Sri Lanka allows China to invest in controversial southern port – China’s latest business and technology news
The Sri Lankan government has approved a new $1.5 billion deal for commercial operations at a Chinese-built shipping port in the southern city of Hambantota, Reuters reports. China Merchants Port Holding Co. will invest $1.12 billion toward the project — slightly less than the controversial original proposal many months ago, where the Chinese side would have had an 80 percent stake — while the Sri Lanka Ports Authority will cover the rest.
What changed in the last few months?
- Sri Lanka and China have reportedly agreed to keep the port free from military operations.
- Another issue is China’s investment in an industrial zone also in Hambantota, but this was set aside by Sri Lankan officials to be dealt with a later time.
- According to a document seen by Reuters, “A second firm, Hambantota International Port Group Services Co, with capital of $606 million, will be set up to oversee security operations, with the Sri Lankans holding a 50.7 percent stake and the Chinese 49.3 percent.”
- But the port will remain controversial, and — like Bhutan — Sri Lanka will continue to play a role as a proxy in the contest for Asian influence between China and India.
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