Belt and Road: China presses economic buttons to deepen Indian Ocean clout

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Belt and Road: China presses economic buttons to deepen Indian Ocean clout

8:21 CAT | 12 Jan 2022

Chinese Foreign Minister Wang Yi, center, tours the Colombo Port City project during his visit to Sri Lanka on Jan. 9. [Photo: Reuters]

Wang Yi’s tour of Sri Lanka, Maldives and others sends message to India and U.S.

Chinese Foreign Minister Wang Yi kicked off 2022 diplomacy by signaling a renewed development push in the Indian Ocean region, where Beijing is locked in an intensifying geopolitical contest with India and the U.S.

The top diplomat hinted at a new economic network for nations that share the waterway during his visit to Sri Lanka this past weekend — the final leg of a weeklong five-country trip that included the Comoros and Maldives, as well as the littoral East African countries of Eritrea and Kenya.

Wang told Sri Lankan government officials that China has a blueprint for a development forum for Indian Ocean countries because they share “similar experiences and common needs.” This echoed the economic message that he had pressed home in the Comoros and Maldives — both of which, like Sri Lanka, have received Chinese development assistance, including cash for large infrastructure projects under the Belt and Road Initiative.

South Asian diplomats took Wang’s comments as a further sign of China’s determination to assert its presence across the Indian Ocean, beyond the narrow confines of bilateral ties with economically weaker island states. “Wang’s visits to the Maldives and Sri Lanka were more strategic, to reinforce China’s BRI diplomacy in the Indian Ocean, than bilateral diplomacy,” one veteran diplomat told Nikkei Asia. “It is also showing that China will stick to its soft-power economic approach to stand apart from the conventional arms-and-containment approach of its geopolitical rivals.”

Wang sought to amplify the economic edge China enjoys over regional rival India.

In the Maldives, he played up the significance of a landmark, multimillion-dollar BRI project: the 2-km Sinamale Bridge, which connects the island of Male, the Maldivian capital, with a neighboring island that is home to the country’s gateway Velana International Airport. He also pledged $63 million in new grants for infrastructure projects, which would include funds to cover the maintenance of the Sinamale Bridge.

In Sri Lanka, Wang dropped in at Colombo Port City, an artificial island built off the national capital’s coast to house a modern financial center. The project, now taking shape, is one of a growing list of infrastructure endeavors in the country backed by billions in Chinese investments and loans, including a new port, airport and highways.

China seemed keen to highlight BRI milestones but deflect attention from the Chinese loans that Colombo and Male are saddled with. Sri Lanka’s balance sheet shows $3.38 billion in such loans, not including debt to state-owned enterprises, out of a current total of $35 billion that the debt-strapped economy is struggling to pay creditors.

In any case, the choice of the Comoros for Wang’s 2022 tour followed his visit to the Seychelles, another Indian Ocean island country close to the African coast, at the start of 2021. Geopolitical analysts say Wang’s island-hopping conveys a message to India that Beijing is determined to secure beachheads in its backyard.

Wang’s tour “reinforces the importance of small states in the Indian Ocean for attention by major powers,” said Nilanthi Samaranayake, director of strategy and policy analysis at the Washington think tank CNA. China has also stepped up engagement with Mauritius and Madagascar.

His visit to the Comoros in the Mozambique Channel — a strategic waterway between southern Africa and Madagascar — coincided with an Indian naval presence: An Indian vessel was there to “provide ship repair assistance to the country’s coast guard,” Samaranayake said. “It underscores India’s continued engagement with Comoros, which has included delivery of rice and medical assistance by the Indian Navy in the past two years.”

Yet as they compete with each other for influence, China and India have both encountered their share of resistance in the region.

In the Maldives, an anti-Indian campaign has been spreading as a backlash against the pro-New Delhi government of President Ibrahim Mohamed Solih. In Sri Lanka, China took flak last year over a controversial shipment of fertilizer that Colombo rejected over concerns about apparently harmful bacteria — though Sri Lanka eventually bowed to Beijing and settled the $6.9 million bill on the eve of Wang’s visit.

Hardly ruffled by the spat, Wang made it clear that Beijing would not let its ties with Colombo be derailed over local anti-China sentiment. “Even though Sri Lanka-China ties have gone through rocky moments last year, the Chinese know that they can wait,” said George Cooke, a former Sri Lankan diplomat. “Chinese are interested in the location, Sri Lanka’s geography, and are pursuing smart diplomacy to avoid creating gaps for others to exploit.”

By Marwaan Macan-Markar