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Growing Chinese Influence in the Indian Ocean - Colombo Port City & the Geo-Strategic Shifts in the Indian Ocean: IOSS

Analysis by Indian Ocean Strategic Studies INC (IOSS)

It is significant to note that Ranil Wickremasinghe and Maithripala Sirisena have also been on board with this Chinese project”
— Indian Ocean Strategic Study Centre (IOSSI)
NEW YORK, UNITED STATES OF AMERICA, June 8, 2021 / -- After Hambhantota Port, Sri Lanka has another geo-strategic predicament to offer for other countries in the Indian Ocean in the form of Colombo Port City project. The adoption of this controversial legislation known as “Colombo Port City Economic Commission Bill,” by the Sri Lankan Parliament with a majority of 149 legislators in the 225 members House voting in its favour on 20 th May 2021 has sent shock waves to India and the world at large.

Colombo Port City (CPC) is a special financial zone under construction next to Colombo, mostly on a land of 2 square kilometers, reclaimed from the sea. This project consists of five million square metres or 269 hectares (including 116 hectares under exclusive control of China). This project is estimated to cost
US $15 billion and likely to be completed by 2041. This is the largest private sector development project in Sri Lanka’s history and for that matter by foreign company.

The process of land reclamation first started in 2014 and completed in 2019. This land was officially declared as part of Sri Lanka in December 2019. It is significant to note that Ranil Wickremasinghe and Maithripala Sirisena have also been on board with this Chinese project confirming that there is something more to geo-strategic developments in the Indian Ocean region with firm Chinese anchoring in Sri Lanka.

The Colombo Port City Economic Commission has powers that would defy any sovereign authority such as taxes, customs, betting and gambling levies, employee terminations, entertainment taxes, foreign exchange, and casino business. The Colombo Port City Economic Commission Bill notes that a seven
member commission would be appointed to administer the Colombo Port City, which would control everything from taxation to approving new projects and investments.

The President of Sri Lanka who has the power to appoint these seven members including foreigners to the Board. Colombo Port City will have its own economic, commercial, and criminal laws. Colombo Port City will remain outside the control of Colombo Municipal Authority with no accountability to the people and the parliament of Sri Lanka. In brief, Colombo Port City will function outside the purview of Colombo Municipal laws and even the national laws of Sri Lanka.

Colombo City Project is likely to be part of the China’s “Belt and Road Initiative” – a vast infrastructure related to Maritime Silk Route connecting China with Middle East, Europe, and Africa. Colombo Port City is a project with clear Chinese characteristics and expected to serve as part of Xi Jinping’s Belt and
Road Initiative and China is likely to handle this project as an overseas province for all practical purposes.

Hambhantota is located close to the world’s busiest east-west shipping route. Given Sri Lanka’s existing debt concerns over US# 18 trillion, a foremost question in our mind is whether Sri Lanka can repay the loan towards the Colombo Port City project or will it also go the Hambhantota way?

Hambhantota and Colombo Port City are key projects, in Chinese view, integral to developing high quality collaboration in jointly building the Belt and Road and in the process strengthen its maritime strategy. It is critical for China to access and cultivate secure sea routes in the Indian Ocean.

We should also keep in mind of the “Malacca Dilemma” and the Chinese search for alternatives. China is the world’s largest oil importer – buying 542 million tons of crude oil in 2020. China has increasingly been emphasizing on managing the seas and oceans and protecting maritime rights and interests in the recent period. Security analysts believe that Colombo Port City and Hambhantota constitute, in the long run, as part of the Chinese counter response to Indo-Pacific Security framework consisting of U.S, India, Japan and Australia.

About Indian Ocean Strategic Study Centre (IOSS):

Indian Ocean Strategic Study INC (IOSS) is an international think tank based in New York, USA. IOSS is an academic, research and intellectual forum for dialogue among the State, civil society, and non-State actors, on vital socio-political, economic, geo-strategic issues and developments in the Indian
Ocean Region (IOR). IOSSI aims to build data base and join debate with the academic, strategic, and policy makers in South Asia, Indian Ocean, and Think Tanks around the world.

Attached, please find Colombo Port City – Video Analysis by Indian Ocean Strategic Studies INC (IOSS)

This video provides an analysis of the Colombo Port City project and its financial, economic, geo- strategic and military implications in the Indian Ocean Region (IOR). This video also presents insights into the growing Chinese involvement in Sri Lanka and the impending geo-strategic shifts in the Indian
Ocean. This video explores the strategic gains for China as well as the setbacks for India, Japan, the United States, and other Western powers in the Indian Ocean with potential implications to the working of QUAD and the Indo-Pacific Strategy. This video also highlights the deep crisis within the Sri Lanka
politically such as ethnocentrism and authoritarianism against the reality of growing Chinese presence and engagements within Sri Lanka.

Indian Ocean Strategic Studies INC
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Colombo Port City – Video Analysis by Indian Ocean Strategic Studies INC (IOSSI)