9-Dec-2017: Sri Lanka formally hands over its southern port of Hambantota to China

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.

Sri Lanka, in July 2017, cleared a revised deal for the Chinese-built port in Hambantota. The modified agreement is believed to be more profitable to Sri Lanka and also addresses security concerns raised by other countries. As per the deal, while the Chinese would manage port operations, no naval ship, including Chinese ones, can call at Hambantota without Sri Lanka’s permission.

Hambantota is right in the middle of vital energy supply lines in the Indian Ocean, connecting the Middle East and East Asia. 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 centerpiece of the $55bn China-Pakistan Economic Corridor.

Hambantota, which sits on Sri Lanka’s southern coast, provides access to critical Indian Ocean sea lanes. The acquisition of the port by China has spurred particular alarm in India, which is concerned about Beijing’s growing strategic and economic footprint in the Indian Ocean region.

25-Jul-2017: Sri Lanka clears revised deal for Hambantota port

Sri Lanka’s Cabinet has cleared a revised deal for the Chinese-built port in Hambantota. The modified agreement is believed to be more profitable to Sri Lanka and also addresses security concerns raised by other countries. As per the deal, while the Chinese would manage port operations, no naval ship, including Chinese ones, can call at Hambantota without Sri Lanka’s permission.

India’s apprehensions about the apparently growing Chinese presence in the island are well known, given the two countries’ competing strategic interests in the island. The Hambantota port is part of China’s Belt and Road Initiative. Chinese control of Hambantota, which is part of its modern-day “Silk Route” across Asia and beyond, as well as a plan to acquire 15,000 acres (23 sq. miles) to develop an industrial zone next door, had raised fears that it could also be used for Chinese naval vessels.