A container ship is pictured docked at the Colombo South Harbor during its opening ceremony in Colombo August 5, 2013.

Last month, Sri Lanka officially lifted a hold on the Colombo Port City project, a $1.4 billion Chinese initiative to construct a “mini-city” atop reclaimed land at the country’s capital. The project is the largest in Sri Lanka’s history and falls under Beijing’s One Belt, One Road and New Silk Road initiatives, which are designed in part to expand and secure China’s trade routes throughout Asia.

The controversy over the port city offers a taste of the potential consequences the One Belt initiative could bring: it has plunged Sri Lanka into debt, rekindled the Chinese-Indian rivalry, and raised questions about Beijing’s use of economic statecraft to advance its strategic objectives.


China’s friendly relationship with Sri Lanka began in earnest after the election of Sri Lankan President Mahinda Rajapaksa in 2005. Colombo had spent over two decades fighting a costly war against the

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