KAMALIKA PIERIS

China sees Sri Lanka as a country with much potential. You have 65,000 kilometers of land. You     always say a small island country. No, Sri Lanka is a big country. It is a great country. You have good culture, you have long history, you have a legal system, education is okay. You should be proud of the culture, history and your country conditions. So why do you call yourself a tiny island, asked the Chinese Ambassador in 2016.

Sri Lanka is No 1 in the region said the Chinese ambassador at the 2017 University of Colombo, Sujata Jayawardene Memorial talk. The China-Sri Lanka relationship is a bilateral one, not unilateral, he continued. It is joint support.  It is a people-to-people exchange, not simply government to government. Chinese tourists are increasing.  His emphasis throughout the talk was on friendship with Sri Lanka. He said this over and over again.  There will be no occupation of Sri Lanka.

China is Sri Lanka’s No 1 financial support, also the longest aid giver, continued the ambassador. Last year our grants, donation and commercial and concessionary loans to Sri Lanka amount to RMB 10 billion. China has also given an outright loan of USD 77.2 million. China is Sri Lanka’s second largest trading partner  and Sri Lanka’s second most significant source of import, as well.  Sri Lanka exports to China have been growing at a faster rate than with the rest of the world.

Sri Lanka was China’s second most preferred place for investments. The South Terminal of the Colombo harbor was constructed and operated by China Merchant Holdings on a 35-year BOT deal. The terminal commenced operations on August 2013, almost 15 months ahead of schedule. This terminal is the first deep-sea port in Sri Lanka capable of handling mega container ships. The China   Aero Technology international engineering Corporation CATIC-ENG) complete the Katunayake runway overlay project 18 days ahead of schedule,   CATIC used it own funds of USD 35 million.

China is   culturally active in Sri Lanka. A Chinese Buddhist roofing ceremony,   carried out by a Shaolin Buddhist delegation   took place in August 2009    to mark the completion of Phase 1 of Norochcholai coal power plant. A Buddha statue in Shaolin tradition was to be installed there. There were also plans in 2009 for a high level Chinese Buddhist delegation of 102 members to visit Sri Lanka to enhance the bilateral Buddhist cultural relations of over 1000 years between China and Sri Lanka.

Chinese language is now taught in Sri Lanka, with help from the Confucius Institute, China. China’s largest private retailer, Kumming Xinzhi group opened it fifth overseas Chinese bookstore in 2013 in Colombo.  It sells books which teach the Chinese language. In 2015, Ladies College, Colombo, announced that they would be teaching Mandarin Chinese at its Department of Vocational Studies. For ‘public relations’ China had a calligraphy painting session for children at the J.D.A. Gallery, Colombo. It held a joint art exhibition with Sri Lanka participants at BMICH in 2016, under the title ‘One belt One Road (OBOR) exhibition’.

Pathfinder Foundation has  signed MOUs with ‘China Institute of Contemporary international Relations’ (CICIR) ‘Chinese Peoples Association for peace and Disarmament’,  Hainan based ‘Boao Forum for Asia’  and China’s Fujian province Commerce department. Pathfinder Foundation has also set up the ‘China-Sri Lanka cooperation studies centre’ (CSLCSC) in 2015. It will link with the ‘Shanghai Institute for International Studies.’ After the inauguration of this centre, the Chinese ambassador had a discussion, which lasted for over an hour, with a group of erudite Buddhist monks. He said he would help them learn Chinese and study in China.

Relations between Mahinda Rajapakse and China were always excellent. During his period of government China-Sri Lanka relations went from ‘everlasting friendship’ to ‘strategic cooperation’. In 2011, President Mahinda went to China to celebrate the 70 anniversary of China’s University of Foreign studies   and the University’s Sinhala language studies Unit’s 50th anniversary. 14 Chinese students were studying for their first degree in Sinhala language while three others were studying for the MA in Sinhala.

In 2013, Rajapaksa paid a four-day state visit to China at the invitation of Chinese President Xi Jinping. The two sides agreed to upgrade their relations to a strategic cooperative partnership, and vowed to promote cooperation in such areas as trade, investment, tourism and defense. In 2014, Xi met Rajapakse in Shanghai during the Conference on Interaction and Confidence Building Measures in Asia.  During their meeting, Xi called for joint efforts to build the 21st Century Maritime Silk Road and promote the China-Sri Lanka free trade talks. The Sri Lankan president vowed to facilitate maritime cooperation with China and invited Xi to visit his country.

Former President Chandrika Kumaratunga said that the Chinese authorities gave President Mahinda Rajapaksa Rs.15 billion. The Chinese embassy when contacted, said that they had not met Ms Kumaratunga for more than a year. The story was a malicious falsehood .The embassy had communicated this to Rajapaksa’s Secretary.

