China's economic influence in South Asia: a case study of Sri Lanka

Stanojević, Nataša (2024) China's economic influence in South Asia: a case study of Sri Lanka. In: China in World and Regional Politics. History and Modernity. Institute of China and Contemporary Asia of the Russian Academy of Sciences (ICCA RAS), pp. 340-354.

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Abstract

China's economic influence in South Asia, primarily through initiatives like the Belt and Road Initiative (BRI), has prompted significant analysis of its impact on the region's economies. This research specifically examines China's expanding economic presence in South Asia, driven by the ambitious BRI. It focuses on China's strategic partnerships with regional countries, emphasizing bilateral economic relations, trade dynamics, investments, and associated debt implications. The study uses Sri Lanka as a case study to analyze the intricate dynamics of China's economic involvement in South Asia. Despite concerns about trade imbalances, competition with local industries, and debt sustainability, research indicates that debts owed to Chinese creditors are not solely tied to Chinese investments. Sri Lanka's experience, illustrated by the leasing of the Hambantota port to a Chinese firm, highlights the nuanced nature of these relationships. Contrary to misconceptions, this transaction did not worsen Sri Lanka's debt burden but instead provided crucial financial resources for other economic priorities. Despite challenges like the COVID-19 pandemic and geopolitical tensions, the leasing of the Hambantota port has yielded promising results, presenting opportunities for economic diversification and growth in the Sri Lankan economy. As global conditions stabilize, the enduring ef- fects of China's economic influence in South Asia, including investment trends and debt dynamics, underscore the evolving landscape of regional economic cooperation and development.

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