Chequebook Diplomacy

By : Neha Dhyani

Updated : Apr 1, 2022, 12:42

Chequebook Diplomacy, or Checkbook diplomacy, however you spell it, is a term used to describe a foreign policy in which countries exchange economic aid and investments to realize some diplomatic favour. It is a fact that states use different tools to gain influence and project power over their target regions.

These tools can range from force and coercion to relationship-building techniques in the form of reciprocal advantages and better cooperation. Chequebook Diplomacy lies between these extremes, whereby states seek diplomatic gains in return for financial aid and developmental funding.

China's Chequebook Diplomacy Success

The Pacific is the region most marked by this Chequebook Diplomacy incident. Chequebook Diplomacy has been a key component of diplomacy, with Chinese and Taiwan each engaging in a lengthy process of strengthening diplomatic recognition in the region since 1970. And the engagement continues to date, with China extending substantial support to the Pacific nation in their drive to fight against Coronavirus.

The Pacific island nations are the most aid-dependent economies due to multiple factors. This continued dependence of the pacific nations has exposed its vulnerability to the two Asian economic giants, with Beijing and Taiwan each trying to gain diplomatic recognition. It is important to understand here that the donor nations aim to gain the support of international organizations by establishing diplomatic recognition in the Pacific region.

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And Beijing enjoyed an upper hand in its competition with Taiwan for its UN leverage. It is believed that China will soon surpass the biggest donor to the region, Australia, as an outcome of its promise to donate four times what Australia has done. But China's help and assistance have strings of personal intention, and the benefits attached to it are something that the recipients of the Pacific region are yet to discover.

Like, Sri Lanka's experience of Chinese aid for the Hambantota Port finally ended up surrendering the same to Chinese supremacy for 99 years lease. China's intensification of Chequebook Diplomacy in the Pacific island nations has raised concern for the US and its allies. The US believes there might be a potential military advantage for ever-increasing and constant Chinese investment.

Ultimate Outcome of China's Chequebook Diplomacy

As per the researchers of Harvard University, countries who cannot repay the pilling up loan are forced to hand over lands, ports, and airports to Chinese authorities, which is for sure military and strategic gain for China. It has been identified that 16 countries worldwide are indebted to the Chinese Government, which will surely bring huge strategic benefits for the latter in the coming days.

India's neighbours, Pakistan and Sri Lanka are hit hard with loan repayments, which can concern India. Lately, India has also been sidelined in Nepal owing to large-scale infrastructural investments made by China, of course with a vested interest.

China has cautiously spread the net of its financial lending to countries across the globe to gain hidden underlying benefits in the form of its Chequebook Diplomacy. Its continued financial investments will surely be a concern in the geopolitical environment that only time can say.

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FAQs on Chequebook Diplomacy

Q.1. What are the different types of diplomacy, excluding Chequebook Diplomacy?

Ans. Economic diplomacy, parliamentary diplomacy, cultural diplomacy, political diplomacy, and military diplomacy are the different types of diplomacy, excluding Chequebook Diplomacy.

Q.2. What is Chequebook Diplomacy?

Chequebook Diplomacy is a diplomatic tool by which nations engage in financial aid and investments to curry diplomatic favour.

Q.3. When was the term Chequebook Diplomacy first used?

The term Chequebook Diplomacy is known to be used first time during the Gulf War to describe German and Japanese international involvement.

Q.4. What is China's intention behind Chequebook Diplomacy?

However, on the surface, it may appear that China is trying to make friends with the nations where it is practising Chequebook Diplomacy. It is a fact that there are strings of strategic and real estate gains for China attached to such policies.