China's To Launch A New $1.4 Billion Port City Sri Lanka

Discussion in 'China' started by esolve, Sep 17, 2014.

  1. esolve

    esolve Regular Member

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    Colombo (AFP) - President Xi Jinping was Tuesday due in Sri Lanka where he will launch construction of a Chinese-backed $1.4 billion port city as he promotes his vision of a "maritime silk road" in the face of growing competition from Japan and India.

    China is increasingly asserting its influence in the Indian Ocean, with Sri Lanka a midway point on one of the world's busiest international shipping lanes.

    It has overtaken India to become the largest investor in Sri Lanka, and has also consistently supported Colombo in its efforts to resist a UN investigation into alleged war crimes. India, by contrast, has pushed Sri Lanka to ensure accountability.

    Xi, the first Chinese head of state to visit Sri Lanka in 28 years, said no country should be allowed to intervene in the affairs of the small island nation, which has historically come under the influence of regional power India.

    "China... resolutely opposes any move by any country to interfere in Sri Lanka's internal affairs under any excuse," Xi said in a letter published on the front-page of Sri Lanka's state-run Daily News.

    "China and Sri Lanka need to turn our wishes into a driving force and enhance exchanges and cooperation between us in maritime, business, infrastructure, defence, tourism and other areas to accelerate the renewal of the maritime silk road for the benefit of our two countries and peoples."

    Xi's call came amid repeated Sri Lankan assurances that relations were based on commercial rather than security considerations.

    The Chinese president arrives from the neighbouring Maldives, where he secured support for his "21st century maritime silk road", an initiative that seeks to secure trade routes, largely through economic diplomacy.

    During his visit, Xi will launch construction of a new $1.4 billion port city being built with funding from Beijing.

    Colombo (AFP) - President Xi Jinping was Tuesday due in Sri Lanka where he will launch construction of a Chinese-backed $1.4 billion port city as he promotes his vision of a "maritime silk road" in the face of growing competition from Japan and India.

    China is increasingly asserting its influence in the Indian Ocean, with Sri Lanka a midway point on one of the world's busiest international shipping lanes.

    It has overtaken India to become the largest investor in Sri Lanka, and has also consistently supported Colombo in its efforts to resist a UN investigation into alleged war crimes. India, by contrast, has pushed Sri Lanka to ensure accountability.

    Xi, the first Chinese head of state to visit Sri Lanka in 28 years, said no country should be allowed to intervene in the affairs of the small island nation, which has historically come under the influence of regional power India.

    "China... resolutely opposes any move by any country to interfere in Sri Lanka's internal affairs under any excuse," Xi said in a letter published on the front-page of Sri Lanka's state-run Daily News.

    "China and Sri Lanka need to turn our wishes into a driving force and enhance exchanges and cooperation between us in maritime, business, infrastructure, defence, tourism and other areas to accelerate the renewal of the maritime silk road for the benefit of our two countries and peoples."

    Xi's call came amid repeated Sri Lankan assurances that relations were based on commercial rather than security considerations.

    The Chinese president arrives from the neighbouring Maldives, where he secured support for his "21st century maritime silk road", an initiative that seeks to secure trade routes, largely through economic diplomacy.

    During his visit, Xi will launch construction of a new $1.4 billion port city being built with funding from Beijing.

    The new development will go up next to a $500 million Chinese-owned container terminal, the only mega port in South Asia.

    But China faces competition for influence in the region from both India and Japan, which relies on the same maritime trade routes.

    Japanese Prime Minister Shinzo Abe travelled to Sri Lanka earlier this month, securing an agreement that the two countries would forge stronger maritime links.

    India's new Prime Minister Narendra Modi, meanwhile, has embarked on a regional charm offensive since taking office in May to restore relationships critics say the previous government neglected.
    - 'Nothing to fear' -

    Xi said he was keen to experience the charm of Sri Lanka, calling it the "splendid pearl of the Indian Ocean."

    China has been accused of developing ports around India in a "string of pearls" circle of influence to counter New Delhi.

    But Sri Lanka's economic development minister Basil Rajapakse said ahead of the visit his country's close ties with China should not be a cause for concern in New Delhi.

    "We are looking for trade, investment and tourism," Rajapakse told AFP. "India is also looking to China

    "We are looking for trade, investment and tourism," Rajapakse told AFP. "India is also looking to China so I do not see anything wrong in our having close ties with them."

    The ambitious port city project being developed by Sri Lanka Ports Authority (SLPA) with Chinese backing will include a luxury marina and a Formula One race track.

    SLPA chief Priyath Bandu Wickrama said the port would be "based on commercial interests".

    "We will not allow our ports for any military purposes," he told AFP. "There is nothing for anyone to fear."

    Beijing has already financed the construction of Sri Lanka's second international airport and another deep sea port in the southern district of Hambantota, the home constituency of President Mahinda Rajapakse.

