Sri Lanka has leased its strategic port of Hambantota to China for 99 years as a way to pay back some of the $8 billion it owes Chinese state-owned firms.
Critics of the deal say Chinese control of the port could hurt India and Pakistan if current good relations between them ever sour, but Sri Lankan officials said the deal, valued at $1.1 billion, was necessary to ease its crushing debt load and get back on track with repayment.
“With this agreement, we have started to pay back the loans,” Prime Minister Ranil Wickremesinghe said when he addressed Parliament over the weekend, The New York Times reported. “There will be an economic zone and industrialization in the area which will lead to economic development and promote tourism.”
Those opposed to the Hambantota deal said it could lead other nations that owe China money to make their own deals giving away territory to the massive nation.
Parliament member Namal Rajapaska, who is the son of the former Sri Lankan president, commented on Twitter in July about a deal at that time to hand over 70 percent control in the port, asking if it represented “playing geopolitics with national assets,” the Times reported.
According to Forbes, the move may be an attempt by China to continue to surround and pacify India, which it had begun to do by making partnerships with Pakistan to build a China-Pakistan Economic Corridor connecting China to the Arabian Sea at Pakistan’s Gwadar Port.
Some think China will eventually own the CPEC because it rests upon loans to Pakistan that the nation may not be able to repay — similar to Sri Lanka’s situation, Forbes noted.
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