KAMALIKA PIERIS

This is the final essay in this series. It describes   recent developments relating to Yahapalana and China.  Pathfinder Foundation set up a China-Sri Lanka Cooperation Studies Centre’ CSLCSC in October 2015. This Centre is the only Sri Lankan institution which exclusively focuses on the China-Sri Lanka relationship. The CSLCSC has a counterpart centre located at the Shanghai Institutes of International Relations in China.

China sent Dr. Zhao Yin from the South West University of Political Science and Law to function as Associate Director of CSLCSC. Dr. Ying will provide valuable insight into the Chinese perspective for the activities of the Studies Centre, said China. Pathfinder Foundation, China notes,   had a unique arrangement, it housed two centers focusing on furthering relations with China and India under one roof. A similar arrangement was being worked out with India.

The China-Sri Lanka Cooperation Studies Centre of the Pathfinder Foundation signed a MOU in 2017 with China Center for Contemporary World Studies (CCCWS). Xu Yongquan, Deputy Director General Director, China–Sri Lanka Cooperation Studies Centre signed on behalf of CCCWS.  The CCCWS was affiliated to the Chinese Communist Party and engaged in research in international issues, study on political parties, political systems in foreign countries, China’s foreign strategies, socialist theories, trends in social and political thoughts and comparative study of development models.

CCCWS has established a global network of academic exchanges and cooperation with foreign research institutes in the USA, UK, Germany, Russia, Japan, Poland, Romania, Hungary, Bulgaria, DPRK, Brazil, India, South Africa, and Israel. Sri Lanka became the latest country to be to be added to their extensive network of cooperation.

Pathfinder Foundation has established formal and working relationships with a vast network of think-tanks and educational institutions, internationally.  For China, this includes, Chinese People’s Association of Peace and Disarmament (CPAPD), Boao Forum (BF), Shanghai Institutes for International Studies (SIIS), China Institutes of Contemporary International Relations (CICIR), China Center for Contemporary World Studies, Research Institute for Indian Ocean Economies of the Yunan University of Finance and Economics (RIIO), Faculty of Social Development and Western China Development Studies of Sichuan University, South West University of Political Science and Law (SWUPSL) and  China Academy of West Region Development of Zhejiang University (CAWD) .

Admiral Jayanath Colombage, of Pathfinder Foundation visits Sichuan University, one of the largest and oldest universities in China, regularly to conduct lectures. Pathfinder   has scholars visiting from institutions such as Tsinghua University. Pathfinder Foundation initiated a visit by Renmin University academics in 2018 and conducted a Roundtable conference on Greening Belt and Road Initiative, jointly with the University of Peradeniya. This event was attended by Sri Lanka’s prominent experts on the subject.

Guo Yezhou, Vice Minister (international Department) of the Communist Party of China visited Pathfinder Foundation in August 2018 when he came to Sri Lanka on an official visit. Guo Yezhou, said he undertook the visit to Sri Lanka for the purpose of improving relations with the leading political parties in the country and he was happy to visit the Pathfinder Foundation, which is doing much to promote relations with China. China would continue to work with Pathfinder Foundation. This would help both countries.  The Centre for Law of the Sea of Pathfinder Foundation   was focusing on important issues. Guo Yezhou said he would look for a suitable Chinese partner for this Law Centre.

While Yahapalana tilts madly towards USA, analysts continue to examine China-Sri Lanka relations. China and Russia have been our friend in Security Council. China has never made unbecoming requests of Sri Lanka, said Gamini Gunawardane.

Amal Jayawardene speaking at BCIS seminar   on ‘Contemporary China Sri Lanka relations, the current trends. ‘May 2017   made many useful observations.  I am listing some of them  in capsule form:

• The relationship between Sri Lanka and China is a unique one; it is friendship and cooperator of 2 countries of unequal size and power.
• We have had long standing diplomatic, cultural economic and technical relations with China. Diplomatic relations with China started in 1956.  Chou en Lai was the first head of a communist country to visit. Chou en Lai had special regard for small countries.
• The rubber rice pact was a landmark event. In1967 Sri Lanka had wanted to join ASEAN, but ASEAN objected to the pact with China. Dudley Senanayake, then Prime Minister, decided to renew the pact and forget ASEAN.
• When Sri Lanka nationalized oil, World Bank and USA cut off aid, China stepped in.
• In 1964 China waived all interest on its
• China also helped Sri Lanka to start a shipping service. It gave interest free loan to buy two ships.
• China supported Sri Lanka at UN and HRC. Only China condemned India for its 1987 violation of air space,
• Sri Lanka supported “One china policy”. Sri Lanka had no diplomatic relations with Taiwan.  China appreciated this.

