Sri Lanka isn’t a tipping point. It is not the one little country that China needs in order to achieve its hegemonic goals.
But it will be a big help. And the pattern of self-subjection to China is the same self-destructive pattern being followed by many countries. Poorly governed Sri Lanka is lurching into a debt trap set by a totalitarian country which will then demand that it be allowed to take over what it helped to build. Which will put China in a better position to achieve its ambitions than it was before.
Sri Lanka already knows all about it—firsthand (“China’s new deal with Sri Lanka: Should it worry India?,” Economic Times, January 17, 2025).
First there was China’s funding for the Hambantota port, which China now controls. In June 2018, the New York Times reported that after China had for years always given loans for construction of the port, a money pit, whenever Sri Lanka asked, eventually it came time to collect.
Mr. Rajapaksa was voted out of office in 2015, but Sri Lanka’s new government struggled to make payments on the debt he had taken on. Under heavy pressure and after months of negotiations with the Chinese, the government handed over the port and 15,000 acres of land around it for 99 years in December.
The transfer gave China control of territory just a few hundred miles off the shores of a rival, India, and a strategic foothold along a critical commercial and military waterway.
The case is one of the most vivid examples of China’s ambitious use of loans and aid to gain influence around the world—and of its willingness to play hardball to collect.
Vivid but not inescapably vivid. For now the Economic Times reports, in January 2025:
Sri Lanka will receive its largest foreign direct investment (FDI) from China in the shape of an oil refinery. China has offered to invest $3.7 billion to build the refinery during Sri Lankan President Anura Kumara Dissanayake’s state visit in China. This is part of China’s Belt and Road Initiative (BRI) under which it builds infrastructure and energy projects in smaller countries to create a global footprint. But often these projects turn out to be debt traps for host countries which are then forced to give control of the asset to China. Sri Lanka has already experienced such a debt trap with the Chinese project of Hambantota port. Since India and China rival for strategic footholds in the Indian Ocean, this refinery coming up near Hambantota could be a cause of concern for India.
Seems obvious that China will do the same thing again, subjecting Sri Lanka to further vassalage and subjecting India to further pressure. This is the strategy.
But to a certain kind of political leader, such considerations are lost in fog, not vivid at all. They have to do with a distant and indistinct future, the day after tomorrow; or a distant and indistinct past, the day before yesterday; therefore are hypothetical, theoretical, unreal, nothing practical and immediate. What’s important only is getting money now for the thing. And here is the People’s Republic of China offering money. Money is money. One cannot pass it up merely because of patterns of cause and effect revealed by a study of that dull subject, history.
Certainly India should be especially worried about what Sri Lanka is doing. But every country should be worried about it. About what it means.