China's Silk Road, One Belt One Road "Socialism With Chinese Characteristics" Privatizing More Ports Around the World

China's Silk Road, One Belt One Road "Socialism With Chinese Characteristics" Privatizing More Ports Around the World
Sri Lanka, Struggling With Debt, Hands a Major Port to China
" In recent months, however, there have been signs that China’s partners are starting to become wary over the terms being dictated to build projects under the One Road banner. Pakistan, Nepal and Myanmar have all recently cancelled or sidelined major hydroelectricity projects planned by Chinese companies. The projects would have been worth a total of $20bn.”

https://www.nytimes.com/2017/12/12/world/asia/sri-lanka-china-port.html?...

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By KAI SCHULTZDEC. 12, 2017
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The Hambantota port on Sri Lanka’s southern coast. China has been shoring up its presence in the Indian Ocean. CreditLakruwan Wanniarachchi/Agence France-Presse — Getty Images
NEW DELHI — Struggling to pay its debt to Chinese firms, the nation of Sri Lanka formally handed over the strategic port of Hambantota to China on a 99-year lease last week, in a deal that government critics have said threatens the country’s sovereignty.

In recent years, China has shored up its presence in the Indian Ocean, investing billions of dollars to build port facilities and plan maritime trade routes as part of its “One Belt, One Road” initiative to help increase its market reach.

Along the way, smaller countries like Sri Lanka have found themselves owing debts they cannot pay. Sri Lanka owes more than $8 billion to state-controlled Chinese firms, officials say.

Sri Lankan politicians said the Hambantota deal, valued at $1.1 billion, was necessary to chip away at the debt, but analysts warned of the consequences of signing away too much control to China.

“The price being paid for reducing the China debt could prove more costly than the debt burden Sri Lanka seeks to reduce,” said N. Sathiya Moorthy, a senior fellow specializing in Sri Lanka at the New Delhi-based Observer Research Foundation.Sri Lanka has long been in India’s orbit, but its relationship with China has strengthened in recent years. As Western nations accused Mahinda Rajapaksa, the country’s former president, of grievous human rights abuses during the final stages of Sri Lanka’s nearly 26-year civil war, China extended billions of dollars of loans to Mr. Rajapaksa’s government for new infrastructure projects.

In July, the state-controlled China Merchants Port Holdings Company signed a deal with the Sri Lanka Ports Authority to control a 70 percent stake in the Hambantota port, which lies on the southern coast of the country.

Last Friday, Sri Lanka’s Parliament voted to grant tax concessions to a joint venture led by China to develop the port. On Saturday, the government completed the handover of the port to two state-controlled entities run through China Merchants Port Holdings, which has already made its first payment of $300 million to the Sri Lankan government.

“With this agreement, we have started to pay back the loans,” Prime Minister Ranil Wickremesinghe said in an address to Parliament. “There will be an economic zone and industrialization in the area which will lead to economic development and promote tourism.”

Critics said the lease could set a precedent for Sri Lanka and other countries that owe money to China to accept deals that involve the signing over of territory. After the original port deal was signed in July, Namal Rajapaksa, a member of Parliament and son of the former president, asked on Twitter whether the government was “playing geopolitics with national assets.”

Perceiving a threat to its regional hegemony, India has also watched with suspicion as cranes operated by Chinese firms began to dot the skyline in Colombo, Sri Lanka’s capital. To reset the imbalance, India has partnered with Japan to develop a port on Sri Lanka’s eastern coastline, and it has entered into talks to invest in an airport near Hambantota.

“India has been overwhelmed by China’s offensive in its strategic backyard,” said Constantino Xavier, a fellow at Carnegie India in New Delhi.

But across South Asia, there have been some signs of pushback to Chinese investment, including the recent sidelining of hydropower projects in Nepal, Pakistan and Myanmar.

Mr. Xavier said Sri Lanka’s dependency on China has alarmed some countries. “Countries in the region are beginning to realize the long-term costs of Beijing’s massive investment promises,” he said.

China signs 99-year lease on Sri Lanka’s Hambantota port

Critics denounce move as an erosion of country’s sovereignty
https://www.ft.com/content/e150ef0c-de37-11e7-a8a4-0a1e63a52f9c

China signs 99-year lease on Sri Lanka’s Hambantota port Critics denounce move as an erosion of country’s sovereignty Read next Manufacturers respond to health edicts in food and drink recipes For Beijing the Hambantota port project is a linchpin of the 'One Belt One Road' initiative
Kiran Stacey in New Delhi DECEMBER 11, 2017 4 Sri Lanka has formally handed over its southern port of Hambantota to China on a 99-year lease, which government critics have denounced as an erosion of the country’s sovereignty. The $1.3bn port was opened seven years ago using debt from Chinese state-controlled entities. But it has since struggled under heavy losses, making it impossible for Colombo to repay its debts. In 2016, Sri Lankan ministers struck a deal to sell an 80 per cent stake in the port to the state-controlled China Merchants Port Holdings. But that agreement sparked protests from unions and opposition groups, forcing the government to renegotiate it. Under the new plan, signed in July, the Chinese company will hold a 70 per cent stake in a joint venture with the state-run Sri Lanka Ports Authority. Ranil Wickremesinghe, Sri Lanka’s prime minister, welcomed the deal during the official handing over ceremony at the weekend. He said: “With this agreement we have started to pay back the loans. Hambantota will be converted to a major port in the Indian Ocean. “There will be an economic zone and industrialisation in the area which will lead to economic development and promote tourism.” Share this graphic But the renegotiated plan has failed to quell dissent within Sri Lanka. When it was first signed Namal Rajapaksa, Hambantota’s MP and son of former president Mahinda Rajapaksa, tweeted: “Government is playing geopolitics with national assets? #stopsellingSL”. For Beijing, the Hambantota project is a linchpin of the “One Belt One Road” project, which aims to build a new Silk Road of trade routes between China and more than 60 countries in Asia, the Middle East, Africa and Europe. That project is underpinned by a network of harbours across the world that have put China in a position to challenge the US as the world’s most important maritime superpower. Other similar developments in the region include the Gwadar port in Pakistan, which is the centrepiece of the $55bn China-Pakistan Economic Corridor. But some have accused Beijing of using projects such as this to increase its regional political power, noting the length of the lease agreed by Sri Lanka is the same as that which gave Britain control over Hong Kong in the 19th century. Constantino Xavier, a fellow at foreign policy think-tank Carnegie, said: “This is part of a larger modus operandi by China in the region. Hambantota port lying virtually empty last month © Simon Mundy “Beijing typically finds a local partner, makes that local partner accept investment plans that are detrimental to their country in the long term, and then uses the debts to either acquire the project altogether or to acquire political leverage in that country.” New Delhi has become so concerned about Beijing’s plans at Hambantota that it has entered talks with Sri Lanka to operate an airport nearby. In recent months, however, there have been signs that China’s partners are starting to become wary over the terms being dictated to build projects under the One Road banner. Pakistan, Nepal and Myanmar have all recently cancelled or sidelined major hydroelectricity projects planned by Chinese companies. The projects would have been worth a total of $20bn.