The international ports were scrambled by 20 countries, the United States was rejected for hundreds of billions of dollars, and investors only looked at China

introduction

In September 2013, China put forward the great strategic concept of the "21st Century Maritime Silk Road", based on this strategic concept, China will build an economic and destiny community that includes countries in Eurasia.

Because of its geographical location, Sri Lanka has been known as the "Crossroads of the East" since ancient times, and is an important sea traffic artery. After China's implementation of the Belt and Road Initiative, Sri Lanka's importance became even more apparent.

Then the port of Hambantota, located in the southern province of Sri Lanka, is particularly eye-catching under the strategic background of the "Maritime Silk Road". So why did Sri Lanka finally choose China in the face of the eyes of all countries?

Internal and external troubles, debts are high

With the development of the modern economy, tourism continues to rise, and many foreign country names appear in the minds of the Chinese people. Sri Lanka is mostly considered to be a beautiful and rich maritime country.

Historically, Sri Lanka was the main route of communication on the Maritime Silk Road and became a transit point for chinese and Arab merchants to trade. Today, oil from the Middle East is shipped to Asia via the Indian Ocean, through Sri Lanka, an important maritime stronghold.

Unbeknownst to them, however, Sri Lanka has been worried about internal and external troubles in the past to make a living by borrowing money.

Why did Sri Lanka end up in a miserable state of limbo? This matter must be briefly discussed from the history of this country.

Sri Lanka was colonized in the 16th century, and long-term colonial policies limited Sri Lanka's economic development.

Although Sri Lanka declared its independence in 1948, the newly independent Sri Lanka still faces many problems, with constant internal and external troubles and difficulties in economic development.

After independence, Sri Lanka had ethnic contradictions among sinhalese and Tamils, who fought over who would be in power after independence.

There is an arrogant Indian state on the outside, India has always regarded Sri Lanka as its "bag", in order to disturb the national security of Sri Lanka, India has been stirring up dissension. In 1983, the Sri Lankan civil war broke out, and India wanted to take this opportunity to support the reactionary LTTE.

Fortunately, at the beginning of the 21st century, Sri Lanka ended its civil war, and Sri Lanka was in ruins. The long-standing civil war not only hindered the normal development of the domestic economy, but also purchased a large number of military weapons in the civil war, which undoubtedly aggravated Sri Lanka's international debt.

Sri Lanka had to borrow and finance for the sake of rapid economic recovery and development, and over time Sri Lanka's debt grew in size. In 2009, Sri Lanka's external debt reached $20.9 billion, accounting for more than 80 percent of gdp at the time. China is also a debtor country to Sri Lanka.

After the end of the 26-year-long civil war, the Sri Lankan government put forward the "Mahinda Vision" and the "Two Wings and One Belt" national development strategy in response to its national conditions.

In order to get rid of the country's poverty and weakness, Sri Lanka will become the maritime, aviation and even commercial center of the East and the West.

In order to achieve its goals, Sri Lanka first intends to build hambantota into a world-class port. However, to build such a large project, it is not only necessary to use technology, but also a lot of money.

Build ports and stimulate the economy

In 2007, the Hambantota region was still a desolate small fishing village, and the main cash crops in the area were mainly sea salt and fish, and the economic life was backward.

But under the government planning of Sri Lanka, the small fishing villages in the Hambantota area will soon be replaced by a new look and gradually modernized.

In order to successfully build Hambantota into an international port, Sri Lanka initially asked for a lot of people. Among them was India, but the Indian side believed that the waters near Hambantota were not deep enough to build a world-class foreign port, so it categorically rejected the Sri Lankan government's debt request.

The Sri Lankan government had to turn to the West, and the Hambantota region was hit by the Indian Ocean tsunami in 2004, causing heavy losses and devastation. Therefore, the Western countries also have the same idea as India, did not agree to Sri Lanka's debt request, and eventually Sri Lanka returned home empty-handed.

