Chinese Investment and the BRI in Sri Lanka

Chatham House commissioned a study of Chinese outbound investment and the BRI in Sri Lanka. The study, which is the basis for this paper, focused on several issues concerning Chinese infrastructure investment in 2006–19 including economic aspects and implications for labour, the environment and institutions. The paper examines the broad benefits and costs of the BRI and its projects to Sri Lanka and the lessons that may improve future BRI projects in Sri Lanka and elsewhere.

China’s Belt and Road Initiative (BRI) is having profound impacts on recipient countries. Recently, Chinese outbound investment in Sri Lanka has come under scrutiny due to intensifying geopolitical rivalries in the Indian Ocean as well as Sri Lanka’s prime location and ports in the region.

Much of the analysis on this topic so far has focused on how the economic relationship has informed Chinese geopolitical ambitions, via a so-called ‘debt-trap diplomacy’. Such a framing may be misleading, while also overlooking other dimensions of Chinese investment that warrant closer examination.

A recent Chatham House paper examines the pattern of Chinese investment in Sri Lanka to reveal a nuanced picture of benefits and costs.

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