Chinese overseas investment has come in for much comment. Palitha Kohona observed that the Chinese government believes that low-key communication and mutually beneficial dialogue, carried out on an equal footing is more efficient than the US approach of distributing money and exerting pressure. Sri Lanka’s traditional donors such as the EU, USA, and Canada have been replaced by countries in the East,  because, inter alia,  they conduct themselves differently from Western countries. According to Kohona, “Asians don’t go around teaching each other how to behave. There are ways we deal with each other, perhaps a quiet chat, but not wagging the finger.” His words clearly manifest one of the main reasons why not only Sri Lanka, but many other countries in the developing world prefer China as a development partner, said Thilini Kahandawaarachchi .

Li Jiming, Director General of the Foreign Affairs Office of the Yunnan Provincial Government of China said at the first China-South Asia Cooperation Forum held in Yunnan, China, that there is no reason for Sri Lankans to fear their country falling into a debt trap because of the Chinese loans. South Asian countries including Sri Lanka are concerned about this. Chinese loans can be characterized into two types; government to government (G2G) loans and business loans. G2G loans are provided at a very low interest, so it can hardly put any pressure on the national economy.”And business loans are given at a relatively higher interest rate.  all loans undergo a thorough feasibility study and all the parties have agreed upon the repayment framework.

While most developing countries are struggling with their debts to international lenders, China has suggested conversion of debt to equity in many of the projects that were launched with Chinese assistance, said Minister Dr. Sarath Amunugama while addressing an Economic Forum on the “Belt and Road Initiative” held in Chengdu, China in September 2018.  “China  has been prompt and highly professional in the selection of projects and disbursements of funds, found to be lengthy and time consuming in other multi-lateral and bi-lateral relationships.

Thilini Kahandawaarachchi    has commented extensively on China aid to Sri Lanka. Sri Lanka has enjoyed strong bilateral ties with China for decades she observed. According to the Heritage Foundation’s China Global Investment Tracker, from 2005 to 2014 China spent US$870.4 billion in worldwide investments and contracts, of which US$8.9 billion was invested in Sri Lanka. In contrast, the west only      contributed US$596 million to Sri Lanka.

China has been the largest donor since 2009. China gave US$1.2 billion worth of assistance in the form of grants, loans, and credit. The Asian Development Bank invested only US$423 million and the World Bank US$241 million. China is the biggest source of Foreign Direct Investment (FDI) pumping in more than US$400 million in 2014.   China provided Sri Lanka US$5 billion in aid over the last decade.  China  fulfilled 65% of its total pledged assistance to Sri Lanka.

China is not only a key investor and donor, but also a significant trading partner. It surpassed the United States as Sri Lanka’s second-largest trading partner behind India in 2013. In the same year, Sri Lanka’s bilateral trade with China exceeded US$3 billion Chinese investments, grants, and trade are all intricately interlinked.  These aid packages, trade relations, and investments indicate China’s increasing involvement in Sri Lanka and its lasting footprint in the region.

During the nine-year tenure of President Rajapaksa, Sri Lanka moved away from its traditional funding partners such as the ADB, IMF, the World Bank and western countries, and inched closer to China. Former President Mahinda Rajapaksa said, he had offered Hambantota port first to India. Ultimately the Chinese agreed to build it.” China with its multi-million-dollar investments to put in place much-needed infrastructure became a dependable friend.

During the last decade, China has  emerged as an expert in construction and engineering which has influenced many countries to choose China, particularly for port projects. All these aspects have played a role in Sri Lanka choosing China’s involvement in building port infrastructure, continued Kahandawaarachchi.

