China is expanding into Asia as trade in the region grows more lucrative. China has been developing port facilities in Pakistan, Bangladesh and Myanmar, and it is planning to build a rail network in Nepal. Now China is investing millions to turn the fishing hamlet of Hambantota in Sri Lanka into a booming new port.
These projects, analysts say, are part of a concerted effort by Chinese leaders and companies to open and expand markets for their goods and services in a part of Asia that has lagged behind in trade and economic development.
Not everyone is delighted at the news. India’s government worries that China is expanding its sphere of regional influence by surrounding India with a "string of pearls".
As recently as the 1990s, China and India’s trade with four South Asian nations — Sri Lanka, Bangladesh, Nepal and Pakistan — was roughly equal. But over the last decade, China has outpaced India.
China has become a partner of choice for big projects like the Hambantota port. China’s Export-Import Bank is financing 85% of the cost of the US$1 billion project, and China Harbour Engineering is building it.
CargoNews Asia reports that President Mahinda Rajapakse of Sri Lanka said he offered the Hambantota port project first to India, but officials there turned it down.