Some 600 years ago, the great Chinese explorer Zheng He and his vast armada frequented Sri Lanka, including landing once to kidnap an uncooperative king. It was all part of the admiral’s decades-long exploration of South and South-east Asia, even to the east coast of Africa – before China would mysteriously turn inwards again.
Now, China is reasserting itself across Asia with a scheme that involves massive infrastructure investment for cash-strapped nations, ranging from ports to railways, urban redevelopment projects and even cultural centres.
And Sri Lanka is back in China’s sights. According to the China Global Investment Tracker, sponsored by the American Enterprise Institute, China’s investment in Sri Lanka from 2005 to this year totalled US$14.87 billion (S$20 billion). This compares with US$214 billion spent by China during the same period in all of east Asia.
Today, Chinese workers roam Colombo’s shopping malls, drinking in pubs and hailing tuk-tuks as they navigate the city with ease. Chinese migrant workers, estimated in the thousands, throng Chinese-backed projects, including a port city rising from newly reclaimed land in front of the city centre.
Chalk up Sri Lanka as a win in China’s One Belt, One Road initiative to rebuild the Silk Road. Beijing is looking to spawn a network of land and sea links throughout Asia and Africa to feed its booming economy. China’s latest triumph in Sri Lanka is a US$1.1 billion deal to revitalise the moribund Hambantota Port in the south, with the aim of finally attracting the freighters that ply the busy shipping lane between China and Europe.
Some major Chinese investments
- Sri Lanka signed a US$1.1 billion (S$1.5 billion) deal this year to sell a 70 per cent stake to China in exchange for further development of the southern deep-sea port.
- The deal, between the government-run Sri Lanka Ports Authority and the state-run China Merchants Port Holding Co, was delayed for nearly six months by protests.
- The Chinese firm will have a 99-year lease on the port, and the right to 6,000ha nearby to create a new industrial zone.
CHINA PORT CITY
- The US$1.4 billion, 269ha development is being built on land reclaimed from the sea off central Colombo. It will include skyscrapers, luxury hotels, shopping malls and a marina.
- Project operator CHEC Port City Colombo is wholly owned by China Harbour Engineering Company, itself a unit of China Communications Construction Company.
NOROCHCHOLAI COAL POWER PLANT
- Officially known as the Lakvijaya Power Station, it is the largest power plant in Sri Lanka and funded by China with loans.
- The first 300MW phase was completed in 2011. According to the Ceylon Electricity Board, the first phase cost US$455 million.
MATTALA RAJAPAKSA INTERNATIONAL AIRPORT
- The Chinese-funded airport is largely empty. It opened in 2013 and came to symbolise the overspending on grand projects under the former government headed by Mahinda Rajapaksa.
- Located in Mattala, near Mr Rajapaksa’s home town of Hambantota, it was the country’s second international airport after the Bandaranaike International Airport in Colombo and was meant to serve what was hoped to be the country’s next big tourism and commercial hub.
SHANGRI-LA HOTEL AND APARTMENT COMPLEX
- The Hong Kong-based Shangri-La group began work on the US$650 million, 4ha site in 2012. The project, which is nearing completion, with portions to be opened later this year, includes a hotel, 390 apartments, shops and office space.
LOTUS POND PERFORMING ARTS THEATRE
- As a major donor in Sri Lanka, China has bestowed grants and loan credits.
- One of the gifts includes the Lotus Pond performing arts theatre, which was opened in 2011.
China’s lucrative embrace, however, is proving a stormy one for Sri Lanka as it seeks to rebuild after decades of civil war. China’s presence is also roiling Sri Lanka’s relations with India, which has long considered the island at its southern tip part of its sphere of influence. China’s growing presence in Sri Lanka is proving to be very uncomfortable for New Delhi, prompting investment plans of its own on the island.
“We don’t like our land being given away to China,” Mr Aruna Roshantha, a fisherman, recently told the BBC.
But others believe Sri Lanka, long dominated by the ethnic Sinhalese majority, has little choice but to embrace China if it wants to thrive.
“In Sinhala, there is a saying that ‘a drowning man will even hold on to a stalk of straw’, and that is exactly what Sri Lanka is doing,” Colombo lawyer and writer Thilini Kahandawaarachchi said in an interview.
Sri Lanka’s 26-year war that ended in 2009 left the country’s finances in tatters – its debt-to-gross domestic product stands at around 75 per cent. Some 95 per cent of government revenue is devoured just to service the debt.
China’s ties with Sri Lanka crystallised more than a decade ago under former president Mahinda Rajapaksa, who was desperate to turn the tide on the Tamil Tiger insurgency in the north.
The countries signed a crucial arms deal and after a 2007 visit to China by Mr Rajapaksa, Sri Lanka signed the initial deal to develop Hambantota Port. Mr Rajapaksa’s regime became known for its lavish infrastructure spending, including commissioning a southern, and still underused, airport, which the Indian government this year expressed an interest in operating and further developing.
In a stunning upset, Mr Rajapaksa lost power in 2015 to Mr Maithripala Sirisena who promised to end corruption and distance the country from China. The new government has since softened its stand on China as the country’s currency withered on world markets.
“Given the agreements entered into by the previous regime and the colossal debt incurred, I do not think the government has much choice but to continue with Chinese investment,” said Dr Paikiasothy Saravanamuttu, executive director of the Centre for Policy Alternatives in Colombo.
The government’s budget may be dire, but it is hardly doom and gloom in the rest of the country, especially in Colombo. Building cranes pepper the skyline and the architecture is getting bolder. There is the Altair project and its twin towers, where one creatively leans against the other. The architect is Mr Moshe Safdie, who designed Singapore’s Marina Bay Sands.
A massive Shangri-La hotel and shopping complex is nearing completion adjacent to the emerging port city. It is being built by Chinese workers, who arrive by the busload at dawn in Galle Face Road each day.
If Sri Lanka is getting much needed investment, what does China get in return? Critics say Beijing gains a foothold, even a listening post, close to India.
Mr K.C. Singh, former deputy secretary to the president of India, told Al Jazeera recently that India would be keeping a wary eye on the Hambantota deal and other plans. “China is not Father Christmas handing out dollar bills,” he said. “They want a return on their money.”
Mr Einar Tangen, a political analyst in Beijing, told Al Jazeera that investments such as Hambantota were helping to rebuild the country, and that is all. He said some 36,000 ships pass the southern port each year, yet only 44 since 2015 have called at the port.
Maintaining Sri Lanka’s independence, however, will be a key challenge. This time around, the Chinese have not arrived uninvited in armed ships, but Sri Lanka, which threw out its last colonial rulers in 1948, will chafe at any hint of becoming a vassal state.
“Sri Lanka’s friendship should not come at the cost of the country becoming a battlefield for the regional power struggles between China and India in particular or by outside influencers interfering in internal matters and sovereignty,” said Mr Kahandawaarachchi.
Unease against the growing Chinese presence is palpable. The Hambantota deal involves leasing the port and 6,000ha of adjacent land for 99 years to a Chinese company. Talks are also under way for Chinese interests to build a US$3 billion oil refinery there, broadening the project’s appeal.
Via Straits Times