Behind the Himalayan Standoff: China-Bhutan Relations

Since mid June, China and India have been engaged in a military standoff in the Himalayas. Though neither side has revealed many details, media reports estimate around 100 troops from each side are directly facing off, with potentially thousands more in support positions. While the crisis pits the two Asian giants against each other over a disputed boundary region, this time the incident does not involve a direct Sino-Indian dispute. Instead, India was purportedly intervening to stop Chinese unilateral action in a region disputed between China and Bhutan – a tiny Himalayan kingdom sandwiched between India and China.

In fact, India crossed a part of the Sino-Indian border that is settled, leading China to accuse India of entering Chinese territory. According to the Indian Ministry of External Affairs, however, India was responding to Chinese “unilateral activity” – specifically, road construction – in the disputed area, in consultation with the Royal Government of Bhutan. India has a close relationship with Bhutan that gives New Delhi unique influence over Bhutanese defense and foreign policy; in India’s mind, that justified sending troops to confront the Chinese military in order to defend Bhutan’s interests.

While most of the media attention has focused on the India-China dynamic, it’s also worth taking a look at the relationship between China and Bhutan, whose border dispute is the direct cause of the current standoff. For starters, technically there is no China-Bhutan relationship. The two countries do not have formal diplomatic relations, though the Chinese Foreign Ministry says they “maintain friendly exchanges.” China is not alone in this regard; Bhutan has formal diplomatic relations with only 53 countries around the world, according to the Bhutanese Foreign Ministry. However, that number includes many of China’s neighbors – including India as well as Nepal, Pakistan, Japan, South Korea, Mongolia, Vietnam, and Myanmar – making the absence of China-Bhutan relations an odd omission.

Without formal bilateral ties, China and Bhutan’s respective ambassadors in India are the main points of contact for China-Bhutan exchanges. That hasn’t stopped several high-level exchanges from taking place in recent years, however, including the first-ever meeting between their prime ministers in 2012, on the sidelines of a UN meeting. Most recently, Bhutan’s Foreign Minister Damcho Dorji visited Beijing in August 2016 for the annual round of border talks.

China and Bhutan’s border dispute involves over 700 square kilometers of contested territory. The two countries have held talks regularly on the issue since 1984 with little to show for it (notably, India, which has a major strategic interest in where the boundary is drawn, originally negotiated on Bhutan’s behalf from 1972-1984).

China’s territorial claims vis-à-vis Bhutan have long shaped their relationship. Bhutan had close relations with Tibet for hundreds of years, which provided the historical basis for the Chinese government to claim sovereignty over both Tibet and Bhutan (along with Nepal and the kingdom of Sikkim, now part of India) in the early 20th century. In response to China’s claims, Bhutan pivoted toward India in an attempt to preserve its independence, a stance it has maintained to the present day.

However, the Sino-Indian tug of war over South Asian countries has also reached this tiny Buddhist kingdom, though China’s influence in Bhutan remains limited at present. In 2015, according to data from the Chinese Foreign Ministry, China-Bhutan trade was worth only $10.3 million, with the vast majority of that ($9.9 million) being Chinese exports to Bhutan. In addition, there’s currently no direct investment between the two countries, although the Foreign Ministry notes that Chinese companies have signed $11 million worth of unspecified “engineering” contracts.

As Sudha Ramachandran noted in an analysis for the Jamestown Foundation, “In the Himalayan region, geography favors trade with India, not China.” Like Nepal, Bhutan remains heavily dependent on India, the source of around 80 percent of Bhutan’s imports and destination for 90 percent of its exports. According to the Indian Embassy in Bhutan, New Delhi also accounts for close to 70 percent of all external aid to Bhutan.

That said, Bhutan’s private sector is eager for the chance to expand trade with China and had been pushing for diplomatic ties before the current border standoff. Bhutan’s government is interested as well. According to a statement from China after Dorji’s 2016 visit, “The Bhutanese side is willing to continue to deepen exchanges in such fields as tourism, religion, culture, and agriculture and further lift the cooperation level with China.”

To some in Bhutan, Indian pressure is to blame for the slow growth of the bilateral relationship with China. It’s a not uncommon sentiment in Bhutan to complain that India doesn’t respect their country’s right to an independent foreign policy, and is angling to keep China-Bhutan relations limited. There’s also a perception that India is the stumbling block preventing settlement of the border issue. Writing for The Wire, P. Stobdan argued that “the prevailing sentiment in Bhutan is in favor of resolving the issue with China amicably without further delay.”

Chinese media tried to capitalize on this ambivalence toward India in its coverage of the current dispute. Chinese reports describe India’s actions as unilateral and thus a violation of Bhutan’s sovereignty.

It’s still unclear what role Bhutan itself played in the current Sino-Indian standoff. In the past, Bhutan has generally taken a quiet stance on the dispute, refraining from publicizing potentially provocative Chinese actions (such as construction) in the disputed territories. That makes the current spat all the more noticeable – especially as tensions rose sky-high after an action by India, not Bhutan.

Interestingly, Bhutan’s lone statement on the issue (as of this writing) made no mention of India, much less affirming India’s claim that all its actions were taken in close consultation with Bhutan. Bhutan was, however, openly critical of China. According to the statement, from Bhutan’s Foreign Ministry, in “written agreements of 1988 and 1998” China and Bhutan “agree[d] to … maintain [the] status quo on the boundary as before March 1959.” Bhutan also said both sides had agreed to “refrain from taking unilateral action, or use of force, to change the status quo of the boundary.” Thus, the road construction, in Bhutan’s eyes, “is a direct violation of the agreements and affects the process of demarcating the boundary” between Bhutan and China.

The question now is whether Bhutan is more fearful of Chinese incursions into the disputed area, and the associated risk of losing territory, or of remaining in India’s shadow, to the detriment of economic development. With an election looming in fall 2018, the Bhutanese public will have a chance to make their voices heard, and help determine their country’s ultimate choice.