China on Thursday said it has an “open attitude” towards Indian investments in Sri Lanka after it emerged that Indian company is part of a $3.85 billion joint venture, which will build an oil refinery near the Beijing-built Hambantota port in the south of the island nation.
Earlier this week, Nalin Bandara Jayamaha, the Lankan deputy minister of development strategies and international trade was quoted as saying that the Oman Oil Ministry and a Singapore-investment entity owned by India’s Accord Group have agreed to construct an oil refinery in the country.
It would be the biggest foreign direct investment (FDI) in Sri Lanka where China and India are competing for influence.
“With this refinery, our exports will grow by $7 billion per year,” Jayamaha was quoted by the Reuters news agency as telling reporters at a news conference in Colombo.
Asked to react to reports about the new oil refinery in Sri Lanka and whether Indian investments were source of concern to China, foreign ministry spokesperson Geng Shuang said at the regular ministry briefing that Beijing has an “open attitude” regarding India’s investments in the island nation.
“I don’t have relevant information as of now. But I want to say China and Sri Lanka have cooperation in many areas that yielded concrete outcomes. As far as the port (Hambantota) you mentioned, (it is) another example of our fruitful cooperation,” Geng said.
“We have an open attitude towards Indian investment in Sri Lanka. While we make our contribution to the development of Sri Lanka, China is not as narrow minded as you thought,” he said.
The $3.5 billion refinery project will be located near the southern Sri Lankan port of Hambantota, built with funding from Beijing and eventually included in China’s Belt and Road Initiative, a massive intercontinental connectivity project.
The port had to be handed over on a 99-year lease to a state-owned Chinese company in a debt-to-equity swap raising international concern about Beijing acquiring a strategic asset in the Indian Ocean Region, which could also be used by the military.
In the past few years, China has emerged as the largest source of FDI in Sri Lanka and is involved in several big projects including the Hambantota port and the Colombo Port City project.
Overall, Beijing is said to have invested more than $7 billion in the island nation. Beijing’s state owned companies are also involved in several infrastructure and building in roads and railway networks in Sri Lanka.
According to China’s national news agency, in 2017, Sri Lanka received FDIs worth 1.63 billion dollars with China bringing in the highest FDI followed by India and Singapore.