China’s ‘Grey-Zone’ Tactics in Bhutan: An Indian and International Challenge

According to a recent report published by Turquoise Roof, in 2016, China began constructing its first cross-border village within Bhutan’s customary borders and since then has built 22 villages across approximately 825 square kilometres. This constitutes around 2% of Bhutan’s total land area, in two main regions—eight in western Bhutan and 14 in the northeast.

These Chinese settlements comprise 752 residential blocks, housing nearly 7,000 people, including civilians, border police, military personnel, and construction workers. The Chinese authorities have relocated these individuals to previously unpopulated and remote areas.

China’s strategic motives behind building these villages are closely tied to its ongoing border negotiations with Bhutan, particularly its interest in the Doklam plateau. This 89-square-kilometer plateau, located in western Bhutan, holds significant military importance for China due to its proximity to India’s Siliguri Corridor—a narrow strip of land that connects mainland India to its northeastern states. Controlling Doklam would provide China with a tactical advantage in its long-standing rivalry with India.

Historically, China proposed a territorial “package deal” to Bhutan in 1990 to drop its claims over Bhutan’s northeastern territories in exchange for the Doklam plateau and surrounding regions in the west. Bhutan has been hesitant to accept the deal, primarily due to India’s security concerns and influence. Under the Indo-Bhutan Treaty, Bhutan is obliged to consider India’s strategic interests in its foreign and security policy decisions.

The report details a six-stage strategy employed by China that began in the early 1990s when Tibetan herders were sent into contested areas. Over time, China incrementally strengthened its presence by building shelters, sending military patrols, and constructing outposts. Eventually, road networks were developed, connecting these outposts to towns in Tibet. The final stage, starting in 2016, saw the construction of villages in these areas.

By relocating civilians and establishing administrative and military infrastructure, China seeks to solidify its presence in these areas. Once these villages are fully established, it becomes increasingly difficult for Bhutan to reclaim its sovereignty over the contested regions.

The report suggests that China’s strategy could lead to the permanent annexation of areas where these villages have been constructed, despite earlier promises to return some territories to Bhutan.

The residents of these villages, most of whom are Tibetan, face harsh climatic conditions, with many areas blocked by snow for several months each year. Despite these challenges, China provides financial incentives to relocatees, offering subsidies of 20,000 yuan (approximately $2,836) per person per year—comparable to the average per capita income of rural Tibetans.

For Bhutan, the loss of these territories poses significant cultural and religious implications, especially in areas like the Pagsamlung Valley, which holds religious importance for the Bhutanese people. Additionally, it disrupts local livelihoods and challenges Bhutan’s historical claims over these lands.

The lack of global scrutiny may have emboldened China to accelerate its village construction efforts. Since early 2023, the pace of construction has increased, with seven new villages being built in northeastern Bhutan. The report raises concerns that this pattern could set a dangerous precedent, where smaller nations struggle to resist territorial encroachment by larger powers.

While some of the villages in western Bhutan hold strategic military significance, providing oversight of key border passes, others in the northeast appear to have little military or security value. According to the report, the construction of these northeastern villages may serve as a bargaining tool aimed at pressuring Bhutan into ceding control of the more strategically important Doklam region.

These settlements, often referred to as “well-off border villages,” in Chinese media, are designed to establish facts on the ground that reinforce China’s claims of sovereignty. Much like China’s artificial islands in the South China Sea, these villages are part of a broader strategy to expand territorial control through non-military means, often referred to as “grey-zone” tactics.

While each village is equipped with administrative buildings, schools, health services, and connectivity infrastructure, they are not self-sustaining since the rugged terrain limits opportunities for traditional farming and animal husbandry. China has implemented various economic schemes to generate income for residents, including handicraft workshops and greenhouse farming. However, given the isolated nature of these villages, long-term economic viability remains a challenge.

To promote national identity and loyalty, the Chinese government encourages residents to participate in patriotic activities, such as flag-raising ceremonies and “border patrols,” intended to symbolise their role in defending China’s sovereignty.

The international community may face a growing challenge in addressing these subtle but impactful forms of territorial expansion. The situation in Bhutan is a stark reminder of the delicate balance of power in the Himalayas and the potential consequences of inaction on the global stage.

(The author is a foreign affairs expert. Views personal.)