in foreign states to influence international relations. These cultivated interpersonal relationships are a type of subtle IOs. 

Chinese operations in the IOR have benefited from the guanxi diplomatic strategy, which has strengthened trust and relationships, especially in Sri Lanka and the Maldives. In the Maldives, newly-elected leader, Mohamed Muizzu, has demonstrated an increased affinity for improved Chinese military, economic and cultural ties. The reign of President Yameen and President Muizzu has led to extensive pro-China policies, signing numerous MoUs and agreements with the Chinese government related to infrastructure development, trade, healthcare and desalination. This can be attributed to the Chinese  ability to disseminate funds as required for fulfilling the development projects in Maldives. This has led to the souring of Indo-Maldivian relations and later developed into an “India-Out” campaign propagated by President Muizzu. Scholars have argued that interpersonal relations between Chinese authorities and the Maldivian government play a key role in these policies. 

Parallelly, the political elites in Sri Lanka have also built lasting relationships with their Chinese counterparts, partly due to their economic dependence and partly due to guanxi diplomacy. The Rajapaksa administrations, in particular, are the best-case scenario for the manifestation of guanxi diplomacy. Mahinda and Gotabaya Rajapaksa, former Presidents of Sri Lanka, built extensive interpersonal relationships with Chinese officials through their ideological similarities and regular engagements between their counterparts. This led to the promotion of pro-Chinese land use, and jointly developing the Hambantota and Colombo ports. The modern Sri Lankan economy is dependent upon Chinese foreign aid, receiving 52% of their foreign debt bill or over $20 billion from Chinese financial institutions. The Rajapaksa dominance of the Sri Lankan government led to extended Chinese involvement in critical infrastructure projects in Sri Lanka, exemplified by the Hambantota port. The Hambantota port, initially planned for Sri Lankan commercial use, was constructed by the China Harbour Engineering Corporation (CHEC) and was leased to the China Merchant Ports, a partially state-owned enterprise, for 99 years. However, dependence on foreign commercial borrowings to fund continuous fiscal deficits led to the Sri Lankan economic crisis of 2022, leading to further debt restructuring with the Chinese financial institutions. 

India’s response to China’s increasing influence in the IOR

In order to counter China’s increasing presence in the IOR, India has employed several strategies, including the ‘Act East Policy’ (AEP). The ‘AEP’ (earlier as Look East Policy) aims to increase engagement with the Southeast Asian countries through soft power diplomacy. For instance, while China has made significant investments in Myanmar and Bangladesh, India has also extended infrastructure investments in these countries through its AEP. Additionally, in order to counter China’s “Strings of Pearls,” India is deepening its relations with regional powers in the IOR including Iran, Oman, Singapore, Myanmar and Bangladesh. This strategy, termed as the “Necklace of Diamonds”, is aiming to counterbalance the rising Chinese presence in the region through diplomatic ties with regional powers to further entrench Indian interests in the IOR. Furthermore, India has begun port acquisition in neighbouring states, including taking complete control over the Sittwe port in April 2024 by the India Ports Global Limited (IPGL), a state-controlled enterprise. IPGL also operates two terminals of the Shahid Beheshti Port in Chabahar, Iran. Finally, India beat out Chinese interests to win the operational rights for the strategic Mongla port in Bangladesh, continuing the acquisition policy. This will counter China’s aforementioned acquisitions of ports in the IOR.

Parallelly, India has adeptly navigated its relationships with the Maldives and Bangladesh to counter China's expanding influence in the Indian Ocean Region. In the Maldives, despite President Mohamed Muizzu's initial "India Out" stance during his 2023 election campaign, bilateral relations have improved significantly. Muizzu's state visit to India in October 2024 marked a pivotal shift, with both nations committing to enhanced cooperation. India extended substantial financial assistance, including a $400 million currency swap and a $357 million support package, to bolster the Maldivian economy. Similarly, in Bangladesh, India has strengthened ties through infrastructure and humanitarian initiatives. Despite the strained relations between India and Bangladesh following the ouster of former Prime Minister Sheikh Hasina in August 2024, economic cooperation has continued, as demonstrated by India's recent shipment of 300,000 tonnes of rice to Bangladesh under an agreement. The initiation of trial movements between Maia Port in India and Sultanganj Port in Bangladesh in February 2024 exemplifies efforts to enhance connectivity and reduce logistical distances by approximately 930 kilometres. These initiatives prove India’s commitment to enhancing regional relationships and opposing China’s expanding influence utilising its neighbors in the IOR. 

In addition to these measures, India has emphasized maritime security and strategic military responses to mitigate Chinese influence in the region. The Indian Maritime Doctrine, applied by the Indian Navy in the IOR, attempts to respond to the numerous deployments and naval exercises conducted by the Chinese PLAN. India has also collaborated with the Quadrilateral Security Dialogue (QUAD) to pursue military exercises to counter the Chinese, most notably the Malabar exercise in November 2022. Finally, Prime Minister Modi’s focus on strong diplomatic relations with key world leaders from the IOR, including receiving highest civilian honours from Saudi Arabia and the Maldives, benefit India’s diplomatic reach. Upon analysing the current dynamics, scholars argue that the volatile nature of economic relations between emerging economies and China, coupled with the infrastructure development dependency on the BRI, will be significantly tested by the deceleration of China's economic growth.

Conclusions

The Indian Ocean's growing strategic importance as a hub for global trade and energy supply has made it a focal point of geopolitical rivalries, particularly between China and regional powers like India. China's influence in the IOR is supported by its economic might, exemplified by dominant trade partnerships and extensive BRI infrastructure projects across the region. These operations leverage soft and sharp power tactics to secure strategic partnerships with states like Sri Lanka and the Maldives. 

Although Sino-Indian relations seem to be improving, it is hard to argue for a collaborative effort between India and China without addressing the “String of Pearls” strategy and the perils of the expanding BRI. India must identify prevalent strategies and unique selling points to counter the growing Chinese influence over geostrategically important island states. 

Furthermore, it is imperative for the Indian foreign policymakers to learn from Chinese strategies such as guanxi, and develop their own methods of non-military influence building activities. We must leverage our ever-growing population, strong economic trade and cultural exports to develop holistic relationships with states in the IOR, and build a balance between China’s and India’s influence.  Lastly, the Indian strategy relating to the direct management of China must continue to leverage the QUAD to protect their SLOCs from Chinese interference, while attempting to constructively engage with China on matters related to trade and commerce. In these endeavours, India must also leverage the Bay of Bengal Initiative For Multi-Sectoral Technical and Economic Corridor as a platform to collaborate with like-minded regional partners as well as deepen trade and infrastructure cooperation with the member states, thus establishing economic countermeasures to China’s economic diplomacy strategies. Utilising multilateral forums like the BRICS+ as a tool to build common ground and positive relationships with the Chinese political elite is a constructive method to develop close bilateral relations. 

Despite China's successes in cultivating influence, these actions have drawn scrutiny for their potential to destabilize regional power dynamics. India is aiming to counter by engaging with regional forums, such as QUAD, BRICS, etc, enhancing economic ties with key IOR states, and maintaining economic resilience against Chinese dominance. While China's strategies showcase its ability to assert itself as a leading power in the IOR, challenges like economic deceleration and increasing resistance from regional actors may test the sustainability of their ambitions. For India and other stakeholders, navigating this complex geopolitical landscape requires proactive policies and a clear commitment to preserving regional stability.