Sri Lankan waters run deep with China
By Sudha Ramachandran
BANGALORE - The first phase of Sri Lanka's Hambantota project, a showpiece of
the country's significant and growing cooperation with China, is almost
complete. Filling the harbor basin with water for the port on the southern tip
of the island begins on August 15 and the first ship is expected to dock at the
port by November.
Hambantota is several nautical miles north of a major shipping route that links
the Suez Canal with the Malacca Strait, which about 36,000 ships cross
annually. Once the entire project is completed, it is expected to transform Sri
Lanka into an important transshipment hub.
The project is more than just a port. On completion, the Hambantota Development
Zone will include a liquefied natural gas refinery, aviation fuel storage
facilities, three separate docks that
will give the port transshipment capacity, dry docks for ship repair and
construction, and bunkering and refueling facilities.
The entire project is expected to cost about US$1.5 billion and most of the
funding could come from China. Already the Chinese have provided 85% of the
first phase's total cost of $550 million as a soft loan and pledged $200
million toward the second phase. A consortium of Chinese companies led by the
China Harbor Engineering Company and the Sino Hydro Corporation is also
involved in the project's construction.
Besides the Hambantota project, China is involved in several others on the
island. It is constructing a second international airport at Hambantota, a $248
million expressway connecting the capital Colombo with the airport at
Katunayake, a $855 million coal power plant at Norochcholai, and a performing
arts theater in Colombo.
China's Huichen Investment will provide $28 million and manage a special
economic zone at Mirigama for Chinese investors. In addition, China has
provided $1million as humanitarian aid for internally displaced persons and
technical assistance for demining operations in northern and eastern provinces.
China's relationship with Sri Lanka goes back many decades. In the 1950s, the
countries signed a rubber-rice agreement that assured Sri Lanka with a large
market for its rubber, even as it was provided with low-priced rice.
While the Sino-Sri Lankan bond is decades old, the relationship expanded
remarkably after Mahinda Rajapaksa became president in 2005. Since 2006,
Beijing has provided Sri Lanka with $3.06 billion in financial assistance for
various projects. Its aid to Sri Lanka, which was a few million dollars in
2005, jumped to $1.2 billion in 2009, over half the total aid the island has
been offered by various countries. China is Sri Lanka's largest aid donor
An important reason for the close ties between the Rajapaksa government and
China is Beijing's robust endorsement and support of Colombo's conduct in the
war against the Liberation Tigers of Tamil Eelam (LTTE). China was
"instrumental to some extent in the Sri Lankan government's success in
defeating the LTTE", said China expert Srikanth Kondapalli, an associate
professor at the Jawaharlal Nehru University in New Delhi. "Colombo was trying
to purchase arms from abroad for years and only China supplied it with weaponry
on a sustained basis."
Many in Sri Lanka favor the burgeoning relationship with China for reducing
dependence on neighboring India, whose presence had been enormous. "Chinese
help to Sri Lanka, unlike that from India, is free from conditions," said
Soosipillai Keethaponcalan, senior lecturer at Colombo University's Department
of Political Science.
Unlike India, which did not fully support Rajapaksa's military operations
against the LTTE and which refrained from supplying it with weapons that would
worsen the plight of civilians, China had no such qualms. It fulfilled
Colombo's wish-list for military hardware, asking no questions, and has stood
by Colombo in various international forums when it has been accused of gross
human-rights abuses and war crimes.
In 2008, Sri Lankan Foreign Secretary Palitha Kohana told the New York Times
that Sri Lanka's new donors "conduct themselves differently. Asians don't go
around teaching each other how to behave," he said. "There are ways we deal
with each other - perhaps a quiet chat, but not wagging the finger." China's
way of dealing with Sri Lanka by not raising uncomfortable questions works well
for the Rajapaksa government.
Economic and strategic reasons are behind China's interest in Sri Lanka. The
island provides it with a market for its goods. More important is the strategic
interest. It is located close to India's southern coast. A presence in Sri
Lanka enhances China's access to the Indian Ocean. As mentioned earlier, Sri
Lanka is just a few nautical miles from an important sea lane, one that is
taken by tankers carrying 80% of China's oil.
