It would not necessarily be a bad thing if healthy competition between China and India in the Sri Lankan market could be further stirred up. While China and Sri Lanka ramp up efforts to finalize a free trade agreement (FTA) this year, India is pushing for the signing of the Economic Technology Cooperation Agreement with Sri Lanka to broaden the scope of its existing FTA. It seems that neither China or India wants to be left behind in boosting its presence in the island nation.

After a few timid signs of warming, Sino-Indian relations seem to be headed for the freezer. While Beijing refuses to take Indian security concerns seriously, New Delhi may have decided to take the Chinese challenge head-on. To complicate matters for India, its erstwhile ally Russia, which has become a close friend of China, is showing interest in establishing closer ties with Pakistan.

The heavier the debt burden on smaller countries, the greater China’s own leverage becomes
If there is one thing at which China’s leaders truly excel, it is the use of economic tools to advance their country’s geostrategic interests. Through its US $1 trillion “one belt, one road” initiative, China is supporting infrastructure projects in strategically located developing countries, often by extending huge loans to their governments. As a result, countries are becoming ensnared in a debt trap that leaves them vulnerable to China’s influence.