China wants Sri Lanka to ensure level playing field

Sand being dredged from the sea and sprayed duringreclamation at the Chinese investment‘Colombo Port City’ in February.

China has sounded Sri Lanka that it should ensure that there is no discrimination against Chinese enterprises in the island nation, following >Colombo’s decision to freeze a Beijing-funded port project in Colombo. China’s Foreign Ministry spokesperson Hua Chunying said regarding the suspension of the port project that Sri Lanka should “properly resolve the issue in a way that helps Sri Lanka's development and maintains the confidence of Chinese firms investing in Sri Lanka."

On Thursday, the Sri Lankan government had announced that it was “temporarily and immediately” suspending for two weeks, the $1.34-billion project funded by a Chinese firm, pending approvals and environmental clearances. "We have been informed by the Sri Lankan government of the decision, which stressed the project was 'suspended', not 'cancelled'," Ms. Hua observed.

“The Sri Lankan side promised to keep in contact and consultation with China regarding following arrangements," the spokesperson said. She added that Sri Lanka is holding investigations into its cooperative projects with other countries as well. The China Communications Construction Company had started the port project during former President Mahinda Rajapaksa's tenure. China’s state media is reporting that the project was scheduled to generate 83,000 Sri Lankan jobs.

Sri Lanka’s decision coincides with Prime Minister Narendra Modi’s upcoming visit to Colombo. But following Mr. Modi’s departure, Sri Lanka’s President Maithripala Sirisena will pay a month-end visit to China — a decision, which analysts says mirrors Colombo’s dilemma of balancing its ties with New Delhi and Beijing. Last month, visiting Sri Lankan foreign minister, Mangala Samaraweera, had stated in Beijing that Sri Lanka’s review of certain projects should be welcomed by foreign, including Chinese, investors as this signaled the emergence of a “rule-based investor climate” premised on merit alone. He had added that following Mr. Sirisena’s visit, a Sri Lankan finance ministry delegation would visit Beijing to take a take a fresh look at the $5-billion loans that have been raised from China.

The dissonance in the Sri Lanka-India ties had amplified during the November visit to Colombo of a Chinese submarine. But in an about turn, Mr. Sirisena’s government has now decided to bar docking of all foreign submarines in Sri Lanka.