Sri Lanka's China Dilemma

Eric Meyer-2/22/2015 

One year ago, Chinese Third World diplomacy was widely seen as being in crisis.  Throughout Africa, Latin America and Asia, a growing number of emerging countries were expressing reluctance to be involved in relations with the Middle Kingdom based on its exploitation of their mineral resource riches. This sense of unease and even outright resistance to China was most evident in Asia, where Myanmar andNorth Korea began distancing themselves from their giant neighbor and even systematically refuse to align themselves with it on key foreign policy issues.

But today it would seem that the balance has started swinging in the opposite direction, and China has revised its procedures and scenarios. In the case of Myanmar, as noted in my last post, a gas pipeline from the Andaman Sea to the Chinese province of Yunnan was opened at the start of February, which will better protect China’s imported energy lifeline. At the same time, a series of other mega-projects are now being negotiated, which will more closely align Myanmar to the People’s Republic.

A double clock is therefore ticking. Moreover, it is doing so in contradictory directions and, in this respect, the case of Sri Lanka is especially instructive. Sri Lanka held elections in December, which were unexpectedly won by the opposition, whose campaign was partially based on China-bashing. The new strong man, Maithripala Sirisena, claims to want to distance his country from the economic agreements his predecessor signed with China. In one such deal, for billions of dollars of investment, China is upgrading Colombo’s airport.  Another one involves China building a new city and deep-water port in Hambantota, on Sri Lanka’s south coast (a town which incidentally is the former head of State’s political stronghold). This harbour is being constructed to create an outlet for China’s merchant shipping and navy.  As such, it will be a key part of the so called “string of pearls” that China is currently building through Burma, Pakistan and elsewhere, with the aim of securing its opening to the Indian Ocean and surrounding its old geopolitical rival India. It also should be one major investment into China’s new and revolutionary “New Maritime Silk Road” project.  Under this grand scheme, a wave of development should cascade from Tianjin to France along the Southern shores of the Eurasian continent. Therefore, in China’s eyes, a U-Turn by Sri Lanka’s new government on Sino-Sri Lankan ties should simply not be allowed to proceed.

New port of Colombo

It comes as no surprise that Beijing quickly dispatched deputy minister Liu Jianchao to Colombo on February 5th in an effort to squelch this rebellion before it began.  What he conceded or promised during this visit has yet to be disclosed.  But Liu quickly attained results: after he met with the new President of Sri Lanka, the latter’s spokesman confirmed that after publication of a formal environmental impact assessment, the new port of Colombo would be given a green light.  At a cost of one and half billion dollars, a big public Chinese consortium will build up the Colombo Port City Project. In return for doing so, it will be given 20 hectares of reclaimed area, plus 88 hectares of land leased for a period of 99 years. Businesses, high-end residential housing, including Sri Lanka’s first 100-story high-rise tower, along with a marina, golf course, and Formula 1 racing track are to be built on this prime location. Further investment is to follow, amounting to $13 billion by 2025, which will create 83,000 new jobs.

Interestingly enough, just after having received the Chinese “heavy weight” emissary, the new president of Sri Lanka, Sirisena, rushed to New Delhi on an official visit. One can well understand his “valse-hésitation”. Combining freedom and development is much like trying to be simultaneously in love with two beautiful women. Sri Lanka would like to love them both, but can’t have at the same time. In my next post, I shall describe the case of Thailand, which now finds itself in a similar dilemma.