The New Pearl
Chinese investments in Sri Lanka are not only raising alarm bells for India but are also giving it a run for its money.
How will India react to the Chinese investments going into Sri Lanka?
Even though Sri Lankan External Affairs Minister, G.L. Peiris, may have claimed that China’s growing influence in Sri Lanka is “not at the expense of any other country (and) there is no danger to any other country,” India can’t help but raise brows over the strengthening bilateral relationship between the two countries.
With China working hard to foster stronger trade and economic ties with Sri Lanka, in addition to greater cooperation in security and defense, it is not surprising that analysts have focused their minds on China’s strategic plans to garner greater influence in Asia. Bearing in mind China’s evolving rivalry with superpower America, it is not too hard to conjecture that the country requires Sri Lanka’s support in setting a strong presence in Asia in general and South Asia in particular. This is also a subtle message to Washington, which is aware of the oriental giant’s expanding influence in the emerging continent and is not too comfortable with it.
Delhi isn’t too pleased with the progress in Sino-Lankan bilateral relations either and looks upon the mutual amiability as a threat to its growing influence in Asia. When Sri Lankan president Mahinda Rajapaksa visited China in May this year, relations between the two countries were uplifted to the status of a ‘strategic cooperative partnership’ with analyst M.K. Bhadrakumar describing the move as sym- bolic, remarking, “This development will pose formidable challenges to Indian diplomacy.”
China’s extending helping hand for infrastructural projects in the island nation in the post-war scenario include a whopping $2.2 billion in development loans; a level that easily surpassed the extent of Indian assistance to her neighbor after the country achieved victory over the Tamil rebels. In fact, in an article in Lanka Business Online, China has emerged as the top lender to the island country during January to April 2013, financing $615.3 million for various projects.
But this is just one part of China’s strategic moves in Sri Lanka. Other efforts include strengthening trade ties through negotiations of a Free Trade Agreement (FTA). Needless to say, the latter will facilitate greater access for Sri Lankan products across the Chinese border and Chinese-Sri Lankan trade can be safely be expected to receive a big boost.
Increasing military cooperation between the lately popular ‘friend’ nations is another bone of contention that is likely to make Indian policymakers roll in their sleep. It is a stark reminder that Colombo will not be dependent on Indian military assistance as much as it previously had been un-
der the Indo-Sri Lanka Accord. Clearly, a shifting balance of power in the continent is on the cards.
And speaking of cards, China seems to be playing its cards quite well. There is no prohibition per se for Sri Lanka in developing its foreign policy relations with any country, including India. This makes China’s stance appear even more innocent than what one may directly believe. It also works well for Sri Lanka; after all, which country would want to be dictated about who to befriend and who not to. For China, strategic ties with Sri Lanka are a part of its efforts towards gaining a stronghold in Asia. In fact, many commentators and policy analysts have come up with a ‘String of Pearls’ theory, referring to China’s strengthening influence along its sea lanes of communication, including in maritime centers in countries such as Pakistan, Bangladesh and Sri Lanka, the latter being termed a key ‘pearl’ in this supposed string.
It is believed that through the smooth transport and communication channels helped by these strategic moves, China is preparing for a whopping increase in local oil consumption through an uninterrupted flow of the energy fuel from the Middle East and Africa across the String of Pearls. Not to forget, China is also alleged to be strategically ‘surrounding’ India through its planned progress via this suggested strategy.
Besides, as Reuters pointed out in May this year, “Sri Lanka’s location astride an ancient and lucrative trade route in the Indian Ocean makes it of strategic commercial and military interest to Washington, New Delhi and Beijing,” particularly mentioning how the country had become a “visible front in the competition between the Asian giants.”
Other economic driving factors include China’s need to tap into other markets as the Yuan may likely be allowed to appreciate in the coming few years and a country that has recently come out of war and attracts tourists from all over the world is a great one for Chinese companies to set up shop. There are also claims that China is the one benefiting from infrastructural development as Chinese contractors, subcontractors and laborers are involved in major projects rather than Lankan nationals and most of the raw material is also of Chinese make.
The motive to outshine the US in a fiercely developing strategic rivalry is another reason behind China’s carefully engineered moves. For the US and its pro-Asia policy ‘Pivot to the Pacific’, finding allies in countries such as India and Japan has turned out to be a successful move. With China, the loyalty rests in countries like Bangladesh, Pakistan, Cambodia, Vietnam and Sri Lanka.
Overall, as China gains stark prominence in global and regional geopolitics and its emergence as a superpower seems like a greater reality every passing day, one can better understand why it is striving for influence in the Indian Ocean through the strategic location of the island country.