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.

Southasia - - CONTENTS - By Si­jal Fawad

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.

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