China had built the Hambantota port, Mattala airport and had started on the Colombo Port City when the Yahapalana government took office in 2015. The Yahapalana government started off by criticizing China. They wanted to show that they were now under the protection of America. Yahapalana made its anti-China policy a main plank of its 2015 presidential election campaign.  It undertook to drum China out as a development partner immediately after capturing power. it also made a solemn pledge to stop the showpiece Chinese project, the Colombo Port City. Yahapalana was going to put a stop to the Port City. They were not going to allow China to own any part of it.

Then Yahapalana government got into financial difficulties. No one was prepared to give them money, especially when International rating firms like Fitch reduced the nation’s credit rating. America has no money to give either. So Yahapalana government had to turn to China. They had to physically go to China. China was not coming to Yahapalana. President Sirisena went   to China once and Prime Minister Ranil Wickremasinghe went twice to negotiate.

Yahapalana wanted China to restructure   its USD 8 billion debt, waive certain loans and also give fresh loans.   Prime Minister Ranil Wickremasinghe tried to get China to swap part of the USD 8 billion it owes to China into equity in infrastructure projects and offered to sell stakes in Sri Lanka companies. However Sri Lanka was not allowed to renegotiate the matter.  China pointed out that China had incurred a loss of USD 140 million due to Port City project being suspended for about one and a half years. There was   also a USD 125 million penalty demanded by the Chinese contractor for the delay. But Sri Lanka was a ‘dear friend’ so China won’t ask for compensation.  No port city, no nothing said China. So Ranil returned home to announce that the Port City in Colombo was on again.

The Chinese ambassador later said at a China-Sri Lanka business meeting in Colombo that incidents such as the suspension of the Port City project should not happen again. Projects must be implemented on the legal contracts entered into. Island editorial said that Yahapalana administration is likely to experience some more turns of the Chinese screw in time to come.

China   also made it clear that Yahapalana cannot insult China. The Chinese ambassador called a media conference at the embassy on 1.Nov 2016 to complain that the Minister of Finance, Ravi Karunanayake was asking for more loans after publicly criticizing Chinese funding as ‘expensive’.  He said that China gave loans at    2% interest while Europe gave interest at      5.8%. Chinese diplomats never speak out of turn and   when they say something it is what the Chinese government wants them to say. Therefore    observers wondered whether China sees a regime change ahead.

The National University Teachers Association (NUTA) of Sri Lanka congratulated the ambassador for saying all this. They said that the rapid economic development of Sri Lanka after the war was due to China’s help.   China and Pakistan had consistently stood up for Sri Lanka in UN forums, while USA, UK, India and most   European countries advocated a separate state and   supported the anti- Sri Lanka diaspora at international forums.

China considers Sri Lanka strategically important and is prepared to work with the present Sri Lanka government. Chinese Foreign Minister Wang Li visited Sri Lanka in July 2016.  Yu Zhengsheng, chairman of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), visited in April 2017.  His tour also included Pakistan.  The President of China would visit Sri Lanka later in 2017.   A branch of China Development Bank will open in Colombo and the yuan will have the same status as US dollar.

In 2016, Sri Lanka entered into a MoU with the Government of China over an agreement on comprehensive implementation of investment, economic and technological cooperation”. This would be followed by an MOU with the National Development and Reform Commission (NDRC) of China, which exercises broad administrative and planning control over the Chinese economy.

New agreements were signed in April 2016. These agreements are not known to the public, but ‘all Chinese funded projects are back on track’. There was a separate agreement for the Port City. Ceylon Chamber of Commerce and the Beijing Chamber of international Commerce signed an MOU to work together to promote trade and commerce between the two countries. University of Ruhuna  has signed   two agreements with ‘Chinese Academy of Sciences’ for a joint masters degree programme in sciences  and a China-Sri Lanka joint research progamme (2016) China has donated Rs 2 million to the National Library of Sri Lanka  for digitisation.

China is to finance a total of 28 projects amounting to USD 7.6 billion in Sri Lanka. The projects are spread among power, energy, roads, transport, telecommunication, airport and aviation, port, irrigation and water. They include Moragahakanda project, Puttalam coal power, and greater Kurunegala water supply project.  An Aircraft overhaul wing was set up at Katunayake. Chinese specialists will run the project until SLAF acquire capability to operate the facility on its own. China is funding a 9 story outpatient department (OPD) wing for the National Hospital, Colombo.  The bottom line is that Sri Lanka cannot do without Chinese investments,’ said G.L .Pieris.

Several multimillion dollar development projects in Polonnaruwa district are to be given on a single bid to China without tender procedure. The projects include railway extension from Kurunegala to Habarana, Maduru oya right bank development project, road network extensions and the supply of drinking water. China Harbor Engineering Company will conduct a feasibility study of towns east of Polonnaruwa for the water supply project.  China State Construction Engineering Corporation will do a feasibility study on rail track and railway stations from Maho to Batticaloa and Gal Oya to Trincomalee. Both free of charge.  (continued)