China’s rising affect throughout South Asia by way of strategic investments, high-interest loans, and large-scale infrastructure tasks has left many countries financially overstretched and politically susceptible.
From debt misery to institutional breakdown, a number of international locations are displaying indicators of great pressure.
“Even Bangladesh has now collapsed into anarchy and in a downward spiral,” posted serial entrepreneur Rajesh Sawhney on X. “5 out of 8 economies in South Asia have collapsed: Sri Lanka, Maldives, Pakistan, Afghanistan, Nepal.”
Whereas information doesn’t totally assist this sweeping declare however the underlying stress alerts are actual.
Bangladesh
The nation is gripped by lawlessness, violent protests, and rising radicalization. The interim authorities is unable to say management, and the military has warned of a “self-manufactured disaster.” Inflation is excessive, funding has weakened, and development has slipped to three.3–3.9% for FY25. The financial system stays purposeful however barely.
Sri Lanka
Regardless of modest development projections, Sri Lanka continues to battle excessive poverty, inflation, and a battered foreign money. It defaulted on its exterior debt in 2022 and nonetheless owes over half its international debt to China. Key tasks have yielded restricted returns, and debt servicing stays a serious danger.
Maldives
Whereas GDP development is predicted at 6.4%, practically 20% of Maldives’ public debt is owed to China. The nation’s financial system is closely reliant on tourism, and any exterior shock may tip the stability. The Maldives-China FTA may additionally worsen the commerce deficit and harm native industries.
Pakistan
Pakistan stays politically unstable, with rising unemployment and a fragile fiscal base. Chinese language loans by way of CPEC have boosted infrastructure, but additionally ballooned debt and raised sovereignty issues. Investor confidence stays shaky.
Afghanistan & Nepal
Afghanistan’s financial system is remoted, depending on support, and tormented by poverty. Chinese language engagement is proscribed and sluggish. Nepal, although steady on paper, is dealing with a rising commerce deficit with China and rising dependency on Beijing-backed infrastructure.
