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How China is gaining ground in Lanka with `pro-India’ Ranil govt; By Commodore R. S. Vasan IN

C3S Paper No. 0053/2016



When Maithripala Sirisena and Ranil Wickremesinghe took over the government in Sri Lanka, their main claim was to undo the wrongs done by the previous Mahinda Rajapakse regime to the national economy and foreign policy. There was widespread apprehension in Sri Lanka that Mahinda was selling out the national interests of Sri Lanka to China on all counts. So when Sri Lankan Prime Minister Ranil Wickremesinghe was about to visit China, there was a high expectation. But the recently concluded visit turned out to be a mixed bag and had economic and strategic connotations of mammoth proportions for all the players in the coming decades.

One of the most significant discussions was on the Colombo Port development which was to be built at a cost of more than $1.4 billion but had been put on hold. This project had meant reclamation of at least 233 hectares from the sea of which 88 hectares would be given to the Chinese on a lease for 99 years and another 20 hectares on perpetual lease where Chinese law would apply in a special zone. The project was earlier stalled after the negative experience of some African countries where China had invested and due to environmental concerns. It turned out that in these projects undertaken by the Chinese, there was no benefit to the host country in terms of business or employment generation as the Chinese brought in their prisoners to work.

But one year down the line, bogged by economic slowdown and by the weight of loans (about $8 billion) staring at the present government in the face, Ranil had no choice but to go back to China. The visit was preceded by discussions between Chinese and Sri Lankan ministers early this year and China was only too happy to cash in on the opportunity .

China does have a firm grip on Sri Lanka with a sagging economy , mounting debt repaymentservicing, and the plunging of the rupee against the US dollar. Thus Sri Lanka had to mend fences with China.

Without going into specific details of the memorandum of understanding signed by the delegation led by Ranil, it is suffice to say that the areas of cooperation included economy , investments, technology , sports, tourism, financial services, water supply and science. Sri Lanka in any case was already onboard for the Maritime Silk Road project (MSR) for facilitating regional economic integration and connectivity in Asia, Africa and beyond.

As far as China is concerned, the visit of Ranil went according to the script which allowed the Colombo port project to be taken up again along with other infrastructural investments and the development of Hambanthota and the Mattala airport.

China obviously was pleased as it was not just looking at economic investments but at long-term opportunities for engagement with the island to serve its own future strategic needs in the Indian Ocean. From a strategic viewpoint, the stateowned Global Times let the cat out of the bag when on the day of Ranil’s visit it said, “Currently, the Chinafunded constructions in Pakistan cannot serve as a strong foothold for China, given the calamitous state of Pakistan’s security. Sri Lanka can be of great importance for China in the security strategic layout in the Indian Ocean. It will not only provide security assurances for nearby navigation channels, but will also promote the 21st Maritime Silk Road.“

At the end of the Sri Lankan Prime Minister’s visit, it is clear that the relations between the two countries are back to where they were during Rajapaksa’s regime. Ranil was seen as going back on his preelection promises where he asserted that the environmentally damaging Chinese projects would not be allowed and Sri Lanka would build bridges with India. From the point of view of India, with the change of government in India, the new NDA-led government was seen as trying to regain its influence in the neighbourhood by engaging the SAARC countries including Pakistan. The “neigh bourhood first“ initia tive of the present gover nment is yet to pay divi dends as it has to come out of dec ades of mishan dling of the bor der is sues. In dia has to recalibrate its own n e i g h b o u r hood policies to ensure that it does not concede strategic space to China which is pulling out all stops to achieve its long term objectives.India should work on Ranil’s proposal in the early 2000s about building a land bridge to connect the two nations in addition to proactive measures to connect the people and integrate the economy of the two countries.

To balance its initiatives with China, Sri Lanka is moving forward on the Economic and Technical Cooperation Agreement (ECTA) with India which has been pending for some time. There is a need to resolve the vexed fishing disputes in the Palk Straits. The trilateral defence agreement between Sri Lanka, Maldives and India also needs to be strengthened for promoting maritime stability and safety . The issue related to handling Chinese advances in the Indian Ocean which has the potential of changing geo-strategic contours needs to be dealt with.

[Commodore R.S Vasan IN (Retd) is Director, C3S and Head, Strategy and Security Studies. Email:]

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