Recently, after presenting the budget, President Ranil met the media heads. In that meeting, Ranil said that USA’s investment through the International Development Finance Corporation (DFC) in Adani Ports-led container terminal project, it has shown that the Biden government has faith in his government. The DFC investment in Sri Lanka is news that has been discussed in the world’s media. India demanded the eastern terminal of the port during President Gotabaya’s period. Japan was also a partner for that.
Gotabaya’s government refused to give the eastern terminal to India’s Adani Group and agreed to give the western terminal. With the decision of Gotabaya’s government, Japan withdrew from the Adani port project. Adani and John Keels Company took over the Western Terminal project. America decided to invest in this project only after Japan’s withdrawal. The international media had reported that the American investment was a challenge to Chinese supremacy in Sri Lanka. But Ranil shows it as a sign that America has faith in his government.
It seems that China is nervous about this American investment in the port project. An article published by the South China Morning Post makes it clear. Below is an excerpt from that article.
“India and the United States – alongside Australia and Japan – form the Quad diplomatic network, whose leaders have said they are focused on providing an alternative to Chinese infrastructure projects for developing nations. The new Sri Lankan port terminal, resembling a public-private partnership, would appear to be their first such endeavour.
Analysts say the move signals a new determination on the Quad’s part to guard against smaller nations leaning too heavily on China and its arterial trade and military routes. Another terminal at the port is run by China Merchants Port Holdings Co Ltd.
Cedomir Nestrovic, a professor of geopolitics at the ESSEC Business School Asia-Pacific in Singapore, said it would be too simplistic to characterise the US-funded project as just another business deal.
He said geopolitical interests could be seen in the fact that the US$553 million in financing from the US International Development Finance Corporation, a federal government agency, represents nearly four-fifths of the US$700 million required to build the terminal.
There are not many other cases “where America has invested institutionally in this way, with this amount of money,” Nestrovic said. “The political motivation is part of the larger rivalry that exists between the United States and China.”
Not business as usual?
US efforts to contain China militarily through the presence of American troops in South Korea and Japan have been expanded into the economic sphere via the larger Quad grouping and the push “to ‘cut the grass’ of Chinese investments”, Nestrovic said.
After China was concerned about the US investment China’s BYD company signed a joint venture agreement with John Keel’s Group. Before this joint venture agreement, in an article they published in China Morning Post, it was stated that China should look for other strategies regarding projects in Sri Lanka.
South China Post also said ‘The focus should be on getting equity flows. If loans are needed, it should be loans given directly to the private sector in a public-private partnership,”.
This shows that China is also following India and America also looking for new strategies regarding projects in Sri Lanka, which also reflects how tired China is of the Western media campaign about the Chinese debt trap.
