China is poised to acquire an 80% stake in a strategically located port on Sri Lanka’s southern coast, according to The Wall Street Journal:
Under the deal, a copy of which was reviewed by The Wall Street Journal, China Merchants Port Holdings Co. would pay about $1.1 billion for its share of the port and adjoining land in Hambantota district.
Sri Lanka’s ports authority would own 20%. Officials said they hoped to complete the arrangement by early January.
Washington could react warily, depending on the details. The port, in Hambantota, lies along an important trade route linking the Middle East and Asia. And China’s navy has been stepping up its operations in the Indian Ocean as it seeks to project power westward.
“We will watch carefully,” a senior U.S. official said. “These things do have long-term implications.”
The slow and steady progress of China’s drive to control its connections with the rest of the world continues. One consequence will be to sharpen the rivalry between India and China. New Delhi has long been warily eyeing Beijing’s attempts to woo Sri Lanka with extensive investment and high-ticket military contracts, and has been unnerved by the frequent presence of Chinese submarines in Sri Lanka’s ports. The Chinese acquisition of the Hambantota port will surely exacerbate concerns that China is encroaching on India’s sphere of influence. Beijing’s improving relations with Colombo could also heighten worries in Tokyo and Hanoi about the balance of power in Asia.
China has been on a winning streak lately, scoring strategic victories in the Philippines, Malaysia, and now Sri Lanka, but Beijing’s rivals are unlikely to take such developments in stride. The Trump administration will have its work cut out for it if it seeks to challenge China without provoking a series of crises.