But it was at this time that China stepped forward. In October 2007, with Chinese financial and technical support, the construction of hambantota port began.

At that time, China's help in Sri Lanka to build the Hambantota port also caused a lot of controversy in China. Many domestic people believe that before this, China has lent Sri Lanka a lot of money, and now helping Sri Lanka build the hambantota port will certainly be a large expense, and it is very likely to be a loss-making transaction in the end.

But it was under such domestic pressure that China chose to help Sri Lanka build the hambantota port. For no other reason than that China is a peace-loving and ceremonial state, and in the long run, it is advantageous to help build the hambantota port. Even if it loses money in the end, it has established a positive international image for China.

In this way, the Chinese government has been assisting in the construction of the Hambantota Port since October 2007. As mentioned above, the port of Hambantota does not have sufficient water depth to become a natural deep-water harbor.

However, these difficulties were quickly resolved under China's strong infrastructure strength. The method is simple and simple: "if the water depth is not enough, dig deep, and if the port is small, expand the area", as long as China and Sri Lanka work together, these are not things.

In this way, with the help of China, the hambantota port began to be built. Funded by the Export-Import Bank of China, construction began in January 2008 and was not completed until the end of 2015, when the construction of the hambantota port was completed, a total of seven years.

The construction of hambantota port has invested nearly US$1.4 billion, and after the completion of hambantota port, it has 10 berths of 100,000 tons, making it the second largest deep-water port in Sri Lanka.

Hambantota Harbour was built to revitalize Sri Lanka's economy and improve the lives of its inhabitants. However, after hambantota port began operations in 2012, the performance was disappointing. Due to the poor management and operation of the Sri Lankan government, the Hambantota Port showed a loss-making situation. At the end of 2016, the total loss exceeded $300 million.

The unsuccessful operation of the Hambantota Port has further increased sri Lanka's economic burden, let alone the repayment of foreign debt. According to the data, the domestic economic situation in Sri Lanka is not optimistic, and the trade deficit is increasing year by year. In the five years from 2011 to 2015, Sri Lanka's external debt and interest have doubled, while income from exports of goods has not increased in tandem.

The urgent economic situation has forced the Sri Lankan government to carry out reforms and seek new economic development opportunities.

Find a breakthrough and transfer equity

Sri Lanka, in order to better operate the hambantota port, thought of ways to find foreign aid. So he turned his attention to the Chinese government, hoping that the Chinese government could "do good people to the end and send Buddhas to the west."

Of course, the Sri Lankan government did not let the Chinese government help in vain, it let China participate in it through the method of equity transfer. In this way, not only can the hambantota port be better operated, but also an increase in revenue and expand Sri Lanka's foreign exchange reserves, which can be described as a "three birds with one stone" strategy.

However, "the development process of new things is always tortuous". In the process of equity transfer, it is not smooth sailing.

In December 2016, migrant workers in hambantota port went on a passive strike over the issue of equity transfer, even protested, and physical clashes broke out, and the local navy intervened to quell the riot. The reason is simple, these people are worried that the transfer of equity to China will face unemployment.

But the direction in which new things develop is forward and bright. In January 2017, Sri Lankan Prime Minister Wickremesinghe stated in parliament that "no negative force can stop Sri Lanka from developing into a completely new country".

From this point of view, this equity transfer is imperative. Although there are many voices of opposition in China, they have all been quelled in the end, and for the long-term development of the country, these negative forces will be eradicated.

In fact, after Sri Lanka issued the news of the transfer of equity in hambantota port, many countries have thrown olive branches. Many of them are the United States, India and European countries, as many as more than 20 countries. After all, the geographical location of Hambantota Port is too important, and it is not an exaggeration to say that it is a "place where soldiers must fight".

However, Sri Lanka has chosen China as its partner among many countries. The reason is simple, there are the following points:

First, Sri Lanka wants to use equity transfer to stimulate the national economy and realize the national dream. China's "Belt and Road" is a very good "hitchhiking", a strategy that other countries do not have.

