As President Xi Jinping has been implementing the “One Belt One Road” strategy at full throttle, Sri Lanka has emerged as a key hotspot for Chinese investments. Beijing is desperate to win over the tiny country in order to use it as a gateway to the Indian Ocean.
Straddling the important sea route between the Middle East and East Asia as well as connecting the Indian Ocean and the western Pacific, Sri Lanka has tremendous strategic value both from the commercial and geopolitical points of view. By establishing and controlling major ports in Sri Lanka, Beijing can secure its seaborne oil imports from not only the Middle East, but also Africa and South America.
In the meantime, ports in Sri Lanka can also serve as an ideal stepping stone for the Chinese navy to extend its influence into the Indian Ocean.
In fact, Chinese submarines have been regularly calling at Sri Lankan ports since 2014. China’s naval presence on its doorstep has not only deeply alarmed India, but has also become a cause for concern for the US as well, which is very mindful of China’s growing influence in the region.
However, things in Sri Lanka are far from hunky-dory for China. On one hand, the Sri Lankan government has continued to flip-flop over its policy on Chinese investments, mainly due to political pressure from India and out of its own concern about the lack of transparency of Chinese companies. As a result, major projects such as the proposed port city near Colombo have seen serious delays.
On the other, the influx of Chinese companies and their employees has also met with strong opposition and suspicion among the local Sri Lankan people, many of whom regard the cash-flush Chinese investors as the modern-day colonialists who are taking away their land and threatening their traditional way of life like the British imperialists did back in the 19th century.
For instance, the local people and Buddhists in Hambantota took to the streets recently to protest against a joint venture port project involving Chinese firms. The protest turned violent and anti-riot police had to resort to tear gas and water canon to disperse the angry crowd, wounding 21 protesters during the course.
However, while both the Sri Lankan government and people might remain ambivalent about the influx of Chinese investors, they don’t have too much choice. It is because the Sri Lankan government has been largely unsuccessful in its attempt to draw western capital over the years due to its poor human rights record.
Also, even though its powerful neighbor India is deeply suspicious of China’s commercial and military presence in the region, New Delhi is having its hands full with problems at home, and is therefore unable to provide long-term investments for Colombo.
As a result, China seems to be Sri Lanka’s only hope at this stage.
This article appeared in the Hong Kong Economic Journal on March 3
Translation by Alan Lee
[Chinese version 中文版]
– Contact us at [email protected]