India Slams China for ‘Debt-Driven Agendas’ in Spat Over Vessel Visit to Sri Lanka

China's research and survey vessel, the Yuan Wang 5, arrives at Hambantota port on Aug.16, 2022. Ishara S. Kodikara/AFP via Getty Images

The Indian High Commission in Sri Lanka slammed a Chinese envoy for accusing India of interfering in Sri Lanka’s internal affairs, saying that the island nation doesn’t need “unwanted pressure” while it deals with a national economic crisis.

India and China were at odds over the docking of a Chinese research ship in Sri Lanka’s Hambantota port for replenishment on Aug. 16, which India had strongly opposed because of security concerns.

On Aug. 26, Chinese envoy Qi Zhenhong wrote in the Sri Lankan Guardian that Sri Lanka’s decision to approve the Yuan Wang 5’s port call shouldn’t be hampered by “external obstruction.”

In his piece, Qi noted that Sri Lanka had “overcome aggression from its northern neighbor 17 times” and “colonization by the west for 450 years.”

“External obstruction based on so-called ’security concerns’ but without any evidence from certain forces is de facto a thorough interference into Sri Lanka’s sovereignty and independence,” he stated.

In response, the Indian High Commission in Colombo criticized the Chinese envoy for violating “basic diplomatic etiquette” and said that his remarks may reflect his “personal trait” or “a larger national attitude.”

“His view of Sri Lanka’s northern neighbor may be colored by how his own country behaves. India, we assure him, is very different,” the office said in a series of tweets.

“Opaqueness and debt-driven agendas are now a major challenge, especially for smaller nations. Recent developments are a caution,” it said. “Sri Lanka needs support, not unwanted pressure or unnecessary controversies to serve another country’s agenda.”

China’s Belt and Road Initiative (BRI, also known as One Belt, One Road) has been ascribed to Sri Lanka’s economic turmoil. In 2017, Sri Lanka leased its Hambantota port to China for 99 years to convert its Chinese loan into equity; India is concerned that the port will be used as a military base.

Sri Lanka initially requested a delay in the ship’s arrival over India’s objections, but the ship was eventually approved following “extensive consultations at a high level.”

The Yuan Wang 5 has been described as a “spy ship” by India’s media. With approximately 466 miles (750 kilometers) of aerial reach, it could track Indian ports in Kerala, Tamil Nadu, and Andhra Pradesh while docking in Sri Lanka, Indian Express reported.

Others, such as shipping analytics websites, have called the Yuan Wang 5 a research and survey vessel. The Pentagon says the Yuan Wang ships are operated by the Strategic Support Force of the People’s Liberation Army.

Debt Restructuring Under Threat

The International Monetary Fund (IMF) has said that cash-strapped Sri Lanka must work with its largest creditor, China, to resolve debt issues. Sri Lanka is also in talks with the IMF for a bailout package.

The island nation has $10 billion in bilateral debt as of August 2022, of which 44 percent is owed to China, according to Sri Lanka’s finance ministry (pdf). Japan holds 32 percent of Sri Lanka’s debt, while India holds another 10 percent.

Sri Lanka had asked Beijing to help restructure its debt repayments and to amend the terms of a $1.5 billion yuan-denominated swap deal so the fund can be used to pay for essential imports.

On the other hand, India has emerged as Sri Lanka’s lifeline, providing about $4 billion in credit lines and swaps to help the country revive its economy.

President Ranil Wickremesinghe said on Aug. 18 that he would travel to Japan in September to ask Japan’s government to initiate debt restructuring talks with Sri Lanka’s main creditors, including China and India.