Sri Lanka’s geographical position in the Indian Ocean means that it has often found itself chafing under the bit of colonial powers seeking to dominate the shipping lanes between the Middle East and Asia.
Less well known is the fact that the first maritime power that tried to assert its control was not the Portuguese in 1489, but imperial China in 1408. According to Sri Lankan chronicles, the Chinese admiral Zheng He tried to force King Vijayabahu to pay tribute to the Ming Emperor and carve a tablet in his celestial honour. When Vijayabahu refused, he was packed off to China on the admiral’s treasure fleet.
The Chinese have a slightly different take on the matter. They say Zheng got caught in the crossfire between the Hindu Tamils in the north and two Buddhist kingdoms in the centre and south of the country (the more recent civil war was fought along similar ethnic lines, with China’s arms sales helping the government to defeat the Tamils).
But history may now be about to repeat itself with Sri Lanka’s new president, Maithripala Sirisena, pledging to roll back Chinese investment on the grounds that it is a new form of imperialism and has primarily benefited the former president and his cronies. Key will be what happens to China’s largest investment – a $1.5 billion port city development on reclaimed land in the capital city Colombo. According to Ceylon Today, the Chinese were awarded 88 hectares of the 233-hectare site on a 99-year lease. Only four months ago Xi Jinping laid the foundation stone for the Monaco-sized project. But it may yet turn out to be the modern day equivalent of Zheng’s tablet, with Sirisena pledging to cancel the project during his election campaign.
Over the past decade Chinese investment in Sri Lanka has risen 50-fold. China is now the island’s largest lender and donor by some margin. The most high profile projects have all been located close to former President Mahinda Rajapaksa’s hometown of Hambantota. These include Mattala Rajapaksa International Airport, which has been shunned by most airlines on the grounds that it is dangerously sited (it’s on the flight path of migrating birds). One former opposition MP decried it as a total waste of public funds, suggesting it would be an achievement if the government made enough money back to pay for painting its walls.
Close by is the Magampura Mahinda Rajapaksa Port, also named after the former president. For China, the port has a prime location along its much-touted 21st Century Maritime Silk Road linking the Middle East to Asia (see WiC253).
Ceylon Today reports that a Chinese firm has a 35-year lease on four out of seven of the container berths at Hambantota. Another company has a similar lease over the China Merchants-funded South Container Terminal in Colombo – and allowed one of China’s nuclear submarines to dock there just before Christmas, prompting protests from India.
Sirisena says foreign investment will now be scrutinised differently. “The land the white man took by military strength is now being obtained by foreigners for ransoms to a handful of people,” he said in his manifesto. He is also concerned about the debt Sri Lanka has incurred to pay for Chinese-funded infrastructure projects. “Generations of our children and grandchildren will not be able to completely finish paying,” he argues. “If this trend continues, our country will again become a colony and we will be slaves.”
Indian newspapers have reacted with glee to Rajapaksa’s ousting at the ballot box. Many believed he overplayed the China card to deter Indian efforts to lobby for Sri Lanka’s Tamil population, and the Business Standard suggests that weakened Chinese influence means India can now displace China as “Sri Lanka’s primary ally”. But Sri Lanka needs more investment in infrastructure, which isn’t one of India’s strongest suits, and one of China’s more obvious strengths. Sirisena is promising clean and competitive bidding for all future infrastructure projects. The Sri Lankan FT hopes it will not just be a case of “new asses; old liquor.”
© ChinTell Ltd. All rights reserved.
Exclusively sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.