Geopolitics Of Sri Lankan President Dissanayake’s Visit To China – Analysis
His first State visit to China as President, has far reaching economic and geopolitical implications
Sri Lankan President Anura Kumara Dissanayake will be on a State Visit to China from January 14 to 17, his first such visit to China after being elected President in September last.
The visit is expected to have far reaching implications for the Sri Lankan economy as well as for Sri Lanka’s geopolitical positioning vis-à-vis India and China, regional powers competing for dominance over South Asia.
Faced with the necessity to give India, the immediate and only neighbour, primacy in its sphere of influence, Dissanayake paid his first overseas visit as President to India in mid-December last year.
The wide-ranging talks he held in New Delhi resulted in a Joint Statement with as many as 34 points.
It was only to be expected that Dissanayake would be visiting China next, to keep a balance between the two South Asian powers and also in recognition of China’s place as Sri Lanka’s economic benefactor, defence equipment supplier during the war, and an unwavering supporter at the UN Human Rights Council (UNHRC) where Sri Lanka has been regularly assailed by unsympathetic Western powers.
Dissanayake has a delicate task ahead of him in Beijing. His every word will be noted and interpreted by the two regional powers. The stakes are high, given the strategic compulsion to go along with India on the one hand, and the need to be accommodative to China which had emerged as the top creditor and development partner since 2010. However, thus far in his tenure as President, Dissanayake has been able to walk the right rope between India and the West on the one hand, and China on the other.
China Well Disposed
By all accounts, China’s leaders are well disposed towards him, not only because of his anti-imperialist (anti-West) background but because of the overwhelmingly popular mandate he and his National Peoples’ Power (NPP) had secured.
The Chinese Foreign Ministry spokesperson, Guo Jiakun, told the media that Dissanayake’s visit is of “great importance to the development of China-Sri Lanka relations”.
Guo said: “Since our two countries established diplomatic ties in 1957, the bilateral relationship has stood the test of the changing international landscape, always maintained sound and steady growth, and set up a fine example of friendly relations and mutually beneficial cooperation between countries different in size.”
“China stands ready to work with Sri Lanka through the upcoming visit to deepen political mutual trust, and expand high-quality Belt and Road cooperation and practical cooperation in various fields for continuous new progress in advancing the China-Sri Lanka strategic cooperative partnership,” he added.
Guo’s statement encapsulates the wide range of the relationship. China had deepened its strategic ties with Sri Lanka during the Presidencies of Mahinda Rajapaksa, Gotabaya Rajapaksa and Ranil Wickramasinghe, with the building of a container terminal in Colombo (CICT), of the Hambantota harbour, development of Colombo Port City, and the building of roads and railways. China hopes that Dissanayake would follow the trend set by his predecessors. According to sources, both Dissanayake and President Xi Jinping would go in for investments rather than loans.
After a severe economic crisis in 2022, Sri Lanka announced its first sovereign default of about US$ 46.9 billion. India stepped in with about US$ 4.5 billion, enabling the country to stage a slow recovery and later qualify for the International Monetary Fund (IMF) bailout package.
But China refrained from responding to Sri Lanka’s requests for extending large monetary assistance. Initially, Beijing wanted Colombo to set its financial house in order. As of August 2024, China’s share of Sri Lanka’s foreign debt was reportedly 20%.
However, in June 2024, Sri Lanka restructured US$ 4.2 billion of debt owed to the Export Import Bank of China (Exim Bank). It was reported that the average interest rate for bilateral loans was around 2.1% and that there would be a moratorium on debt payments until 2028.
The ground for further Sino-Lankan economic cooperation already exists, said Dr.Palitha Kohona, former Sri Lankan Ambassador to China.
“China Harbour and Hunan Construction had committed to invest US$ 1.2 billion in the Colombo Port City. SINOPEC has begun a multi-billion dollar investment, including in petroleum outlets, bunkering facilities and oil refining in Hambantota.”
“SinoPharm had plans to establish a pharmaceutical, mainly vaccine, packing plant in Sri Lanka. Chinese solar and wind power companies have recently expressed considerable interest in Sri Lanka’s renewable energy sector, including solar panel fabrication as Sri Lanka plans to obtain 70% of its electricity from renewables by 2030. Electric vehicle manufacturers have begun assembly and manufacture of vehicles in Sri Lanka, not only for the local market, but also to target the booming regional markets. Chinese telecom giants may also be interested in the potential of Sri Lanka,” Kohona added.
Other sources said that during Dissanayake’s visit an agreement would be signed to develop the hinterland of the Hambantota port as an industrial zone with Chinese investments.
Major investments are planned in Colombo Port City. “A South Asia Commercial and Logistics Hub (SACL) is to come up with an outlay of US$ 392 million at the Colombo port. The project is a joint venture between China Merchants Port Holdings (CMPH) and the Sri Lankan government. A luxury ocean-side facility will be built on 269 hectares of reclaimed land at the Port City. It is a joint venture between the Sri Lankan government and the China Harbour Engineering Corporation (CHEC),” Kohona said.
The former Ambassador, however, added a note of caution. He said that Sri Lanka should guarantee foreign investments, improve the conditions for doing business, explore markets in China and its companies must participate in international exhibitions.
Ticklish Issues
While it will be smooth sailing for Dissanayake on economic and investment issues, geo-strategic issues like visits by Chinese research vessels to Sri Lankan port will be ticklish. China insists that the vessels in question are not spy vessels, as India alleges, but are bona fide oceanographic research vessels.
After talks with Indian Prime Minister Narendra Modi on December 16 in New Delhi, Dissanayake said in a statement that he had “assured the Indian leader that Sri Lanka will not permit its territory to be used in any manner inimical to the security of India as well as towards regional stability.”
Back in Sri Lanka, Kohona argued that there is no reason to treat Chinese vessels any differently from the others as long as they complies with Sri Lanka’s access requirements. “We have steadfastly asserted our non-aligned status,” he pointed out.
Dissanayake sounded New Delhi on his difficulties in readily accepting India’s conditions given the fact that the issue involves an equally important power, China. And India seemed to be accommodative as a result. In his interaction with the media, Indian Foreign Secretary, Vikram Misri, seemed to acknowledge Sri Lanka’s predicament when he said that the Sri Lankan government was looking at the issue as there were a number of considerations Sri Lanka needed to take into account. But he did not fail to add that India had highlighted its perspectives including the role that it plays in maritime security in the region.
One Year Moratorium
Under pressure from India, President Ranil Wickremesinghe had imposed a one-year moratorium on visits by such research vessels, no matter to which they belonged. But the Indians were not happy with the blanket ban. They wanted only Chinese vessels to be banned.
The moratorium ended in November last and Sri Lankan Foreign Minister Vijitha Herath played it safe saying that the government had formed a committee to look at the moratorium issue.
Oceanographic Research
However, China continues to be keen on securing the right to send oceanographic vessels to Sri Lanka. It will raise the issue at the Beijing talks and attempt to persuade Dissanayake to accommodate it. This was indicated on December 18, when Ms.Qin Boyong, Vice-Chairperson of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) came to Colombo and told the President that China has “plans to restart maritime research activities, which were temporarily halted for various reasons, along with initiating relevant projects.”
The other matter China might raise is a wish to make Sri Lanka join its Global Developmental Initiative (GDI) and the Global Security Initiative (GSI). If this idea is put forward, it would be interesting to see how Dissanayake and New Delhi would react. India is wary about China-led institutions of this sort as they could impinge on its sphere of influence, namely South Asia.