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CWA # 14, 18 May 2018
Global Politics
Why Maldives is important to China?

  Dhruv Ashok

For China, the strategic significance of Maldives stems from the latter’s proximity to international sea lanes through which two-thirds of the world’s oil and half of its container shipments pass. Male becomes important in this context.

China-Maldives relations have dramatically expanded since Xi Jinping’s Male visit in 2014. Beijing has been building ports and financing infrastructural projects as has been the case with Pakistan and Sri Lanka. Why is China interested in the Maldives? Will the recent bilateral agreements increase Beijing’s influence in Male?

The strategic significance of the Maldives for China

For China, the strategic significance of Maldives stems from the latter’s proximity to international sea lanes through which two-thirds of the world’s oil and half of its container shipments pass. Male becomes important in this context.

The Indian Ocean has become essential for China as over 80 percent of its energy imports pass through it. China views any disruption to its strategic lines of communication in the Indian Ocean as a serious threat to its energy-driven economic growth.

China`s Indian ocean push corresponds with the Indo-Pacific became prominent in Western diplomatic circles. