Chinese Foreign Minister Wang Yi, left, poses for the media ahead of his meeting with Sri Lankan Prime Minister Mahinda Rajapaksa in Colombo, Sri Lanka on Sunday, January 9, 2022.

Credit: AP Photo / Eranga Jayawardena

Chinese foreign ministers have traditionally started their diplomatic affairs for the year with a visit to Africa. But this year, Foreign Minister Wang Yi added a few more stops to the trip. After spending four days in East Africa, Wang traveled to the Maldives and Sri Lanka.

Timing is important in diplomacy. That’s why for 32 years, China has reserved Africa as the Foreign Minister’s first overseas tour of the year, signaling the continent’s importance to Beijing’s global leadership plans. Over the years, China has competed successfully with the West to establish itself as Africa’s premier economic partner, grabbing strategic mineral resources across its vast expanse.

But in 2022, the Indo-Pacific will prove to be just as important – if not more – in China’s geopolitical struggle with the United States and its allies. By stopping in the Maldives and Sri Lanka on the way back from Africa this year, Wang has spelled out Beijing’s priorities quite clearly:, Hong Kong, and the wider Pacific.

It is a sensible strategy. Politically, China enjoys more favorable waters in South Asia and the Indian Ocean than in Southeast Asia and the Pacific. In the latter area, Beijing faces opposition from Taiwan, territorial disputes in the South China Sea and East Asia, and a myriad of friction with Australia and New Zealand.

In contrast, much of South Asia and the Indian Ocean have been relatively milder. In Sri Lanka, the dominant clan led by President Gotabaya Rajapaksa – who returned to power in 2019 – have been friendlier to Beijing than their domestic political rivals. While Rajapaksa’s predecessor had attempted to maintain a more delicate balance between India and China, the new government has been more willing to embrace Beijing, even in the face of opposition from its rivals.

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In the Maldives, former pro-Chinese president Abdulla Yameen was ousted from power in 2018 and then jailed, but things have changed since. The coalition government that succeeded Yameen has been plagued by internal feuds, and Yameen himself was acquitted of his crimes and released from prison last month. Shortly thereafter, he was seen rallying to the “India Out” campaign, which protested India’s military presence in the country (the government says there is no such presence in the country. ).

Yet in the midst of a pandemic, the economy can trump politics – and this is where China has both headaches and opportunities.

In a few countries, Chinese investments are more controversial than in Sri Lanka. Opposition leaders regularly speak of the “debt trap” they claim was caused by Beijing’s Belt and Road Initiative (BRI). These concerns only became more acute as COVID-19 took its toll. Foreign exchange reserves have now fallen to around $ 1.6 billion – barely enough for a few weeks of imports, according to the Associated Press. In 2022 alone, Sri Lanka faces over $ 7 billion in external debt obligations. Inflation reached over 12 percent at the end of December and food inflation rose to over 22 percent.

Similar problems have ravaged the Maldives, which owe 40% of their GDP to China. The pandemic has shut down much of the tourism sector, which accounts for 30% of Maldivian GDP and more than 60% of its foreign revenue. The two countries have been downgraded by various rating agencies for their pandemic problems. When Wang visited Colombo this weekend, Rajapaksa asked him to restructure Sri Lanka’s debt.

But the problem for Sri Lanka and the Maldives is that China’s rivals haven’t quite managed to ramp up either.

Since Yameen stepped down in 2018, India has made significant inroads in the Maldives’ dependence on China. India is currently managing the Maldives’ largest infrastructure project – the Greater Male Connectivity Project – and some 45 large development projects worth more than $ 2 billion. It has also contributed to the largest share of tourists arriving in the Maldives over the past two years – nearly 300,000 in 2021 alone.

But as its own economy turns under the pandemic, New Delhi’s ability to consistently compete with Beijing’s economic influence is suspect. Long before Rajapaksa launched his appeal to Wang this weekend, Sri Lanka asked India for a debt moratorium in February 2020. New Delhi did not respond to this request. Sri Lanka has also made more recent requests for emergency credit lines to import food, fuel and medicine, as well as a currency swap deal. New Delhi did not respond to these either.

Despite its historical advantages, India has also lost its primacy over trade with China more recently. Between September 2020 and September 2021, trade between China and Sri Lanka increased by more than 85%, according to the Observatory of Economic Complexity. Trade between China and the Maldives has grown by 80 percent over the same period. India’s trade relations, on the other hand, have remained relatively stable.

As the virus continues to spread, countries will seek to align more strongly with regional powers capable of meeting their economic needs. In 2020, when asked why Colombo kept returning to China to take on more debt, a Sri Lankan minister simply said China had “the most cash now.” This fact puts the advantage firmly in Beijing’s favor.