- 27 agreements signed between Sri Lanka and China in 2014
The recent visit by the Chinese President that chalked up $ 4 billion on projects was interesting, but a point to note is that the investment in India by the Chinese that was signed post the visit to Sri Lanka added to $ 90 billion, which showed the appetite of the Chinese economy for global trade.
The words of late Foreign Minister Lakshman Kadirgamar – “even though the overall lending by China is touching $ 4.1 billion, China has never sought to influence the domestic politics of Sri Lanka” – are interesting, given that the TNA was called for a meeting post the visit to Premier Modi in India.
Whilst acknowledging the overall non-interference of China on domestic policy, we must keep in mind that China is setting the stage to be a super power globally. Sri Lanka may be part of the bigger picture which to my mind was termed with the official joint statement termed ‘Plan of Action of the Democratic Socialist Republic of Sri Lanka and the People’s Republic of China to deepen the Strategic Cooperation Partnership,’ which was not the wording for any of the agreements signed between China and Maldives or for that matter China and India.
Let me take you back to the far-reaching thinking that China has on the area of development.
In the 1980s, China’s outward-oriented industrialisation began and the urban population was at 19.6% of the country’s total population. With the accelerated development drive that took place by 2010, China had recorded an urban population of 42.9%, beating India (23.1%), Pakistan (28.1%) and Indonesia (22.1%), which gives us the pace at which China was charging ahead.
The rural to city drive has had many ramifications. China had to ensure there is continuity on the jobs and ensure that there will be no urban shanties like what happened in South America. Road efficiency had to be improved so that productivity levels can be maintained. This led to infrastructural improvements to be done on energy, water treatment waste disposal and protecting the environment so that the quality of life will be in synch to the developmental agenda.
It was clear that China’s growth strategy was fuelled by the movement of people from the rural areas to the city – urbanisation. This gave birth to better educated rural youngsters, injecting entrepreneurship and dynamism to the urban labour market and the money earned was sent back to the villages, which bolstered rural household consumption. This two-pronged income increase seen in the urban areas and the rural helped China grow and today it is one of the most admired nations for economic growth.
I believe this was not an accident but a careful orchestration by the policymakers of China, who were the same people who conceptualised the Olympic Games into the Chinese growth agenda and today we see the same brains behind the Colombo Port project, operating of the Colombo South Container Terminal, developmental of a International Maritime Centre and the Hub Port extension in Hambantota.
Urbanisation key issue – 700 m people
Going back in time on China, with urbanisation the country was faced with a problem. The urban population has increased from 191 million seen in the 1980s to 700 million plus in 2010, which demanded massive investment in transport, infrastructure, water management, waste management and environment so that the quality of life of a Chinese national in the urban areas could be maintained. If this had not been done, China would have headed into a crisis on the quality of life with serious ramifications not only to China but to the world.
The hidden agenda
In this backdrop China was awarded the right to host one of the greatest sporting events of the world – the Olympic Games. The crafty policymakers in China did not allow a tactic to dominate the strategy but instead used the Olympics to fit into the overall strategy of urbanisation. It was a hand-in-glove strategic fit. This is something that Sri Lanka needs to keep in mind when the country inked a $ 3.5 billion plus investment in Sri Lanka – it is always a part of a bigger picture.
Given the strategic thought of catering to the urbanisation issue, China embarked on one of the most passionate and aggressive development agendas of the world. It is said that almost 90% of the cranes in the world was in China between 2004 and 2008. The Chinese Government pumped in a colossal 40 billion dollars into the developmental agenda of the Olympics, powering an economic drive at a blistering pace that even made the economy overheat with GDP growth above 11%. The vision set out by the Chinese policymakers made up a happy marriage – a new Beijing and great Olympics.
5-year game plan
As I see it, the brilliance of the master plan was such that the Beijing Olympics infrastructure was crafted in such way that it fitted the five-year City Plan and was not done just to cater to the short-term Olympics requirements. Of the 40 billion dollars that was invested in the Beijing Olympics, almost 26 billion dollars were spent on improving transportation. This was incidentally a key issue identified in the urbanisation process that gives us an idea of China’s strategic mindset.
The transportation improvements included railway hubs and new railway lines, improvements on the Beijing subway, Tiajin expressway to be upgraded so that interaction with the outside world would be easier and stimulate economic growth based on the principle of connectivity. Another 10 billion was pumped into energy and infrastructure which included improvements on housing conditions, relocation of construction sites and development of commercial sites as per the overall five-year master plan.
Five new transformer stations were constructed that can generate 220 kilovolts of power. Nine garbage treatment centres were built. The latest technology was used in all construction which has been assessed by the top scientists of the world.
The 10 billion investment on infrastructure included a sewage treatment facility, 12,700 sports facility areas, 67 theatres and 72 places for performances that catered to the urbanisation strategy China was driving towards, once again a master stroke from the specialists of the new age world.
Another 2.3 billion dollars was invested for water resource management that included 11 water treatment plants which can increase productivity to 525,000 cubic meters per day of clean water, which was once again on the five-year city plan. Another 2.5 billion was set aside for the development of the urban environment.
Currently, forestation in the city is as 51.6% so that every 500 metres a green park is accessible to a new-age Chinese national. This will facilitate cleaner air. But the classic to my mind was the 1.9 billion dollars invested on the venues which were designed in a way so that six of them were erected on the Beijing University area itself, which explains the strategic thinking at play.
The bigger picture
The hidden agenda of China was that with this improvement, all regions will be linked to the expressway. In addition to this developmental strategy airports express lines were set up, Olympic extensions were crafted so that the end objective was that the urbanisation agenda took centre stage on the development pathway. One key point stressed by the policymakers was that post games utilisation of all infrastructure was at its maximum.
Hence the world saw how the Olympics was used as a vehicle to drive aggressive development but on the bigger game plan that has been conceptualised. It was a masterstroke by the superpower nation and we must now understand the bigger agenda of China in Sri Lanka with the overall investment to Sri Lanka, now touching 10 billion dollars in the near future.
100 years from now
The Chinese, being the catalyst of the new world order of today, had scientifically evaluated all development for a time horizon of 100 years from now so that the dream of ‘New Beijing and Great Olympics’ could be sustained.
There had apparently been numerous simulations done to determine what shape Beijing will take when the urban population grows to 1,000 million from the current 700 million. This explains the hidden economic agenda of the master craftsmen of China, which I think it’s time Sri Lanka takes note.
Next steps – Sri Lanka
I feel Sri Lanka needs to be pragmatic. Given the issues that we are faced with at the UN and the case studies of developing countries, latching on to a superpower is the best way to develop the country at the pace at which we are developing.
Let’s accept it, if not for China stepping into provide grant or soft loan support, this country we would not have had the infrastructure that we currently enjoy. It is also very clear that we could not have demonstrated 7% GDP growth. Now the challenge is how we balance the five billion trade we do with US and the four billion trade with India.
The FTA with China will also hold the key to the trade development that Sri Lanka will see between the two countries.
Even if China consumes Sri Lanka’s total current exports of 12 billion dollars, it will be less than 1% of China’s import bill. So we have no option but to link up with China on all fronts as we can be the next Hong Kong. The big question is, how can the private sector align itself with China?
[Dr. Rohantha Athukorala is a Special Advisor to the Ministry of Trade and Commerce for the last six years and Chairman of the Tea Cluster of the Ministry of Industries. He is a Board Director on more than 15 organisations in Sri Lanka and is the Country Head for Turner International (USA). He is an Alumnus of Harvard Kennedy School (Boston).]