Potholes on China's. New Silk Road: An Analysis of Chinese Aid and Investment in South Asia

For centuries, the Indian Subcontinent has played a role as a crossroads of East and West and as a geopolitical kingmaker, encouraging trade but also representing the wealthiest region ever to be conquered. In the 21st Century, the emerging global power of China has rapidly increased their aid and investment in South Asia, forging stronger economic ties with past partners and upending decades of alliances with other powers. This thesis focuses on the motivations, decisions, and outcomes of Chinese financial flows into South Asia, analyzing the degree that Chinese investment matches governmental claims of motive and how the geopolitical landscape is changing in response to Chinese money. Split into four sections, the thesis first provides justification for focus on the importance of South Asia and the unique nature of Chinese aid and investment, particularly with respect to China's One Belt, One Road Initiative. Next, the thesis overviews past literature on antecedents, decisions, and outcomes of Chinese investment, providing background to qualitative changes the tests run in this thesis. Thirdly, the thesis runs regressions and tests to provide greater clarity to the motivations behind Chinese investment. The final chapters examine case studies of the two largest recipients of Chinese investment, Pakistan and Sri Lanka, and explore how the investment patterns and political outcomes of these two countries are reflected across many recipients of Chinese money, and how these outcomes have called into question the success of the One Belt, One Road Initiative. This research relies on data collected by AidData at the College of William & Mary and the goal of this thesis is to call into question the state of literature and differing narratives regarding Chinese investment by providing quantitative evidence for or against certain claims.