China has been involved in a variety of projects such as the Norochcholai Coal Power Plant, Mattala International Airport, Katunayake Airport Expressway, Moragahakanda Irrigation Development Project, and the Southern Expressway, which is also the country’s first highway. Some of China’s lavish gifts to Sri Lanka include prominent landmarks such as the BMICH, the Superior Law Courts complex, and the Nelum Pokuna Performing Arts Theatre.

It is important to examine why we sought Chinese investments in the first place. China has been a forthcoming and non-interfering alternative to funding from international financial institutions and Western donors. China had the excess capital and the capacity to take high risks, and they financed the construction of the Hambantota port at a time when no other country or development partner was willing to invest in it, said Kahandawaarachchi/

There are other reasons for Sri Lanka to prefer China to Western countries and multilateral organizations such as the International Monetary Fund (IMF), the International Development Agency (IDA), the World Bank, and the Asian Development Bank (ADB) when it comes to obtaining funds. Multilateral institutions impose numerous conditions, including human rights, democracy, and good governance, when extending development loans. China does not interfere in the internal workings of the recipient country.

Further, unlike Western donors who have been reluctant to invest in these high-risk, large-scale infrastructure projects, China is ‘forthcoming’ with their development support and investments. They are willing and able to take long term risks and invest in countries with higher political risk. Several large China-funded infrastructure projects in South Asia are high-risk ventures in which no other multilateral organization or Western donor country wants to be involved in.

Therefore, rather than solely blaming China for their opportunistic investments, it is important to recognize that it is our governments that have voluntarily and actively sought these investments and exercised their will when they reached out to China to fund a massive port project among other infrastructure projects, said Kahandawaarachchi.

Though the present government initially seemed to distance itself from China in 2015, soon it realized that the West does not have the kind of resources that China has to support Sri Lanka, and that China’s links in Sri Lanka are too deep.  Besides, in the new world order, China is too big a player to  ignore.

Lastly, China also serves as a counter balance against the regional hegemony of India and other influences on Sri Lanka. When countries in South Asia reach out to China to fund their infrastructure projects, they are also driven by the fact that closer ties with China will be a way to balance power with India. Though not openly admitted, Sri Lanka’s closer ties with China is also a balancing act to prevent the influence or interference from India, USA and other global players.

China has been a formidable friend. It has supported Sri Lanka in diverse international fora. For example, in 2012, China was strongly against the United States backed UN Human Rights Council Resolution against Sri Lanka. Supporting Sri Lanka against the UNHRC resolution, the former Chinese Foreign Ministry spokesperson Hong Lei stated that China opposes “using a country-specific human rights resolution to impose pressure” and China believes that the Sri Lankan government and people are capable of handling their own affairs.

China’s investments also boost China’s soft power strategies by creating a presence and by being a catalyst for development. The growing economy of Sri Lanka provides a market, albeit small, for China’s manufactured goods. China is also strategically gathering supporters with these intricately linked economic, trade, and cultural relations. The mega port city project commenced in September of 2014 with the participation of Chinese president Xi Jinping on the invitation of the then President Mahinda Rajapaksa.  The Chinese leader’s presence underscored just how important the project is to China.

China is making large-scale investments in maritime infrastructure in Sri Lanka and other South Asian states, and China insists that their investments are only pacific and based on goodwill between long standing friends such as Sri Lanka., infrastructure developments are long-term projects that often take decades to actually reap their intended benefits. They often require further investment to develop facilities to make these projects profitable. Hambantota port was built as a transshipment and bunkering facility to refuel and provide supplies to the large number of ships that ply the main east-west shipping route. It still requires considerable investments to improve its services and facilities to make it a fully functional port, concluded Kahandawaarachchi  .

Colombage noted that the Chinese involvement in Sri Lanka during the long drawn out  Eelam conflict is noteworthy. Although India, Pakistan, USA, Israel, Russia, and Ukraine supported the government of Sri Lanka, the major contribution came from China. China provided weapons when many other nations shied away citing human right considerations. China even established a bonded warehouse for arms and ammunition that was required to fight the war in Sri Lanka. The post conflict period also witnessed the west and other powers staying away from Sri Lanka’s development programs. China became the number one development partner and biggest Foreign Direct Investor in Sri Lanka, mainly focusing on much needed infrastructure projects such as highways, ports, airports and power generation sectors.

