COLOMBO: China has expressed an interest in setting up industrial or economic zones in the northern and southern coasts of Sri Lanka and has asked the Lankan Government to seek Chinese loans for these.
This suggestion was made by the Chinese Ambassador, Yi Xiangliang, at a meeting with Lanka’s Export Development Board (EDB) here recently.
By seeking to build coastal industrial zones in the Tamil-majority Northern Province, China may be stepping on India’s toes. India considers the Northern Province to be within its legitimate sphere of influence. It has already told Lanka that it has a strategic interest in the Kankesanthurai harbor and the Palaly airport there and is involved in their development. India has already established an industrial zone at Achchuveli in Jaffna, and has built an extensive railway network in the province.
But China’s involvement in the North is still marginal. It is building some roads, but the ambitious Northern Highway project has been temporarily suspended by the Sirisena government pending an inquiry into costing.
The Chinese envoy held out the Shenzhen Economic Zone in China as the developmental model for Lanka. The Shenzhen economic zone is on the coast and is highly developed. A mere village thirty years ago, it now has a GDP of US$ 260 billion.
The proposed Chinese economic/industrial zones in Lanka will not only attract Chinese and international investment but will also help Lanka increase its industrial production and widen its range of exports. Right now Lanka exports to China only apparel and agro-products, Yi pointed out.
Despite the fact that the China-funded and executed Colombo Port City project has been suspended temporarily to check on some alleged irregularities, China is keen on continuing the project with necessary modifications. It has been unilaterally saying that the project is on.
This is because it is part of China’s global 21 st.Century Maritime Silk Route (MSR) project. The MSR envisages construction of ports with an economic hinterland in a number of countries on China’s international sea trade route. When Chinese President Xi Jinping visits Pakistan on April 10, he will discuss the Gawadar port project, which is also part of the MSR.