In a recent article (June 28th 2018) written by contributor Panos Mourdoukoutas to globally famous American Business Magazine – Forbes titled “China Is Doing The Same Things To Sri Lanka Great Britain Did To China After The Opium Wars”, it points out that China is turning Sri Lanka into a modern day “semi-colony,” the same way Great Britain and Portugal turned south China into their own semi-colonies back in the mid of 19th century.

“Sri Lanka didn’t lose a war to China. It never ceded any of its territory officially to China” the report notes adding that it handed over economic control of its deep sea Hambantota port to China Merchants Port Holdings (CM Port) recently. Last week, CM Port made a US $584 million payment as part of a $1.12 billion deal to operate Sri Lanka’s deep-sea Hambantota port, according and under the agreement, signed in July 2017, CM Port will run the US $1.5 billion Chinese-built port on a 99-year lease.

The report points out that the $1.12 billion total price is to be used to reduce the Sri Lankan government’s debt to China and in economic terms, this agreement is similar to that China signed back in the aftermath of Opium Wars with the British and the Portuguese, ceding control of its Southern ports to the British and the Portuguese.

According to the report China's growing presence in Sri Lanka began back in 2007, when Beijing provided President Mahinda Rajapaksa both military and diplomatic support to crush the Tamil Tigers. Then followed high profile construction projects and high interest loans that left Sri Lanka heavily indebted to China.

According to government financials Sri Lanka government debt was standing 77.60% of the country's GDP in 2017, well above the 69.69% average for the 1950-2017 period, and Sri Lanka’s Government Budget deficit stands at 5.5% of the country’s GDP, adding to its indebtedness.

The report also highlights that to cope with a rising debt to China, Sri Lanka has signed agreements with China that swap loans  for equity, transforming China into an owner to major infrastructure projects like Sri Lanka’s major port— and a key outpost in the Indian Ocean for Beijing. According to Forbes report this development has irked India, which is slowly becoming encircled by China; and India’s allies that are concerned about China’s aggressive moves to control maritime trade from the South China Sea to the Indian Ocean.

“That’s something investors in Southeast Asian markets should keep a wary eye on, as it opens yet another front between the two Asian giants, raising the geopolitical risk of investing in the region” the report added.

 - Reporting by Devendra Francis