China is being allowed to continue work on its Colombo Port project, after the Sri Lankan government took some time to make a decision. Beijing is not resentful because China needs the base, says DW’s Frank Sieren.
Sri Lankan President Maithripala Sirisena made no secret of the fact that he was looking for other partners in recent months. He showed the cold shoulder to China, which until then had been a reliable partner to the country. Immediately after being elected almost a year ago, he put a huge port project that his predecessor Mahinda Rajapaksa had clinched with Beijing on hold. The official justification was that the project did not meet environmental standards.
However, there must have been other reasons for the president's decision to suspend investment worth over $1 billion. The island needs money for infrastructure projects to stimulate the economy. A civil war that lasted two decades and party rivalries have hindered growth and economic development. China is one of the biggest investors in Sri Lanka and its money is needed more than ever.
Distance from his predecessor
However, Sirisena wanted to distance himself from his predecessor, who was rumored to have particularly good relations with China, expanding both economic and military ties. Both India and the US had reacted in an increasingly frosty way to China and Sri Lanka cozying up to each other. Both wanted to prevent China from exerting more influence over Sri Lanka and thus secure access to the strategically important sea routes between the Bay of Bengal and the Arabian Sea. Sirisena had hoped to reassure Washington by suspending the Chinese-funded port project.
But neither Indian Prime Minister Narendra Modi nor US President Barack Obama made offers that were as attractive as Beijing's. Sirisena had to admit, faster than he might have liked, that there's no point in courting a bride if she does not come with a substantial dowry. China funds some 70 percent of the infrastructure projects in Sri Lanka, which has also received $5 billion in aid from China in the five past years alone.
Building to begin again
The green light came last week. China will be able to start building again in February. The official argument was that an environmental study had been concluded and there were no more obstacles to construction. One detail has changed, however. Instead of being able to buy the site, China will have to lease it. This is a setback for Beijing.
A year ago, Beijing announced that it would invest 1.4 billion dollars into the Port City Project. It is a strategically important base for expanding the maritime Silk Road. Colombo represents a pearl in the “string of pearls” sea trading route that China is building in the Indian Ocean. It is President Xi Jingping's dream to build a maritime Silk Road in addition to re-creating the historic Silk Road land route to bring Asia and Europe closer together.
AIIB invests billions
The Asian Infrastructure Investment Bank (AIIB) was founded with an authorized capital of 100 billion to set up the infrastructure for the Silk Road projects. Xi went on a state visit to Sri Lanka to launch it. Building began on the Colombo port site in September 2014. The plan is for factories and high-tech companies to populate the 450 acres, which will also house a financial center.
It might not be a love marriage between Sirisena and Xi, but it's an alliance where neither partner bears grudges.
DW correspondent Frank Sieren has lived in Beijing for over 20 years.