Chinese Foreign Minister Wang Yi visits Sri Lanka

Chinese foreign minister Wang Yi will meet with Sri Lankan officials in Colombo today.

Today’s meeting has opportune timing for Chinese-Sri Lankan bilateral relations as Sri Lanka undergoes a severe economic crisis. Infrastructure investment, particularly the $1.4 billion Chinese-funded Colombo Port City (CPC) project, will feature prominently.

However, Sri Lanka is also enhancing its cooperation with India. Along with developing an Indian economic aid package for Sri Lanka, both countries agreed this week to modernize an oil terminal on the country’s eastern coast. These developments signal a desire by some Sri Lankan authorities to pivot away from overreliance on China due to so-called “debt trap” diplomacy. Sri Lankans’ sovereignty has remained a top concern ever since Beijing obtained a 70% stake in the Chinese-funded Hambantota Port project for 99 years.

In today’s meeting, expect Sri Lankan officials to request additional financial assistance from China. Short-term, the likelihood of new financial investments in the CPC project is high, as recent visits to the port by Sri Lankan officials demonstrate an interest in accelerating its development. Medium-term, expect India to increase its economic and financial ties with Sri Lanka through additional natural resource investments.