The Chinese spy ship and the dangers of debt-trap diplomacy

A Chinese spy ship that docked in Sri Lanka on Tuesday in defiance of Indian and western protests is the latest symbol of China’s power and ambition in the Indian Ocean. It is also a stark demonstration and warning of the harder edges of Beijing’s debt trap diplomacy.

The Yuan Wang 5, bristling with satellite dishes and antennas, is described by China as a ‘research and scientific vessel’. In reality it is one of the latest generation of space-tracking ships, able to monitor satellites, as well as rocket and intercontinental ballistic missile launches. There is speculation that it carries a fleet of underwater drones. It is in other words, a formidable piece of surveillance kit.

For days the Indian and American governments pressured Sri Lanka to keep the ship away. India feared it would snoop on its own installations in the region, and is concerned more generally about China’s encroachment into its transitional areas of influence. In an attempt to pressure Colombo, it even donated a Dornier maritime reconnaissance aircraft to Sri Lanka just a day before the Chinese ship’s arrival. Delhi then lodged a verbal protest with the Sri Lankan government against the ship's visit.

Initially Colombo asked China to postpone the visit, but eventually caved in, saying the ship could dock for a week on condition it did not carry out ‘research’ while in Sri Lankan waters. Colombo bowed to a brutal reality: Sri Lanka is bankrupt, has descended into political turmoil, and China is its biggest creditor. It has reneged on its debts and needs Beijing if it is ever to restructure them – and that stifling dependency means it could not resist the pressure from China.

The port in which the spy ship docked is Hambantota, itself a symbol of the dangers of debt dependency and Communist party ambition. It was not only built by China, but leased for 99 years to a Chinese company in 2017 after Sri Lanka was no longer able to keep up with debt repayments. The Hambantota area is home to several Chinese projects, including the port and an airport. It is also the hometown of the Rajapaksa brothers – Gotabaya Rajapaksa, the former president who has fled the country, and Mahinda, an earlier leader. Both have been accused of corruption, nepotism and bad governance. Both they were also good friends of China, and on their watch Sri Lanka borrowed an estimated $10 billion from Beijing. This funded a binge of projects, dismissed by critics as white elephants, and which also included a cricket stadium and a 350m tower in the capitol Columbo, topped by a giant lotus that was supposed to represent a ‘brilliant future’ of cooperation with Beijing.

Officially the Yuan Wang 5 is in Hambantota to replenish fuel and other supplies, though bankrupt Sri Lanka has precious little of either. The country is in the middle of a severe fuel crisis due to a lack of foreign currency, and away from the port fuel for vehicles is only available on a weekly quota basis. The explanation for the visit has raised wry Indian smiles. ‘So what is the Yuan Wang up to?’, one Indian analyst reportedly asked. ‘Definitely, it's not on a picnic.’

Whatever it is up to, it is a symbol of the folly of overdependence on Chinese money and the corrosive impact that can have on a country’s sovereignty. With an international debt crisis gathering pace, it is unlikely to be the last demonstration of China’s dept trap diplomacy, and of Beijing’s determination to use that to leverage its strategic interests.