If this agreement between Sri Lanka and China is finalised, a Chinese naval base in Hambantota port and airbase in the nearby airport may become a reality. The Chinese invested about $9 billion, and when the Lankans expressed inability to start repayment of the loan (about $1.1 billion for the Hambantota port), a controversial agreement is being worked out shortly as "debt relief", which would permit a Chinese company to hold 60 per cent to 80 per cent of the management control for a 99- or a 50-year lease. Today both the new Hambantota port and its nearby airport lie unused and have become a financial burden on cash-strapped Sri Lanka.
The first nation to learn a bitter lesson from China’s "cheque book diplomacy" was Sri Lanka, which under the previous pro-China President Mahinda Rajapaksa, allowed the Chinese to build a new railway, a new container terminal at Colombo port, super highways connecting Colombo to the tourist centre of Galle and then onwards to the new Chinese-built port of Hambantota, with a new Chinese-built Mattala Rajapaksa International Airport near Hambantota. Similarly, it offered aid and assistance to the Philippines, whose new President, Rodrigo Duterte, made overtures to Beijing. On Jwhen the Permanent Court of Arbitration (PCA) at The Hague ruled against China stating that it had "no historic rights based on the Nine-Dash Line" and creation of artificial islands in the South China Sea, the Chinese waived-off all outstanding loans of Cambodia, which prevented the Asean nations from issuing a joint statement supporting the PCA ruling about the South China Sea. Its defence budget of $152 billion is four times that of India’s paltry $40 billion, while the Chinese Navy’s share of the defence budget is about $50 billion, as compared to approximately $5 billion allocated to the Indian Navy.Īll this at a time when disturbing media reports indicate that a bankrupt American Westinghouse (owned by Toshiba) is still trying to sell six civilian nuclear reactors to India, and the US is trying to get Pakistani help in extricating its forces from Afghanistan, is now expected to "rehyphenate" Pakistan with India by offering it a similar "nuclear deal", and India’s open wooing of the US since 2006 has alienated our age-old strategic partner Russia, who is now selling arms to Pakistan, supported China’s "one belt, one road (OBOR)", at a time when tensions are rising further with Pakistan sentencing Kulbhushan Jadhav to death for "spying".Ĭhina is using "cheque book diplomacy" to make friends and also acquire real estate in strategically-located foreign lands as part of its global OBOR, which using China-Pakistan Economic Corridor (CPEC) will connect it to Europe by sea and land for trade. With a $12 trillion economy still growing at about 6.5 per cent annually and $3 trillion in foreign exchange reserves, China is moving very rapidly to become a true global power with a two-ocean Navy.
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