Second, China's infrastructure strength and port operation strength are obvious to all, such as China's Shanghai Port ranked among the top three in the world in 2003, and the freight throughput in 2005 ranked first in the world.

Third, China sees Sri Lanka as a trusted partner, having been the only one willing to give generously to the hambantota port. After a long period of time together, the Sri Lankan government knows that China is a friendly country, while countries such as the United States and India are diametrically opposed and cannot cooperate.

Sri Lanka's request was quickly granted by the Chinese government. Seeing this, some readers will think: "Is China so fond of being a good person?" What if China takes over the same loss, after all, no one can guarantee that China can make the Hambantota Port profitable after taking over."

In doing so, the Chinese government actually has long-term thinking:

1. In response to the great strategy of the "21st Century Maritime Silk Road", we will actively establish good relations and cooperate with coastal countries.
2. Solve the "Malacca dilemma", ensure the safety of mainland energy imports, and improve its own energy security factor.

With the rapid development of China's economy, the domestic demand for oil and non-ferrous metals is increasing, and the import volume is also increasing day by day. Most of the oil from the Middle East and Africa, which is shipped to the mainland, passes through the Strait of Malacca. However, according to the established global hegemonic strategy of the United States, the Strait of Malacca is a throat waterway that it must control.

In the view of the United States, the Strait of Malacca is a "maritime lifeline" for China, Japan and other east Asian oil importers, and as long as this lifeline is controlled, it can control the energy supply of countries such as China and Japan. As a result, China's energy security will not be guaranteed.

Based on this status quo, China must also change the situation and find new breakthroughs to ensure the country's energy security. After all, 90% of China's crude oil imports are transported by sea. Once China finds a way to solve the "Malacca" dilemma, the influence of the United States in the region is bound to decline.

Therefore, it was correct to conclude that China had promised Sri Lanka to acquire the right to operate by way of equity transfer. In the long run, it is conducive to national development strategies.

In July 2017, China Merchants Group Corporation and the Sri Lankan government signed an agreement on the equity transfer. Chinese companies will acquire a 70% stake in the Hambantota port as required, while leasing land in and around the port for 99 years. Chinese companies are responsible for the operation and management of the hambantota port, and the security of the port is the responsibility of Sri Lanka's navy.

At the signing ceremony, Mahinda Samara Sinha, minister of the port's transport class, said: "The signing of this cooperation agreement is of historic significance".

China and Sri Lanka work together for mutual benefit and win-win results

When China and Sri Lanka signed the agreement, the news caused an international uproar. In particular, the capitalist countries represented by the United States have clamored that this is China's "debt trap theory" and will make Sri Lanka's debt worse.

However, according to the agreement, the interest rate on loans provided by the Export-Import Bank of China is not high, and the total amount of these installment loans (including interest) is less than 5% of Sri Lanka's total external debt. Therefore, the debt trap of the United States and other countries is self-defeating.

However, the United States did not give up on this, in order to achieve its goal of containing China, directly to Sri Lanka for hundreds of billions of Sri Lankan rupees (Note: in 2017, 1 US dollar = 179.6 Sri Lankan rupees), hoping to replace China and gain control of the hambantota port, but this was rejected by Sri Lanka.

Sri Lanka's neighbor, India, also stepped forward at this time, as India, the world's sixth-largest economy. Seeing China cooperating with other countries in the Indian Ocean, I was quite upset. It is believed that China's move is bound to contain itself, and perhaps it will also build a naval base in the port of Hambantota.

So India immediately stood up against it. Sri Lanka has repeatedly made assurances and promises in order to convince the Indian government that the port of Hambantota is commercial, but India is still not convinced.

In August 2017, sri Lanka eventually leased Marata International Airport to India for a 40-year lease in order to achieve a strategic balance between China and India.

