In a significant move, China has pledged to develop Sri Lanka’s strategic infrastructure, including a deep sea port and the capital’s airport. The announcement came after talks between Sri Lanka’s Prime Minister, Dinesh Gunawardena, and his counterpart in Beijing.
Colombo International Airport Enhancement
China has offered assistance to develop the Colombo International Airport, a crucial gateway for air travel in the region. The airport’s expansion had been on hold since Sri Lanka’s sovereign debt default in 2022. With China’s support, the airport is expected to undergo modernization and capacity enhancement, benefiting travelers and boosting connectivity.
Hambantota Port Development
The southern sea port of Hambantota, located on te country’s southern coast, will also receive attention. In 2017, China secured a 99-year lease for Hambantota port, sparking security concerns in India, a regional rival. The port, handed over to a Chinese state-owned company, has strategic significance due to its proximity to major shipping routes. China’s commitment to its development is likely to enhance maritime trade and connectivity in the Indian Ocean.
Debt Restructuring and Economic Assistance to Sri Lanka
China, as Sri Lanka’s largest bilateral creditor, has pledged to assist in the country’s restructuring of external debt. This restructuring is a critical condition for maintaining a $2.9 billion bailout from the International Monetary Fund (IMF). While Beijing’s specific position on debt restructuring remains undisclosed, Sri Lankan officials have indicated that China may extend loan tenures and adjust interest rates.
Sri Lanka faced a foreign exchange crisis in 2022, leading to a sovereign default on its $46 billion foreign debt. Months of protests resulted in the ousting of then-President Gotabaya Rajapaksa. Premier Li Qiang assured continuous support for the country’s debt restructuring process and economic development.
Regional Implications in Sri Lanka
India and the United States closely monitor developments in Sri Lanka. Both nations express concern about China’s growing influence in the region. While Sri Lanka maintains that its ports will not be used for military purposes, New Delhi remains cautious about Chinese research vessels calling at Hambantota, fearing potential espionage.
As China and Sri Lanka deepen their strategic partnership, the island nation’s infrastructure development will play a pivotal role in regional dynamics. The collaboration between the two countries holds promise for economic growth and connectivity, but it also raises geopolitical questions.
Disclaimer: This article is based on official statements and available information as of the publication date. Any subsequent developments may not be reflected here.
