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Executive Summary: CHINESE LAND GRAB IN BHUTAN

Updated: Jun 17

Charlotte Morton, Antonia Gough, PACOM Team

Week of Monday, May 24, 2021


A Bhutanese village in Punakha Dzong[1]


Satellite images show that China has built a village known as Pangda near the Doklam plateau, a region in western Bhutan that China also claims. China constructed another village called Gyalaphug between 2015 and 2020. This collection of villages has been built on the border between Bhutan, China, and India.[2] China and Bhutan became neighbors following the 1951 annexation of Tibet. Since then, China has shown interest in gaining greater geographical control over the region. The Doklam area is geographically sensitive since India fears that if China was to gain greater control of the region, it could threaten the strategically valuable Siliguri Corridor, otherwise known as the “Chicken’s Neck.”[3] In case of war, if China were to gain control of the Corridor, it would cut India’s Northeastern states from the rest of the country. The construction of the Chinese infrastructure on the border also raises concerns about another confrontation similar to the 73-day standoff of June 2017,[4] where Indian forces confronted Chinese troops following Chinese efforts to expand an unpaved road in the crucial tri-junction between India, China, and Bhutan.[5] The standoff ultimately ceased because neither country wanted military escalation. However, the dispute came back on the agenda in April 2021, when China and Bhutan agreed to resume delayed talks on their disputed boundary.[6] However, due to India’s influence over Bhutan, a breakthrough in negotiations is unlikely to happen.


While Pangda, a village east of the Doklam plateau, was announced “accidentally” by a Chinese state official, Gyalaphug’s construction was widely publicized during construction. Still, China incorrectly represented its location as being in Tibet. One reason Gyalaphug’s construction appears to have been easily concealed for several years is the prevalence and well-publicized practice of building many villages in rural Tibet by the Chinese government. Since 2017, Xi Jinping has promoted a policy of rural development in Tibet, and in recent years hundreds of settlements have been constructed.[7] This level of development in Tibet enabled China to conceal the construction in Bhutan. When a swiftly removed tweet of a senior Chinese government official announcing the completion of a village named Pangda was cached,[8] observers were able to investigate further the location, which several sources ascertained was, in fact, within internationally recognized Bhutanese borders. In addition, satellite imagery revealed that the Chinese government has also constructed a nine-kilometer road along the valley in which Pangda is located.


The rural nature of the borderlands between Bhutan and Tibet is an additional characteristic that helps explain how such a project could have gone unnoticed between 2018 and now. Indeed, as recently as May 2021, the Chinese government released a white paper on the plans for continued development in the construction of rural villages along the Tibetan borderlands with Nepal, India, and Bhutan.[9] Thus, the risk of China building more villages under false pretenses in future years remains one that needs to be closely followed and anticipated. The likelihood of the creation of future settlements is high.


In 1998, Bhutan and China signed the only treaty in place between the two countries, which pledged to “maintain peace and tranquillity on the Bhutan-China border areas.”[10] This treaty is significant because China explicitly acknowledged Bhutanese sovereignty. Thus, the building of villages is relevant due to the violation of international law and the area’s strategic importance for China, and therefore, also for Indian national security. Many buildings and infrastructures house and facilitate the People’s Liberation Army forces and Chinese intelligence services. Ammunition storage bunkers have also been built, which could prove significant if the government plans to use them in a potential future conflict with India over the hotly-contested Doklam border region located close by. The fact that they live amongst locals is also significant, as civilian inhabitants are incorporated into their security and spy networks. The location of such villages allows China to deploy a method they have historically used successfully - the encouragement of cross-border marriage between Bhutan and China. These implications are very likely to allow China to recruit Bhutanese individuals to conduct covert missions on behalf of the Chinese government.


The timing of Chinese village construction and expansion is also significant. The rate of change and development of villages during 2020, in particular, appears to be linked with India’s increasing preoccupation with the COVID-19 pandemic. While the Indian government’s attention was turned towards solving that crisis, China is likely to have perceived this as a chance to grab land and build on it discreetly. This strategy has been used elsewhere by China, most notably in the South China Sea dispute. China’s global economic and political power has enabled its continued efforts at geopolitical expansion during the COVID-19 pandemic. The fact that the country has been able to continue to achieve its expansionist goals despite a global health crisis demonstrates the strength of the country and the importance of continued monitoring of its actions and their broader security implications.


While the location of these illegally built villages would make it seem that China has a border dispute with Bhutan, their construction strategy has much more to do with ongoing and long-lasting territorial disputes with India. Bhutan is a small country caught in the middle of a much bigger conflict. On the one hand, the government can only conduct diplomacy with China through India, limiting its room for manoeuver. A treaty binds Bhutan with India, and it includes a promise not to threaten each other’s national security, which would be the case if Chinese outposts were located on its territory. On the other hand, Bhutan is being plied by China with Belt and Road Initiative incentives. In 2017 alone, China offered USD 10 billion in investment to Bhutan, which is four times as large as the country’s GDP as a whole.[11] India has consistently been Bhutan’s primary financial and defense partner, to the extent that they can hardly afford to maintain their silence on China’s aggressive land development activities. However, for this very reason, there is a considerable temptation for Bhutan to increase its economic ties with China to diversify its economy and achieve the goal to remove itself from the United Nations Least Developed Countries (LDC) list by 2023.[12] Seeking economic support and investment from a significant actor such as China would play a large part. Consequently, the territorial disputes between China and Bhutan are very likely to be solved only when Sino-Indian border discrepancies are agreed upon. Taking this complex, volatile, and as yet unsolvable context into account, it appears that China’s selection of village construction locations has not been made because China finds those Bhutanese locations habitable or useful. Instead, it appears China intends to use them as bargaining chips with Bhutan to persuade its government to hand over other more strategically useful locations close by. Indeed, the areas where China has built roads and construction on Bhutanese soil are highly vulnerable to flooding and hard to access. However, the areas are of extreme religious significance to Bhutan. Hence, China may be attempting to exploit the sacred nature of these lands to bargain with Bhutan.