The United States and India have been very vocal about China's acquisition of the right to operate the hambantota port. Although dozens of other countries that want to cooperate with Sri Lanka also have opinions on this, it is mainly economic considerations and wants to "share a piece of the pie". The United States and India want to contain China, so they have been making frequent moves, and even come up with the "pearl chain strategy" to incite the wind.

In the eyes of the United States and India, after China introduces the port of Hambantota, it is bound to weaken its control and influence in the Indian Ocean. India has always seen itself as the hegemon of the Indian Ocean, while the United States has always seen itself as a global hegemon. Therefore, this big and small earth overlord joined forces with other European and American brothers to compete with China for the operation and management rights of the hambantota port.

But I didn't expect Sri Lanka to have such a firm relationship with China. Sri Lanka's President Rajapaksa has also repeatedly stated that "the loan for the Hambantota Port project is a purely commercial loan with absolutely no military use".

In the end, with the efforts of China and Sri Lanka, the two sides overcame all difficulties and began to cooperate further.

According to the data released by Sri Lanka on December 8, 2017, from January to September 2017, foreign investment in Sri Lanka reached US$800 million, an increase of 80% compared with the same period in 2016, an astonishing growth rate. Among them, Chinese investment accounts for about 35%, India 16.4%, Singapore 9.3%.

From this point of view, the economic vitality of Hambantota Port has reappeared, and it has been full of strong vitality, although other countries have not obtained the right to operate Hambantota Port, but they have also participated in the investment of Hambantota Port and made great achievements on the 21st Century Maritime Silk Road.

Since China took over the operation of hambantota port, China has also introduced Shenzhen's "Shekou development model" to the Hambantota area. In short, it is the "Port-Industry-City" model. By building a deep-water port, it undertakes the industrial transfer of the world economy and finally transforms into urbanization.

The port of Hambantota is only more than 10 nautical miles from the main international route in the Indian Ocean, but almost half of the world's freight containers and two-thirds of the oil pipelines are routed here. Therefore, it can be said that the geographical location of Hambantota Port is very superior.

In the first half of 2021, despite the background of the global new crown virus, the freight volume of Hambantota Port continued to increase, with a year-on-year increase of more than 180%. On 14 December 2021, Sri Lankan Prime Minister Mahinda Rajapaksa and a number of government officials visited hambantota port and gave a positive evaluation of the operation of hambantota port and the development of the industrial park.

In 2022, the bulk cargo volume of Hambantota Port has exceeded the million mark, and the results are gratifying. However, it is worth noting that under the impact of the new crown epidemic in 2022, Sri Lanka's economic pillar tourism has been hit hard, leaving Sri Lanka's economy in crisis and financially unable to make ends meet.

In the midst of the difficulties, Sri Lanka turned to its economic partner, China, for help, and China generously offered to help within its capabilities. Afflictions see the truth, that's it!

Instead of helping Sri Lanka, India and the United States, which pride themselves on being good people, continue to spread rumors that Sri Lanka is caught in China's "debt trap." But I don't know that the eyes of the masses are shining brightly, and what China has done for Sri Lanka has been seen and remembered by the local residents.

epilogue

The equity transfer of Hambantota Port is of historic significance to both China and Sri Lanka, and the successful construction of Hambantota Port is also the result of China's "Belt and Road" initiative, reflecting the mutual benefit and win-win situation between the two countries.

We believe that mutual cooperation and mutual benefit and win-win results between China and Slovakia will surely bring a better tomorrow to the two peoples.

bibliography

1. "Sri Lanka Hambantota Port Transfer to Chinese Enterprises Not for Use as a Naval Base", 2017-12-9, Global Times.
2. "US media article: Hambantota Port Agreement is by no means a "debt trap"" (2020-1-6), refer to the news network.
3. "Reporter Visits 丨 Hambantota Port, the "Future City" of the New Silk Road on the Sea", 2018-8-27, Voice of the Economy.