"China's influence in Sri Lanka is as major as that of India's," said John
Gooneratne, a retired Sri Lankan diplomat and author of A Decade of
Confrontation: Sri Lanka and India in the 1980s. India's investment in
projects in Sri Lanka is largely in the war-torn Tamil areas, not visible to
the majority Sinhalese community. "China has the 'knack' of making grants/loans
for projects that visibly project the Chinese image - the Bandaranaike
Conference Hall, the Courts complex, and now a Cultural Complex [under
construction] in Colombo," he told Asia Times Online.
"There is reason for India to be concerned over the growing Chinese influence
in Sri Lanka, particularly in the long term," says Kondapalli.
And the worry is showing.
Indian security analysts have pointed out that while at present there is no
talk of a Chinese naval base on the island, the possibility of one at
Hambantota at a later stage cannot be ruled out.
At the height of the war against the LTTE, India's then national security
adviser, M K Narayanan, went public with India's concern over Colombo sourcing
arms from China. More recently, India reached agreement with Colombo to set up
a consulate in Hambantota, the district where the China-funded project is being
built. India has a high commission in Colombo and a consulate in Kandy.
Consulates in Jaffna and Hambantota are in the pipeline. This huge presence on
a small island seems rather excessive. Sri Lankans believe the proposed
Hambantota consulate is aimed at "keeping an eye" on Chinese activity there.
The Sino-Sri Lankan relationship is not without its problems. Bilateral trade
has doubled over the past five years and China has emerged the second-largest
exporter to Sri Lanka and the 13th-largest export destination for Sri Lankan
exports. However, “the trade balance is overwhelmingly in China's favor",
Kondapalli told Asia Times Online.
Sri Lanka's exports consist of raw materials, rubber, tea, spices, gems and
some minerals. "The Lankans want a diversification of the trade basket.
Besides, Lankan traders are also having problems with the Chinese banking
system," he said.
An issue that could trouble Sino-Sri Lankan relations in the coming years is
that of China bringing in its own workers. This has triggered tensions in
several countries such as Zambia, where Beijing is involved in big projects.
Media reports have also drawn attention to claims that China uses convicts on
overseas projects, a charge that Beijing has denied. Such allegations,
especially if proved true, have the potential of triggering anti-China public
sentiment and souring the current Sino-Sri Lankan bonhomie.
Sri Lanka has taken care not to allow its dalliance with the Chinese to offend
India. It has repeatedly clarified that it will keep India's security concerns
With the end of the war in Sri Lanka last year, India's role in the island has
diminished. All the same, the government recognizes it cannot afford to
antagonize India, and geographical proximity to India is a factor that Colombo
cannot ignore. Decision-makers in Colombo are unlikely to have forgotten past
In the 1980s, when the civil war was unfolding, the Sri Lankan government
sourced weapons from countries like the United States, the United Kingdom,
Israel, Pakistan and China - all with whom India was not on cordial terms at
that time - ignoring India's security concerns. That sparked a series of moves
by India that culminated in its provision of limited arms and training to the
Tamil militants. Then in June 1987, when India violated Sri Lankan airspace and
dropped relief supplies to Jaffna's beleaguered Tamil population, the J R
Jayawardene government appealed to its Western friends and Asian allies for
assistance. But little concrete help was forthcoming.
China, for instance, expressed strong disapproval of the "bullying action of
big powers", but stopped short of naming India. It gave Colombo some arms, but
that was it. China was aware that "it was too far away from Sri Lanka to
sustain any military support operation on the island", Kondapalli said. Beijing
advised the Sri Lankan government to pursue a political solution to the ethnic
conflict, reminding Colombo that "distant waters don't put out fires on your
doorstep", Gooneratne, then in the Sri Lankan diplomatic service, recalled. It
was proximate countries that were in a position to do so.
This is a fact that Colombo will bear in mind as it does a careful balancing
act between the two Asian giants.
Sudha Ramachandran is an independent journalist/researcher based in
Bangalore. (Copyright 2010 Asia Times Online (Holdings) Ltd. All rights
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