The Bhutan Anomaly: “Friendly Annexation” in China’s Border Politics

This article was originally published with the SOAS China Institute and is republished here with the permission of the author. The article is a part of an ongoing collaboration between the SOAS China Institute and CHOICE.

China has five principles governing its foreign relations, of which the first and foremost is mutual respect for sovereignty and territorial integrity. First established in 1949, the Five Principles are the basis of China’s Law on Foreign Relations – passed in 2023 (Art. 4) – and are at the core of Xi Jinping’s Global Security Initiative, which prioritizes “respecting the sovereignty and territorial integrity of all countries” and says “only dialogue and consultation are effective in resolving differences.” Indeed, Chinese statements on foreign relations give a special prominence to this non-interventionist approach in relations with its neighbors. The Law on Foreign Relations, for example, says that China “develops relations with surrounding nations in accordance with the concepts of sincerity, tolerance, and the policy of being a good neighbor and partnering with neighbors” (Art. 18).

How, then, should one understand China’s actions regarding its tiny southern neighbor Bhutan? Since 2016, China has annexed several areas of Bhutan that have for decades (if not centuries) been shown on Bhutanese, international and, until recently, even many Chinese maps as parts of Bhutan. Research by myself and a group of colleagues and by a CNN team has found that over the last eight years, China has quietly constructed 22 villages and settlements with a total of some 2,280 residential units in Bhutan, together with a network of roads, military installations, barracks, outposts and supporting infrastructure.

Approximately 7,000 people have been relocated from Tibet – now part of China – to live in these villages, together with what is estimated to be a similar number of officials, construction workers and soldiers. As a result, in the last decade or so Bhutan has lost some 2 percent of its territory. The annexations took place despite a 1998 treaty with Bhutan in which China pledged “not to resort to unilateral action to alter the status quo of the border” and agreed that “prior to the ultimate solution of the boundary issues, peace and tranquility along the border should be maintained and the status quo of the boundary prior to March 1959 should be upheld.”

The apparent purpose of these moves is to obtain an area of western Bhutan known as the Doklam plateau. Control of this plateau would give China a military advantage in its ongoing conflicts with India, as it overlooks the narrow land strip – known as the Siliguri Corridor – that links India’s heartlands with its seven northeastern provinces. China has already annexed two-thirds of the 89 sq km plateau by building roads, military installations and barracks there. It was deterred from securing the remaining, southern segment only by India’s military intervention in 2017.

But in 2019, China started building villages in areas which lie to the east and north of the Doklam plateau and which have long been regarded as parts of Bhutan. These areas had been part of Tibet – taken over by China in the 1950s – in the past but, according to the historian Tsering Shakya, they were ceded to Bhutan in 1913 by the then ruler of Tibet, the 13^th Dalai Lama.

It is not clear why China has been willing to break a bilateral agreement and international law to get these areas – they are high-altitude grasslands with no permanent inhabitants, used by the Bhutanese only for yak-grazing and as a nature reserve. Unlike the Doklam plateau, they are not of any evident strategic significance. Nevertheless, China now has full military and administrative control of these territories, and there is nothing Bhutan can do about it. It has an army of less than 8,000 troops, and there is no sign that India would resort to military intervention on the Bhutan-China border, other than on the Doklam plateau.

China has also annexed an area in the northeast of Bhutan known as the Beyul Khenpajong (or Baiyu), which is some 170 kms away from Doklam. China’s initial claim to Beyul was not based on acquiring these lands for China; instead, the claim was made to increase pressure on Bhutan to yield Doklam and the adjoining areas in western Bhutan to China. China made this clear in 1990, when it offered to renounce its claim to Beyul and the neighboring areas if Bhutan were to cede the western areas including Doklam – an arrangement known as “the package deal.” The two countries have held 25 rounds of negotiations to discuss China’s claims, but Bhutan, which has made no claims on land previously held by China and which is bound by a 2007 treaty to respect India’s security interests, cannot cede Doklam to China without Indian approval. As this is more or less unthinkable, Bhutan has no way of getting China to return all of the Beyul Khenpajong.

Having failed to get the desired concessions, China’s response in 2015 was to increase pressure on Bhutan by building villages and roads in the north of Beyul. Initially, the villages were small, and the annexation of Beyul was intended to be a temporary pressure tactic to get Bhutan concede to its demands. But since 2022, China, perhaps finally convinced that Bhutan cannot give it Doklam, has changed its approach in northern Beyul: it has doubled the size and number of its villages there and now plans to turn three of them into towns. Clearly, it no longer plans to return these areas. China’s annexation of northern Beyul is thus set to become permanent.

Chinese media have published hundreds of reports about the happy lives of residents in the new villages, none of which mention that these are on territory that has long been part of Bhutan and are now disputed. But in its first ever official statement on the annexations, given to CNN in November 2024, China’s foreign ministry appeared to admit that the areas where it has built the new villages are disputed: “China and Bhutan have their own claims regarding the territorial status of the relevant region.” This was followed by an explanation as to why it is carrying out construction and mass population settlements in these disputed areas: “China’s construction activities in the border region with Bhutan are aimed at improving the local livelihoods.” This is a perfectly circular argument since these areas had no residents until China began to build the new cross-border villages eight years ago.

Meanwhile, the border talks between Bhutan and China continue, as if the annexations had not happened. China says the “two sides are actively seeking a boundary demarcation arrangement that is acceptable to both, in accordance with the principle of fairness, rationality, mutual understanding and mutual accommodation.”

China’s border policy with Bhutan thus presents what might be called the “Bhutan anomaly,” a form of acute cognitive dissonance in diplomatic discourse where speech and practice are in open, explicit contradiction. In this situation, a negotiating party plays both ends of a strategy: it does both what it says it should do and what it says it would never do, while denying any conflict between the two. China and Bhutan thus continue to treat each other as friendly neighbors and negotiate as prescribed by China’s Five Principles, the Law on Foreign Relations, and Xi’s Global Security Initiative. At the same time, China has already decided the practical outcome of these talks through military intervention and relocation of its population into the relevant areas.

Meanwhile, Bhutan, making the best of an impossible situation and after several years of silence on the issue, now says there are “no Chinese settlements” on its territory. This suggests that Bhutan has finally given up any claim to the areas where China has built the new villages, although numerous official Bhutanese maps, as well as earlier governmental statements and historical records, show these areas as being within Bhutan. Until the 1990s, even official Chinese maps showed all of Beyul and its nearby areas as within Bhutan. And so far, apart from a little-noticed report by the US military, no foreign government or politician has even referred to China’s annexations in Bhutan, let alone raised any concerns about them. Neither has any explanation come from Chinese scholars for Beijing’s decision to resort to pre-emptive annexation in its dealings with a friendly government. But for China’s smaller neighbors, the Bhutan anomaly will surely figure prominently in their calculations regarding any future border disputes with China.