A 20-strong Chinese business delegation led by Wang Yanguo, President and Secretary General of China International Chamber of Commerce for the Private Sector (CICCPS),  was in Sri Lanka recently to explore investment opportunities in the island. CICCPS is a comprehensive chamber of commerce specialized in facilitating overseas investment of Chinese private enterprises and approved by the State Council and Ministry of Civil Affairs of China.

The CICCPS delegation has expressed  interest in setting up a massive Moringa  (‘Murunga’) leaf processing factory in Hambantota. The factory would produce nutritional food supplements and oils making use of Moringa  leaves, bark, flowers, fruit, seeds, and roots, With its countless applications from leaf powder to pod-pressed edible oil, the Moringa  plant is valued by health authorities worldwide having discovered its nutrition and health benefits, the investors plan to introduce a number of Moringa food products to the international market. They said they will manufacture Moringa sauce, drinks, and seed oil at the factory.

People in Hambantota will earn a good income by growing Moringa with the venture. Morenga grows in Hambantota, Moneragala and Jaffna. The plant yields throughout the year and contains many nutrients. Every part of the tree, roots, trunk, seeds, flowers, and pods, can be used as food or medicine. Its leaves are the most nutritious. They contain B and C vitamins, Pro vitamins such as beta-carotene, K vitamin, manganese, and protein among others. Moringa is rich in antioxidants and it reduces blood sugar and cholesterol and inflammation.

Moringa is known to have two times the protein of plain yogurt, four times that of calcium of milk, 25 times the iron of spinach, four times the vitamin A of carrots and seven times the vitamin C of oranges, a Chinese expert explained at the meeting. Moringa  is very popular in the European market for food supplements, a member of the Chinese delegation said adding that the plant’s dried leaves are marketed for a wide range of health benefits based on their high level of antioxidant activity and chemical composition. This plant is being popularized as a miracle tree with the leaves and pods branded as ‘super-food’ globally,

Sri Lanka and China will jointly conduct the first “Chinese Enterprise Job Fair” in Sri Lanka, organized by the Chinese Chamber of Commerce in Sri Lanka and Sri Lankan Ministry of Skills Development and Vocational Training, 15 Chinese companies, who had opened branches in Sri Lanka would provide job opportunities to over 400 Sri Lankans in an aim to strengthen the country’s employment sector. The companies were in search of both skilled and unskilled workers and there were many job categories available.

There is animosity towards the Chinese working here. Police are not doing enough to protect the black tortoise (gal ibba) and the flapshell tortoise (kiri ibba) being slaughtered for the consumption of Chinese construction workers and tourists, said Movement for Land and Agricultural Reform (MONLAR). “Organized groups are collecting these two protected species as there is a high demand for them from Chinese construction workers and tourists. According to the Fauna and Flora Protection Ordinance (FFPO) anyone who harms these animals can be fined and jailed. Moreover the Police don’t need a warrant to arrest such a person.”

Financial Crime Investigation Division (FCID) was conducting investigations against three Chinese over their suspicious financial transactions in Sri Lanka, informed court that the Chinese nationals have deposited Rs. 950 million at a private bank in Sri Lakethe suspects were arrested under the provisions of the Prevention of Money Laundering Act. The FCID commenced investigations following a complaint made by a director of the Central Bank’s Intelligence unit under the Prevention of Money Laundering Act No. 5 of 2006.

But China is not upset. The China Henan Shaolin Kung Fu Show toured Sri Lanka In 2017 . The visit was organized by the Association for Sri Lanka –China Social and Cultural Cooperation, Sri Lanka – China Friendship Association, Sri Lanka – China Society and Chinese Embassy. They performed   in Kandy, Polonnaruwa, Hambantota and Colombo.  This gave Sri Lanka opportunity to experience Shaolin Kung Fu (martial art) and central China culture. The performances coincided with 60 years of China – Sri Lanka diplomatic relations and 65th Anniversary of the signing of Rice and Rubber Pact. ( to be continued)