Is Sri Lanka Going To Be The Next China Town In Indian Ocean?


Co-Written by Punsara Amarasinghe & Eshan Mandara Jayawardane

Chinese presence in Sri Lanka was not emerged out of the blue in the island’s recent political past.  Having located in a crucial geographic location in maritime silk route Sri Lankan history claims a long standing affinity with China in its rich history. However Sino Sri Lankan relations in the post independent era had mainly shaped through the roots of Non alignment movement and Sri Lankan Prime Minister Sirmavo Bandaranayake in 1962 played a pivotal role in mediating between China and India after the month long Indo Sino war though her stupendous effort did not reap its harvest.

21st Century China Sri Lanka relations began to enhance in a different strategic manner during former Sri Lankan president Mahinda Rajapakshe’s period whose policy was decisively favorable upon Beijing during his second tenure in the presidency. Especially China provided sufficient military support for Sri Lankan armed forces in fighting with LTTE and after the end of war when Rajapakshes’s government got beaten down the hatches before human rights issues in UN, Chinese support was given to the island nation. This political scenario opened the path to China to involve in Sri Lanka’s economic development projects in a larger scale. During the last three years of president Rajapakshe China had a strong grip over the investments in Sri Lankan development projects. The impeccable strategic position of Sri Lanka’s Hambantota harbor had allured Beijing to pump some $5 billion into Sri Lanka in an effort to turn it into a pivot of its ‘Maritime Silk Road’. Intensity of Chinese romance in Sri Lanka was suddenly decelerated when Rajapakshe was confronted by an unexpected defeat in 2015 Presidential election to MaitreepalaSirisena who arose as the common candidate of joint opposition with the fullest blessings of India. The sudden regime change gave a heavy blow to Beijing; especially the major setback came when newly appointed president MaitripalaSirisena ordered to investigate over the mega projects in Hambathota harbor and Colombo Port City which happened to be another exclusive project funded by Chinese investors.

Three years after the decline of Rajapakshe China has reaffirmed their position in Sri Lanka in a good move which reached its climax when government of Sri Lanka completed the formal handover of the strategic port of Hambantota to China, which will take control of the facility on a 99-year lease.Despite having envisaged a heavy pressure from nationalist forces and joint opposition present government in Sri Lanka continues to play the same cards played by Mahinda Rajapakshe with China in handling the port issue in Hambatota. In order to stabilizethe relationship with New Delhi, Sri Lankan prime minister made it clear that none of the ports in Sri Lanka would be allowed to use by foreign powers, but in truth before the current government entered power in 2014 two Chinese nuclear submarine surfaced in Colombo port. Apparently India has grown an interest in controlling the Eastern port Trincomalee which is located in the Eastern marine belt of the island. India’s ardor in Trincomalee was palpably demonstrated when Carnage(India)  hosted an event titled “ Trincomalee Consultation in 2017 February and Indian ministry of external affairs announced that the concern over controlling the oil tanks in Trincomalee harbor was emphasized during the official visit of Sri Lankan Prime Minister Ranil Wickrmasighe to New Delhi in late April 2017. Nevertheless present circumstances have clearly manifested Chinese presence in Sri Lanka grows more solid in action than India’s diplomacy to become a part in this strategic game over island’s port resources. Though Colombo has  assured the Chinese acquisition of Hambatota is purely for civilian intents  Beijing  could operationalize Hambantotta as an ideal resupply node for the military base of first oasis  military base of Chinese people’s liberation army navy in port Doraleh in Djibutti which was formally opened in2017 August. According to the agreement between Sri Lankan government and China Merchants Port Holdings Co., the state-owned Chinese port operator, China has agreed to pay $1.12bilion for 70% share of Hambatota port for 99 years.  China Merchants has also agreed to invest an additional $600 million into the development of the struggling Hambatotaport, which has so far incurred $300 million in losses.

On the other hand the ongoing project of Colombo Port city project is the largest foreign investment in Sri Lanka’s history. The construction of Colombo Port city has been taken over by China Harbor Engineering Corporation, a subsidy of China Communication Construction. In fact this company has been blacklisted by World Bank on allegation of corruption. The planned mini city will be built on a land reclaimed from the sea and Chinese investors have planned to transform into a luxurious city of skyscrapers, luxurious hotels and shopping malls would inevitably change geopolitical landscape of Sri Lanka. With all this ongoing Chinese projects in the island Sri Lankans have developed a sneaking fear towards prolonged Chinese presence in Sri Lanka. Especially the Chinese workers who came to work for projects in Sri Lanka have settled in the rural areas of the country and this has caused an emerging unrest in Sri Lankan society. The larger problem was erupted when the lands nearby Hambatotta port were offered to sell for the Chinese project, most of the residents vehemently opposed to it. Many of them participated in a protest against the Chinese investment hub in Hambatotta. However island total debt stands at $64BN and as a result of country’s failure to improve its export revenues, Chinese debts and investments projects have become a tempting factor for Sri Lanka. Remaining question is has Chinese loans increased the debt crisis in the island from bad to worse with its high interest rates. As a strategy of Belt and Road initiative China has spread many investments in the region such as Nepal, Bagladesh, Pakistan and Nepal. In such a context Sri Lanka is not in a win win situation to compromise with country’s wounded economic conditions. It is certain that debt crisis has put Sri Lanka smack in the middle of the deep and blue sea. Hobson’s choice given by China to Sri Lanka has left island nation in a dilemma whereas Sri Lanka will have to play a prudent game while ensuring the national interest and the external interests of its closest neighbor India.

Punsara Amarasinghe is a Doctoral candidate in International Law at Higher School of Economics in Moscow. Having studied in University of Colombo, Sri Lanka and South Asian University in New Delhi, India, he served as a guest lecturer at Faculty of Arts, University of Colombo. He can be reached at [email protected]

Eshan Mandara Jayawardane holds BA in Sociology from Delhi University and MA in International Relations at Jawarhalal Nehru University, New Delhi. Currently he is attached to Open University of Sri Lanka as a visiting lecturer. He can be reached at [email protected]


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