Following the 2020 revelations about Pangda, Chinese and Bhutanese officials have denied this land acquisition.[13] However, there are many security and tactical reasons why they may have decided to do this. This denial of village construction by Bhutan is a big win for China, which can now portray these claims as Western and Indian hysteria over nothing, or more seriously, as an attempt by India to sow discord between China and Bhutan. Chinese media have also voiced the perspective that, looking at India’s position and what they may have to gain, they are actively avoiding the resolution of Sino-Bhutanese border disputes, as they feel this would weaken their hand in the bigger picture Sino-Indian border disputes. Chinese media have also portrayed these border village revelations as destabilizing disinformation campaigns by Western media to turn the international community, India, and Bhutan against China and fuelling Indian hegemony in the region.


India has always exerted a considerable influence over Bhutan. There is evidence that in recent years the Bhutanese government has felt that India’s role has been too significant, and even that Bhutan may be being exploited by India.[14] Thus, there is potential for a combination of resentment, with some considering India to be too meddled in Bhutanese affairs and others perceiving that it is not involved enough in preserving Bhutan’s national security when the situation calls for them to be. On the other hand, Bhutan does not want to become caught up in a more significant conflict between China and India, given its size and history. The country has few defense capabilities and a tiny economy. In order for Bhutan to play a stabilizing role in the conflict, rather than being caught in the middle of it, the country could take steps to seek stability and peace between China and India through multilateral talks. Although India and China engaged in clashes over a different disputed border area as recently as 2020, the greater risk comes from India attempting to intervene in Bhutan to counter China. This would worsen the situation and potentially create resentment in Bhutan against the two parties (one fomented by the other), and even result in a Sino-India escalation. Even though the risk is limited and considering that Bhutan has been willing to accept a compromise with China (no doubt that they cannot stand up to such a power), this “pawn” role is currently played by Bhutan is likely to become dangerous. If China were to seek military dominance over Bhutan, which would be seen by India as a hostile act, Chinese actions could ultimately spark a war with China, which would put Bhutan’s population at risk.


The Counterterrorism Group’s (CTG) Indo-Pacific Command (PACOM) Team will track local news and social media sources to keep on top of significant future developments. CTG will continue to monitor the situation closely via open source and geospatial intelligence, mainly to track any further development of the existing villages or the creation of new ones. The PACOM Team specifically will continue to produce a variety of reports on geopolitical and security developments relating to the actions of the Chinese government, developments in Sino-Indian relations more precisely, and the implications of these developments on the wider Asia Pacific region. Please contact us for further assistance.

________________________________________________________________________ The Counterterrorism Group (CTG)

[1]Building near trees and body of water during day” by Pema Gyamtsho licensed under the Unsplash License

[2] Near the China-Bhutan-India border, a new village is drawing attention to old disputes, South China Morning Post, December 2021, https://www.scmp.com/news/china/diplomacy/article/3112712/near-china-bhutan-india-border-new-village-drawing-attention

[3] Ibid

[4] China ‘halts road building’ to end India border stand-off, South China Morning Post, August 2021, https://www.scmp.com/news/china/diplomacy-defence/article/2108686/china-halted-road-building-end-india-border-standoff

[5] Why Bhutan's Sakteng wildlife sanctuary is disputed by China, BBC, November 2020, https://www.bbc.com/news/world-asia-55004196

[6] India’s shadow looms over revived China-Bhutan border talks, South China Morning Post, April 2021, https://www.scmp.com/news/china/diplomacy/article/3129828/indias-shadow-looms-over-revived-china-bhutan-border-talks

[7] China expands Tibet with new town inside Bhutan: Report, The Week, May 2021, https://www.theweek.in/news/world/2021/05/23/china-expands-tibet-with-new-town-inside-bhutan-report.html

[8] Photo reveals village that shouldn’t exist: Chinese village built on disputed territory in Bhutan, news.com.au, November 2020, https://www.news.com.au/technology/innovation/military/deleted-tweet-reveals-chinese-village-built-on-disputed-territory-in-bhutan/news-story/e3153e7b2cafec9e8fb1528399b88bec

[9] China’s never-ending Tibet paranoia, The Interpreter, June 2021, https://www.lowyinstitute.org/the-interpreter/china-s-never-ending-tibet-paranoia

[10] China’s Bhutan Gambit, The Diplomat, July 2020, https://thediplomat.com/2020/07/chinas-bhutan-gambit/

[11] China’s Territorial Ambitions in Bhutan – Why it Matters to India, South Asian Voices, December 2020, https://southasianvoices.org/chinas-territorial-ambitions-in-bhutan-why-it-matters-to-india/

[12] Ibid

[13] Photo reveals village that shouldn’t exist: Chinese village built on disputed territory in Bhutan, news.com.au, November 2020, https://www.news.com.au/technology/innovation/military/deleted-tweet-reveals-chinese-village-built-on-disputed-territory-in-bhutan/news-story/e3153e7b2cafec9e8fb1528399b88bec

[14] China’s Territorial Ambitions in Bhutan – Why it Matters to India, South Asian Voices, December 2020, https://southasianvoices.org/chinas-territorial-ambitions-in-bhutan-why-it-matters-to-india/

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