Chinks in China’s voyage to Sri Lanka

China, under Rajapaksa family’s rule in Sri Lanka has always enjoyed close,
warm and friendly relations. Despite reservation from several lawmakers and civil
society members, the Sri Lankan government in May 2021, passed the Colombo
Port City Economic Commission Bill.
This has paved the way for China’s complete control over the area. After the
Hambantota Port, given to China under 99 years lease, the Colombo Port City is
the second largest project in Sri Lanka where Beijing will rule the roost. Yet China
has not stopped from adopting a high handed approach towards the South Asian
country when it tries to protect its interests.
“After the Sri Lankan government rejected an order of organic fertilizer from
a Chinese company, Beijing has been putting pressure on Colombo to accept its
consignment,” Policy Research Group, a US-based think tank said recently. A few
days ago, Sri Lanka disallowed a shipment of 99,000 metric tonnes of organic
fertilizer nano nitrogen worth $63 million from a Chinese company, Qingdao
Seawin Biotech Group Co Ltd after it was found to be contaminated with harmful
The Island country’s Atomic Energy Board and National Plant Quarantine
Service, where samples of the Chinese fertilizer were sent for testing, found them
full with pathogens and diseases harmful to soil, plants and humans. Scientists
from these institutions put their foot down, when the Sri Lankan government under
pressure from China, tried to go down deep into the matter.
Chinese pressure on the Sri Lankan government could be assessed from the
fact that a delegation from Qingdao Seawin Biotech Group Co Ltd, led by the
Chinese embassy personnel visited Sri Lanka’s Agriculture Ministry on November
8 to discuss the matter. According to the island country’s media outlet News Ist,
the meeting at the Agriculture Ministry took place with relevant stakeholders as per
a request made by Chinese ambassador to Sri Lanka, Qi Zhenhong. This took
place a week after China blacklisted Sri Lanka’s state backed People’s Bank and
advised Chinese companies not to do business with the Colombo-based bank.
It further exposed China’s imperious attitude towards Sri Lanka, the South
Asian country whose external debt to Beijing, as per Carnegie Endowment for
International Peace, is about 6 percent of the gross domestic product. Of the total
external debt, Sri Lanka owes $6.5 billion to China. This includes $1.5 billion Sri
Lanka received from China in terms of loans, currency swap and others in 2020.
This has impacted Sri Lanka’s economy hugely. In 2020, the country’s GDP
contracted by 3.6 percent, while foreign exchange reserves plunged by over a half
in one year through July to just $2.8 billion. This year in July, after the repayment
of $1 billion bond to investors, the island country’s economy further became weak
and vulnerable.
Yet China has not offered Sri Lanka any leniency on the economy, trade and
investment front. Beijing has given duty-free access to 97 percent of Bangladeshi
products since July 1, 2020, but Sri Lanka has been deprived of such benefits as
it doesn’t have a free trade agreement (FTA) with China. Similarly in June 2020,
China agreed to delay debt repayments from Maldives.
However, in spite of being the largest foreign lender to Sri Lanka, no such
favourable terms, even to provide some breathing space, have been granted to
the island country. Likewise, China-led assistance to Nepal falls into three
categories: Grants, Interest Free Loans and Concessional Loans. Sri Lanka, on
the other hand, has only interest-bearing loans from China. In October 2020, after
a Sri Lankan delegation visited China and requested the Chinese authorities for a
grant, did Beijing agree to provide $90 million in grant.
Such developments are not unknown to common Sri Lankans, who are
already seething with anger against China for its opacity in dealing with its activities
in the island country. Sri Lankan Buddhist monks who had led violent protests
against China-led project in Hambantota in January, 2017, resisted the passage
of the Colombo Port City Economic Commission Bill in May 2021. They saw in the
Bill a move to facilitate China to develop its colony on the Sri Lankan land.
On the other hand, several lawmakers belonging to the opposition parties
had warned the Rajapaksa government against passing the Bill in the country’s
parliament. SajithPremadasa-led Samagi Jana Balavegaya (SJB) had termed the
Bill as a threat to Sri Lanka’s sovereignty. One SJB lawmaker went to the extent
of comparing Chinese activity in the island country with those of colonizers like
Dutch, Portuguese and British. “For centuries we were ruled by the Portuguese,
Dutch and English. What the Chinese are doing is similar to that. We will have to
wait for another 400 years to drive them away,” Parliamentarian LakshmanKiriella
was quoted by a local daily as saying.
It speaks volumes of wariness among Sri Lankans over the growing Chinese
footprint in their country. But then, in the fight between David and Goliath, the Sri
Lankan judiciary is emerging as a fearless institution, ready to punish China for its
wrong doings. Instead of lifting the blockade over payment of money to the
Chinese company that shipped contaminated fertilizer, the island country’s
commercial court has extended the blockade over the payment to Qingdao Seawin
Biotech Group Co Ltd. Earlier, the country’s Supreme Court had objected to certain
provisions of the Colombo Port City Bill, stating that it was inconsistent with the
country’s Constitution. For an ordinary person, opposition to Chinese projects
could be merely a spark. But since Sri Lanka has started wobbling under the weight
of external debts, of which a sizable part belongs to China, there will be a day when
the nondescript spark will turn into a blaze, gutting Beijing’s ambitious goal to gain
strategic depth in this important Indian Ocean country.

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