Even during the height of its civil war, Sri Lanka remained under the international radar. It is not until the recent tragic Easter Sunday bombings that the world started to pay attention to this tiny island nation. There is one country, however, that has long held the glint of Sri Lanka in its eyes, the pearl of the Indian Ocean. That country is China.
Given the ambitious goals of China’s Belt and Road Initiative (BRI), this may not come as a surprise. With a new proactive foreign policy, China aims to create a seamless network of trade that stretches across Asia towards Europe and through the South China Sea and Indian Ocean. Naturally, Sri Lanka would be a key part of this network. One would assume that a mutually beneficial relationship would emerge from such a scenario. However the news that China had snatched Sri Lanka’s Hambantota Port and was in the process of claiming territory in the Colombo Port City project exposed the imbalanced relationship, leaving many wondering how this happened.
In a study completed in 2012 on intra-Asian urbanism and the development of satellite cities, Tom Percival and Paul Waley argue that to better understand these types of development, one must critically understand the important territorial and state influences emanating from the East Asia region, primarily through intraregional foreign direct investment. In Sri Lanka, these investments have been in the form of Chinese-funded large-scale infrastructure projects. Investigating these investments and the state’s relationships will lead to the answers of how Sri Lanka allowed a foreign country to seize its own land.
China’s so-called ‘debt-trap diplomacy’, which sinks vulnerable and developing states into an economically dependent relationship with China, has been cited as the main tool in which China has claimed territory in Sri Lanka. Though this process can be seen as the main harbinger of China’s territorial expansion, it is important to consider the underlying complex political and economic relationship between China and Sri Lanka that kick-started these events.
Bilateral ties between the states have been strengthening since the 1950s through various trade and aid agreements however it is through China’s involvement in the protracted ethnic civil war between the Sri Lankan state and Tamil separatists that this relationship deepened. China offered increased economic, military and arms support during the 2005 – 2014 period when Mahinda Rajapakse was President.The resulting genocide that took place at the end of the war in 2009 was the subject of considerable western international scrutiny. Since this time China has continued to step in and shield the Sri Lankan state from accountability and prosecution of alleged war crimes at the UN and International Criminal Court.
The trust that had been developed over the war and post-war period created the perfect environment for China to begin offering aid in the form of investment in large-scale infrastructure projects including the Hambantota Port and Colombo Port City project. The attractiveness of these investments for the Sri Lankan state stems from the fact that they do not come packaged with any broader policy reform goals (such as those related to post-war justice reforms) as underscored by China’s non-interventionist policies. With very few options for Sri Lanka to fund its city-building goals, China became a strategic partner towards these interests. Unfortunately for Sri Lanka, the Chinese government has taken advantage of the island nation’s relative political stability, weak enforcement of regulations, need for economic growth and need of protection from war crime prosecutions of the Rajapakse government.
During the 2005 – 2013 period, Chinese investments totalled US$5.664 billion, of which 98 percent came in the form of high-interest loans. Overpriced projects, marked by the corruption of the Rajakapakse government, have left Sri Lanka owing approximately 10 percent of its debt (or US$8 billion) to China. As a result, the Sri Lankan state finds itself in a debt cycle with China, offering not only financial payments but also majority stakes and territory in the process. In 2016, after incurring substantial financial losses, Sri Lanka handed over a majority stake in the Hambantota Port project on a 99-year lease. This coupled with the Colombo Port City project’s initial plan to offer 20 hectares of freehold land and 88 hectares of land on a 99-year lease has caused major security concerns for India and its partners.
This form of intra-Asian development can be observed as a method of Chinese territorial expansion. Though China’s primary interest in Sri Lanka is due to its strategic role in China’s BRI, its interest is also predicated on countering India as an emerging power and competitor in the region. The development of Hambantota Port and the Colombo Port City project have been observed as a strategy of encirclement to overpower India’s influence in the region and suppress its defences (Miller, 2017). These fears have not been allayed with the news of two nuclear-powered Chinese submarines docking in Colombo harbour. Furthermore, with the news of the construction of its first foreign naval base in Djibouti, China is further disrupting the status quo by positioning itself militarily at the gateway of the Maritime Silk Road.
It is clear that China’s BRI does not simply operate within a capitalist logic, but must be considered within a geopolitical logic as well (Lee et al., 2018). How Sri Lanka lost its port and (part of) a new city is not only due in part to Chinese fiscal pressure but also in Sri Lanka’s own corrupt political structures and leaders that were ready to accept vast sums of money for political cover and power. Observing Sri Lanka as a hapless victim of Chinese greed is disingenuous and takes the onus off of the Sri Lankan state to address its own home grown ills that advanced the loss of it’s land to China.
Miller, T. (2017). China’s Asian dream. London, UK: Zed Books.
Lee, S., Wainwright, J., and Glassman, J. (2018). Geopolitical economy and the production of territory: The case of US–China geopolitical-economic competition in Asia. Environment and Planning A: Economy and Space 50(2): 416-436.
- This article was originally written as coursework for GY438 Cities and Social Change at LSE in spring 2019.
About the author
Sindu Sivayogam is an Urban Planner/Designer based in Canada. She has recently completed her MSc in City Design and Social Science at the LSE, receiving the Hobhouse Memorial Prize for Best Overall Performance with Distinction. She is currently working with UN Habitat on infrastructure rehabilitation in Syria.