    During his visit, Xi is expected to commission the third phase of a 900-megawatt coal power plant China has built in the island's north-western cost.

    But a military aircraft maintenance facility Sri Lanka sought to establish with Chinese help has been in limbo since India privately objected to its chosen venue, the eastern port district of Trincomalee.

    Trincomalee is a natural deep sea harbour which allied forces used as a staging post during World war II and is still considered strategically important.
     
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  3. Neo

    Neo Senior Member Senior Member

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    Sri Lanka is traditionally best performing country in the Sub Continent and with the right policies she can attract a lot of FDI from China and other investors. I like the idea of Maritime Silk Route and Sri Lanka being the heart of it.

    Btw, is it going to be a smart city?
     
  4. prohumanity

    prohumanity Regular Member

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    Does it still matter to use little neighboring countries against a major nation from a military standpoint? My logic is ...If a war breaks out between two giant nations ,both equipped with 1000s of Nuclear missiles, submarines, fighter jets and all kind of weaponry....they can easily destroy each other fully...
    how a little country on side..will be of any benefit in such a scenario? I think both China and India are trying to help these smaller neighbors to help their economies ..which will lead to an educated, well fed and peaceful population ..which will not be attracted to terrorism.
     
  5. prohumanity

    prohumanity Regular Member

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    Does it still matter to use little neighboring countries against a major nation from a military standpoint? My logic is ...If a war breaks out between two giant nations ,both equipped with 1000s of Nuclear missiles, submarines, fighter jets and all kind of weaponry....they can easily destroy each other fully...
    how a little country on side..will be of any benefit in such a scenario? I think both China and India are trying to help these smaller neighbors to help their economies ..which will lead to an educated, well fed and peaceful population ..which will not be attracted to terrorism.
    Also, this economic help ensures that some outside mega power do not succeed in using these little nations to blackmail China or India by trying to choke flow of oil which is crucial for these fast growing economies...in other words ..to stop some mega bully from blockade of oil flow .
    Its possible that China and India's interests converge here and they have no ill intentions.
     
  6. amoy

    amoy Senior Member Senior Member

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    The first coal-fired power plant appeared on the Sri Lankan 100 Rupee - Crushing News DSMAC

    [​IMG]
     
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  7. Ray

    Ray The Chairman Defence Professionals Moderator

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    ‘China card against India’

    Sri Lanka’s defence bureaucracy, he said, seems sustained by a notion that China will function has a counterweight to India. “There is exaggeration in that understanding,” he said, adding that the ‘China card’ was drastically diminishing in size in the context of emerging Indo-China relations in the last few years, and particularly so after Prime Minister Narendra Modi assumed charge. The defence bureaucracy also had a “garrison state delusion’ that Sri Lanka could be another Pakistan or, they seemed to China as being to Sri Lanka what the US is to Israel.

    Critics also point to the nature of assistance offered by China. Development economist and principal researcher at the Jaffna-based Point Pedro Institute of Development Muttukrishna Sarvananthan said he was pessimistic about Sri Lanka’s engagement with China as “political imperatives override economic imperatives”. Observing that much of the economic engagement was politicised, he said progress on Indian projects had slowed down since 2012, after India voted against Sri Lanka at the Human Rights Council. “The housing project began in 2010, but the progress has been slow. Similarly, the government seems to be deliberately delaying completion of the northern railway line,” he said. In 2014, India abstained from voting on the resolution, pressing what analysts termed a “reset button” in Indo-Lanka diplomacy, however China's apparently growing influence remains a concern among many.

    Economic engagement ought to be read carefully, Mr. Sarvananthan stressed, noting that Chinese commercial loans were rather expensive with high interest rates, while India’s assistance included a considerable grant component. “There are serious implications for our [Sri Lanka’s] growth and debt,” he said. In December 2013, Sri Lanka’s outstanding debt to China in disbursed loans was nearly Rs. 196 billion, according to The Sunday Times here.

    On the overall engagement with China, Mr. Jayatilleke said it is time the more hawkish decision makers realised that Sri Lanka does not enjoy an open ended strategic commitment on the part of China. “Sri Lanka should also understand that neither India nor China is in the business of intruding into each other’s sphere of interest that would be in variance to their strategic core,” he said.

    ‘Sri Lanka a pearl in the Indian Ocean’ - The Hindu
     
  8. hit&run

    hit&run Elite Member Elite Member

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    Article by The Chindu journalist trying to downplay Chinese building SL as counterweight against India. Look at the audacity of the Newspapper, the same News paper who was staunch Modi hater is now trying to portray that being Modi in-charge there is no need to be alarmed.

    What if, the Modi was not in-charge?

    Just a glance at the debt SL owe to China tells how dangerously the pet will cater its master.
     
