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A Hospital And Clean Water: China on The Charm Offensive in Sri Lanka

Reuters

   COLOMBO, SRI LANKA - Amid the lush paddy fields of central Sri Lanka, a
   large, state-of-the-art hospital rises between the cranes and cement
   mixers.

   Its perimeter walls are adorned with pictures of China's president Xi
   Jinping and prime minister Li Keqiang, along with Sri Lankan leaders
   hailing the $67 million gift from Beijing.

   The hospital, specializing in kidney-related diseases, is helping China
   gain popular support in a country where its mega-projects have added to
   rising debt and raised concerns about excessive economic and political
   leverage.

   Water plants and a Chinese radio station promoting its economic and
   social programs are part of the campaign to win over doubters.

   China has invested an estimated $11 billion in Sri Lanka, around $8
   billion in the form of loans related to Xi's signature "Belt and Road
   Initiative" designed to boost trade and transport links across Asia.

   Chinese firms, employing thousands of local workers, have built a giant
   port and plan to construct power stations and expressways as well.

   But the terms of some of those projects have drawn criticism from
   politicians in Sri Lanka and overseas and led to policy reversals that
   have stalled China's ambitions on the Indian Ocean island.

   "We ... expect our companies to help the Sri Lankan people with
   donations and corporate social responsibility work," China's ambassador
   to Sri Lanka, Cheng Xueyuan, said last month after inviting local
   journalists on a tour of the big Chinese investment projects on the
   island.

   The charm offensive may pay dividends.

   Friends in high places

   This month's presidential election, won by Gotabaya Rajapaksa, puts
   Beijing back in the driving seat in Sri Lanka.

   Gotabaya's brother, former president Mahinda Rajapaksa, courted China
   in the aftermath of the 26-year civil war against Tamil separatists
   that ended in 2009.

   Much of the world shunned Sri Lanka, accusing the Rajapaksas of
   widespread human rights violations during the conflict - allegations
   which they deny.

   China seized the opportunity to develop a vital staging post to much of
   Asia, Africa and beyond.

   Ties soured in 2015 with the election of Maithripala Sirisena as
   president. Wary of growing Chinese influence and mounting debt, he
   suspended all Chinese investment projects, citing allegations of
   corruption and overpricing.

   Sirisena eventually allowed projects to resume the following year,
   although he demanded changes to some terms.

   At his inauguration on Monday, Rajapaksa said Sri Lanka didn't want to
   be drawn into a regional quest for influence.

   China's expansion has come at the expense of India, traditionally Sri
   Lanka's economic and diplomatic champion.

   "We want to remain neutral in our foreign relations and stay out of any
   conflicts amongst the world powers."

   But shortly before his election, adviser Palitha Kohona told reporters
   that Rajapaksa would "restore the relationship (with China) to where it
   was.

   "I suppose the thinking was if we upset China, the West would come to
   us with endless bags of gold ... But the bags of gold never
   materialized."

   Hearts and minds

   At Polonarruwa, where the kidney hospital is due to open early next
   year, families say their struggle to get treatment should ease once
   they have an alternative to over-stretched local hospitals.

   "It is really a good project because of the number of people who are
   suffering in this area. At the moment, we are struggling for routine
   checkups and dialysis," said Lakmal Prasad, 27, a former state employee
   who's already had a kidney transplant.

   China has also completed two water facilities in a parched part of the
   island, while a third, the biggest, is nearing completion and will
   supply clean drinking water to villages in the Puttalam area.

   But China's biggest interest lies in mega-projects. The new southern
   port of Hambantota, near one of the world's busiest shipping lanes,
   cost $1.4 billion and kicked off a major post-war construction boom.

   It also raised fears of a "debt trap". When Sri Lanka was unable to pay
   back the loan on the port, it was forced to hand over control to China
   on a 99-year lease in 2017.

   Ambassador Cheng said China's construction spree had created as many as
   100,000 jobs across the island of 22 million people and there were more
   opportunities opening up.

   To help spread the message, a Chinese state-run radio station
   broadcasts reports about Chinese-backed economic and social programs in
   Sri Lanka in the local Sinhalese language.

   It also offers lessons in Chinese language to help the growing number
   of Sri Lankans working with Chinese, from grocers to bank managers.

   Last week, it featured a story about a Sri Lankan man who started
   working with Chinese telecom equipment maker Huawei in Sri Lanka a few
   years ago and the company moved him to Shanghai.

   'No one stopping them'

   The next big-ticket projects that China wants to develop include a $1
   billion central highway connecting the capital Colombo with the central
   Kandy district, a 15,000-hectare investment zone in Hambantota and oil
   refineries.

   China Harbor Engineering Company is already building a $1.4 billion
   port city next to Colombo port that is designed to be a financial
   center with hotels, marinas and even a motor racing track on land
   reclaimed from the sea.

   "Their focus has been unrelenting; even over the last few years their
   projects have all gone through. There's no one stopping them, in the
   end," said an Asian diplomat. "But they are also doing a lot more of
   soft-power diplomacy."

   To explain the sheer scale of the Belt and Road Initiative, Beijing has
   taken Sri Lankan politicians, journalists and local residents on tours
   to China.

   Muhshi Rahmathullah, a former councilor in the northwestern town of
   Puttalam where China Machinery Engineering Corporation built a 900 MW
   coal-fired power station, said he was among a group of 15 people who
   went on a company-funded tour of China.

   The Puttalam plant meets half of Sri Lanka's electricity demand, but
   some residents have opposed it, saying it had caused air and noise
   pollution.

   "They showed us power plants and said that there won't be any
   environmental impact," Rahmatullah said of his trip. "They wanted to
   show how power plants help develop the country."