The growing number of Chinese tourists traveling to Sri Lanka has been on the rise these past two years. Whether Sri Lanka can ever become a truly major destination for Chinese tourists is debatable, as it inevitably has to compete with closer and cheaper destinations right on China’s doorstep like Thailand or Vietnam. Still, that doesn’t mean that the Chinese and Sri Lankan governments aren’t taking Chinese travel to the island nation seriously. Chinese state media has been particularly keen on highlighting tourism growth to Sri Lanka, and that’s unlikely to change. Although Sri Lanka is a small country, it holds an essential place in China’s larger geopolitical goals. Tourism is the more public and palatable side of Beijing’s engagement with Colombo, and a means of distracting from the more economically and militarily strategic goals being pursued.
In 2017, Sri Lanka attracted almost 269,000 Chinese arrivals. While not a huge number, it belies the importance that these arrivals hold for the country’s tourism industry. The top source market in 2017 was India, with almost 385,000 arrivals. In total, Sri Lanka attracted 2.1 million foreign visitors in 2017. So while 269,000 isn’t an enormous number, it still accounted for 12.7 percent of total arrivals, not exactly a small figure. Moreover, the majority of the Indian arrivals likely aren’t spending as much per capita as their Chinese counterparts.
Sri Lanka attracts many Chinese tourists, but the number of arrivals still pales in comparison to countries like Thailand and Vietnam
Overall, Chinese arrivals to Sri Lanka are also growing quite quickly. The latest numbers put arrivals growth at 18.7 percent for June.
Still, these figures are easily dwarfed by the 10 million plus Chinese tourists that travel to Thailand every year, or the 4 million that traveled to Vietnam last year. In short, while Chinese tourism is important for Sri Lanka, the same can’t be said of the country in the context of the great boom of outbound Chinese tourism.
But that hasn’t stopped Chinese state media repeatedly hailing the rapid growth of Chinese tourism to Sri Lanka, or highlighting overall efforts by Colombo to boost the profile of the country in the international tourism market. Xinhua, for example, has published stories like “Sri Lanka to build southern coastal city to leading tourism hub in South Asia” and “Sri Lanka to launch mega campaign to attract tourists during off season.”
Chinese state media have been eager to publicize the alleged success and innovativeness of the Sri Lankan tourism industry
The repeated coverage of Sri Lanka and its tourism industry indicates how important the country is within the Chinese government’s larger strategies, but not because of the country’s historical and natural treasures and their ability to drive tourism as Chinese state media like to imply.
Instead, Sri Lanka’s importance lies primarily in its geographic location. The biggest factor in this is China’s ongoing Belt and Road Initiative, which aims to create a network of Beijing-funded infrastructure projects to connect China with a network of mostly developing Asian, African, and European economies. The goals of the project are myriad, but at its core, it hopes to construct a global trading network that puts China at its center by using Chinese funding to curry favor with its neighbors and facilitate new global partnerships.
Beijing expects to gain much more from its relationship with Sri Lanka than merely better tourism ties
Tourism is undeniably a big part of this project, although it’s importance mostly lies in marketing the initiative’s projects and a relationship with China as something that will drive economic development.
If the goal is to connect China with the likes of the Gulf States, Egypt, Pakistan, and the Mediterranean, Sri Lanka logically is one of the best, if not the best, placed countries on the Indian Ocean to facilitate maritime trade to and from China. It’s certainly something that China has picked up on, with partially state-owned China Merchants Port Holdings acquiring a 99-year lease to the Chinese-built port in Hambantota.
Although, a New York Times piece on the Chinese-built port notes that there was little, if any, apparent need for the port for Sri Lanka’s economy. In fact, the project was built solely for Chinese interests and those of President Mahinda Rajapaksa. The area around the port is a critical area for Rajapaksa’s political base, and a means to illustrate his effectiveness as a political leader.
Corruption is most likely a key reason why Sri Lanka now has a Chinese-built port that it neither needs nor can afford
The move raised red flags all over the world, not simply because of the incredibly long duration of the lease. There are worries that the Chinese government will utilize the port to serve as a naval base to project military power in the Indian Ocean, something that both Beijing and Colombo deny. This would prove especially challenging for India, one of China’s main regional geopolitical rivals.
Most recently, Sri Lanka announced that it would be moving one of its own naval bases to the Chinese-owned port from the city of Galle, the very same city Xinhua coincidentally noted that the Sri Lankan government intended to turn into a “leading tourism hub in South Asia.”
Just as concerning are the circumstances in which China Merchants Port Holdings acquired the 99-year lease to the port. In particular, the levels of debt assumed by Sri Lanka to pay for the Chinese construction of the deepwater port were so high that the government had no reasonable means to ever meet its debt payments. The total debt for the port currently stands at $13 billion, but Sri Lanka is only expecting to raise government revenue to $13.3 billion in 2018.
A Chinese-controlled naval base right next to India would help China counter Indian influence in the region
There is substantial evidence that Chinese actors paid millions in bribes to Sri Lankan officials, including spending millions to fund President Rajapaksa’s reelection, in order to ink the deal and that the Chinese government never expected Sri Lanka to keep up with the payments. Rather, it’s possible that the Chinese government hoped that the country would default and be forced to turn over the port to Chinese control so that they can control this key strategic point on Indian Ocean shipping lanes, as well as counter Indian influence.
So, for China, highlighting the growth and development of Sri Lanka’s tourism industry, and Chinese involvement in it, isn’t just a means of highlighting the potential revenue associated with Chinese tourism growth. Rather, it’s also a key way that Beijing can distract from the arguably more sinister-looking efforts it’s making to gain a foothold in Sri Lanka and the Indian Ocean to promote Chinese political and, potentially, military influence abroad.