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  9. amoy

    amoy Senior Member Senior Member

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    Sri Lanka thankful for China’s help | Daily News Online : Sri Lanka's National News
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    China's currency swap agreement to bring multiple benefits | Daily News Online : Sri Lanka's National News
    [​IMG]
    Military leaders were discussing about wiping out terrorist hideouts.
     
  10. amoy

    amoy Senior Member Senior Member

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    Let bygones be bygones, Colombo urges Beijing, as Chinese loans take their toll

    Relations between Colombo and Beijing have been strained since Rajapaksa was ousted in January’s presidential election. The new unity government of President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe has put on hold several Chinese infrastructure projects alleging graft.

    Beijing this month rushed a special envoy, Vice-Minister of Foreign Affairs Liu Zhenmin, to Colombo to engage the unity government, reinstated by parliamentary elections in August.

    Nearly 70 per cent of the infrastructure projects in the country in the last six years have been funded by China and built by Chinese companies. With foreign debt shooting up since China started pouring concrete and money into Sri Lanka, economists now say the country is heading into a debt crisis.

    “In 2010, foreign debt was 36 per cent of the GDP (gross domestic product). By the end of 2013, it was about 65 per cent, and is estimated to rise to 94 per cent this year,” said Palitha Ekanayake, a former director-general at the ministry of rural economy. “Debt instalment and interest obligations already exceed government revenue. That means we have to borrow to square existing loans.”

    READ MORE:Passive investor to partner in crime: How China lost the plot in Sri Lanka
    With the exchequer creaking and the fiscal deficit widening, Karunanayake will next month present one of the most difficult budgets in Sri Lanka’s history.

    Foreign reserves have fallen from US$9.1 billion in August last year to US$6.8 billion by the end of September this year. To beef up reserves, he has urged citizens holding Swiss bank accounts to move their money to Sri Lanka, promising there would be “no questions asked”.

    The Sri Lankan rupee has lost about 7.5 per cent this year and foreign investors are selling down rupee bonds. The government is, naturally, desperate for foreign direct investment (FDI).

    [​IMG]
    The stalled Colombo Port City project has become a bone of contention between Beijing and Colombo. Photo: Reuters

    “The focal point of our coming budget will be FDI. We need foreign participation and we will give very specific incentives to encourage FDI. It’s a good opportunity for Chinese companies to invest here,” said Karunanayake.

    China, however, has made it clear that it first wants to see an end to the impasse over its existing projects, especially a mega reclamation project called Colombo Port City, before making fresh commitments.


    Asked what Sri Lanka is doing to address Chinese concerns over its investments, the minister said: “We did not create the problem, we inherited it. But it has to be fixed all the same. Any country would want FDI. but in accordance with the laws of the land.”
     
  11. DingDong

    DingDong Senior Member Senior Member

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    :bounce: Sri Lanka is trapped between the devil and the deep sea. All thanks to the misdeeds of the past regime.

    Seems like this new bonhomie is because of the Loan Trap Sri Lanka has found itself into, and not because of some Geo-political reasons.

    I am sure that other countries wanting to have close relations with China have taken "Note".
     
  12. amoy

    amoy Senior Member Senior Member

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    Sri Lanka says would consider visit by China navy ships| Reuters
    Reuters, Oct 18, 2015, 12.18PM IST

    Sri Lanka would consider allowing Chinese naval ships to visit again but no request has been forthcoming yet, the country's defense secretary said on Sunday.

    Sri Lanka's previous government had caused concern in India with its close ties to Beijing, including allowing Chinese submarines to dock.

    New Sri Lankan President Maithripala Sirisena has unnerved China though with his re-examination of relations, including a $1.5-billion Chinese-invested "port city" project in the capital Colombo.

    Visiting Beijing in February, Sri Lanka's foreign minister said future visits by Chinese submarines were unlikely.

    But Sri Lankan Defense Secretary Karunasena Hettiarachchi, who only took up his post last month, told Reuters in Beijing that he would give serious thought to new requests from China for naval ships to call, even if there are no plans currently.

    "It has not come to my table yet. If it comes I'll give it due consideration. If it comes in the right track we'll consider it seriously," he said on the sidelines of a military forum.


    "If it is really interesting and worthwhile, sometimes we do combined operations and exercises with military vessels from around the world, no discrimination."

    China has built a seaport and airport in Sri Lanka's south, raising fears it is seeking influence in a country with which India has traditionally had deep ties.

    China's defense minister told the head of the Sri Lankan navy in June he wanted to ensure a "continuous and stable" development of military ties.

    Hettiarachchi said his government was just trying to make sure it was being transparent in its relations with China, and that military ties should remain strong.

    "There was a complaint about the previous regime about transparency but I think we are more transparent and our relations are going to be stronger in times to come."

    (This story corrects title to defence secretary not minister)
     
  13. sabari

    sabari Regular Member

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    Last edited: Oct 21, 2015
  14. sabari

    sabari Regular Member

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