Over the last few decades, there has been a notable revitalization in the usage of the historical Silk Roads that run along the spine of Afro-Eurasia. This is partly due to the end of the Cold War, which has led to increased connectedness and economic relations between countries in the former Soviet bloc and the West. These countries remain pivotal on a global scale being located at the historic heart of the Silk Roads. One country that has used this circumstance to their advantage is China. 

In 2013 Chinese President Xi Jinping announced the nation’s plans for their Belt and Road Initiative. This multi-trillion dollar project intends to fund infrastructure in roughly 150 countries around the world, connecting their economies back to the East Asian Giant. China believes that by doing this it can create an interdependent global economy. This can also be viewed as an ambitious attempt to displace the United States as the leader in the global economy, which has been a primary goal of Chinese economic investment in recent years. 

The Belt and Road Initiative essentially consists of two interworking parts. The first of which is the “Belt,” the overland trade routes across Afro-Eurasia. It seems that this is what garners more attention in the media due to the fact that it runs through the historical heartland of the world, and more importantly, across petroleum-rich nations. However, the other half of the Chinese initiative is the “Road.” This is made up of the maritime trade routes and ports along the Indian Ocean that connect China to the Middle East, Africa, and Europe. I would make the argument that this half of the initiative is the more important of the two and could potentially contribute directly to global Chinese economic dominance. However, one of the major cogs in this plan is the island nation of Sri Lanka. 

China’s involvement in Sri Lanka has appeared to somewhat slip under the radar of many global media outlets as they tend to focus more on its investments in Pakistan and various Central Asian countries. However, Sri Lanka may just be one of the single most important pieces in the puzzle that is the Belt and Road Initiative. 

Historically, Sri Lanka has sat at a pivotal point along shipping lanes in the Indian Ocean. During the height of the Silk Roads, Muslim traders frequented these routes with Sri Lanka serving as a focal point for their voyages. Today, seaborne shipping accounts for a staggering 90% of international trade, and a further 80% of this trade at some point travels through the Indian Ocean. Because of its location along one of the most trafficked routes in the world, Sri Lanka has become a major player in international trade. Unsurprisingly, China has taken note of this and has been working for the past few decades to invest in the nation and benefit from its location.

China’s initial opportunity to do so came in 2001 after a terrorist militia known as the Liberation Tigers of Tamil Eelam bombed the Bandaranaike Airport right outside Colombo. Because this was the most important airport in the nation, the attack caused a dip in Sri Lanka’s tourism industry. Along with a host of other factors, this led to one of the worst economic periods in Sri Lanka’s recent history. At this point, China agreed to loan money to the hard-hit nation, lending $1.1 billion to the Sri Lankan government to establish a large port on the Southern coast of the island at Hambantota to help stimulate the economy. However, the Sri Lankan government was unable to repay the loans, forcing them to lease 70% of the port on a 99-year lease to China Merchants’ Port Holding Company, a subsidiary of the Chinese government. Hambantota itself is a strategically located port and one of the crown jewels in China’s “String of Pearls,” a term given to a network of Chinese ports and economic centers in the Indian Ocean. Despite still not even being the busiest port in the nation, Hambantota continues to increase its profit margins and will soon perhaps become one of the most strategic ports in the Indian Ocean. 

While Hambantota is perhaps the most notable of China’s investments in Sri Lanka, they in fact have financed many other projects across the country. These include the construction of the Colombo-Katunayake Expressway and Port City Colombo, an economic and commercial zone in which the Chinese government will own roughly half the area. Both of these projects, among others, are expected to help the growth of the Sri Lankan economy in the next few decades. However, they also represent economic growth for China and further involvement in one of the most strategic places on the “Road” in the Indian Ocean. 

Some claim that China’s tactics of taking over Hambantota are predatory in that they initially expected Sri Lanka to be unable to pay back their loans. They believe the Chinese Communist Party (CCP) is only trying to exploit an already struggling country and will use this to their economic advantage through methods such as debt-trapping. However, I would consider China’s involvement in Sri Lanka to be less predatory and more so positive business for both nations. While in the short term it appears that the building of Hambantota has put Sri Lanka further into debt, many fail to see that this is only a fractional amount of their accumulated debt. In the long run, once economic conditions naturally improve in Sri Lanka, these investments could have positive effects on their economy. Chinese involvement in both Colombo and Hambantota could potentially lead to more foreign investment and modernization in the country. 

While Sri Lanka perhaps won’t yield as much profit for China as other maritime locations it has invested in such as the Pakistani port of Gwadar and the Suez Canal, it is just as important. It functions as an important fulcrum, centrally located on perhaps the most important maritime route in China’s Belt and Road Initiative. Almost all trade along the North Indian Ocean will soon pass through either the ports of Hambantota or Colombo. China has long recognized the potential of Sri Lanka, and one can assume that it will continue to play an important role in its economic plan for years to come.