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Sri Lanka allows China to invest in controversial southern port – China’s latest business and technology news

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summary of the top news in Chinese business and technology for July 25, 2017. Part of the daily SupChina newsletter, a convenient package of China’s business, political, and cultural news delivered to your inbox for free. Subscribe here.
4 weeks ago
Lucas Niewenhuis

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.

By Lucas Niewenhuis
Lucas Niewenhuis is an associate editor at SupChina who helps curate daily news and produce the company's newsletter, app, and website content. Previously, Lucas researched China-Africa relations at the Social Science Research Council and interned at the Council on Foreign Relations in New York. He has studied Chinese language and culture in Shanghai and Beijing, and is a graduate of the University of Michigan.
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