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FINANCIAL CHRONICLE™ » EXPERT CHRONICLE™ » China’s Sri Lankan port grab adds a pearl to its string

China’s Sri Lankan port grab adds a pearl to its string

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Lotus Eater

Lotus Eater
Senior Equity Analytic
Senior Equity Analytic

China’s Sri Lankan port grab adds a pearl to its string Lankac10

Beijing’s action is part of an aggressive encirclement strategy that India must counter

On 20 May, the Sri Lankan parliament passed the Colombo Port City Economic Commission Bill that lays out the country’s legal framework governing the China-financed project built on land reclaimed from the Sri Lankan capital’s seafront, adjoining Colombo’s port. The bill effectively turns these 660 acres into Chinese sovereign territory.
But this should not come as a surprise. China’s shadow seems to loom dark over Sri Lanka whenever the Rajapaksa brothers—Mahinda and Gotabaya—win elections and come to power. Mahinda Rajapaksa is currently prime minister and minister for finance. He was president from 2005 to 2015, when Gotabaya served as defence minister. Today, Gotabaya is president; the Rajapaksas returned to power after the 2019 elections.

The previous Rajapaksa government had revelled in Chinese loans and projects, most famously the ambitious port built at Hambantota. Even though feasibility studies warned against it, the port was built by a Chinese state-owned enterprise with Chinese money. As expected, the port failed spectacularly. And the Chinese came to collect on their debt.

This was transparently the debt-trap-foreign-policy that has marked China’s world-girdling Belt and Road Initiative. Lend a country money to build infrastructure, get it constructed by Chinese companies, then, as per the not-so-fine print on the contract, take over the infrastructure built after the country fails to pay its Chinese debt. Sri Lanka fell for it. Or more likely, the Rajapaksas knew exactly what was going to happen, and were quite okay with it.
A New York Times report published in June 2018 after a months-long investigation alleged that the Chinese had paid the Rajapaksas substantial sums to see the project through. The NYT even listed specific details of how China Harbour, the company that had built the port, supposedly financed the brothers’ campaign during the country’s 2015 parliamentary election, from hard cash to saris for prospective supporters. The Rajapaksas lost those polls, but China’s plan would succeed anyway.

The new government struggled to service the debt the Rajapaksas had taken on. Repayments ballooned to nearly 85% of revenues. In 2017, a hapless Sri Lanka handed over Hambantota and 15,000 acres of nearby land to China on a 99-year-lease that was modelled, ironically, on the 19th-century concession for Hong Kong that Britain had extracted from China.

The port-grab had been China’s objective from day one. It now owns strategic territory only a few hundred kilometres from India. Chinese military submarines have been docking at Hambantota, which is today a key part of China’s ‘string of pearls’ strategy to encircle India somehow. And with Colombo Port City, Beijing is closer than ever to Kanyakumari.

In the meantime, China has also been active in other areas proximate to India. A recent report in Foreign Policy magazine reveals that Beijing has built at least three villages inside Bhutan, south of the Tibet border. The villages are served by more than 100km of new roads, a hydropower station, two Chinese Communist Party administrative centres, a signals and satellite communications base and military outposts.

The villages are part of a project to build hundreds of settlements along Tibet’s border. The residents, who are termed “soldiers without uniforms", are exhorted to make “every village a fortress and every household a watchpost". Their primary task is to guard China’s border and catch Tibetans attempting to flee to India or Nepal. Foreign Policy sees the Chinese moves as a shift from “nibbling at a neighbour’s territory to swallowing portions of it wholesale". The message to Bhutan is clear: “Cut your ties with India, or else…"

And on 27 May, Chinese state media CGTN carried an article by a Pakistani scholar that claimed that “the China-Nepal relationship is taller than Mount Everest".

Elsewhere in the Himalayas, the deadlock on the military de-escalation in Ladakh continues. China appears to be relying on its well-worn but effective playbook of dragging on negotiations endlessly, while the People’s Liberation Army (PLA) builds roads and permanent structures on the disputed land and its soldiers make themselves at home. The PLA appears to have settled in for the long haul all along the Ladakh border.

It is essential for India to recognize that being nice and hospitable to China does not work. Beijing almost certainly interpreted India’s past civility as simply a weakness of resolve. China is a civilizational state that operates with a strong sense of manifest destiny. That destiny, it believes, is tianxia, ‘all under heaven’ coexisting harmoniously. Harmony, however, means living by the rules that China and its ‘son of heaven’ emperor—a role that Xi Jinping has cast himself in—lay down. For three decades, China followed Deng Xiaoping’s ‘tao guang yang hui’ policy—conceal ambitions, hide your claws. Xi thinks that the time to maintain a low profile is past, and China can pursue its hegemonic goals openly and unabashedly. In fact, the word ‘hegemony’ barely describes what China thinks is its rightful place in the world—or rather above it.

India no longer has the excuse that China lied to us. Today, Beijing sees no need for subterfuge or camouflage. It’s all out there in plain sight. India must shed those shibboleths of the world being one family and act in unhesitant self-interest.

By Sandipan Deb
Sandipan Deb is a former editor of ‘Financial Express’, and founder-editor of ‘Open’ and ‘Swarajya’ magazines

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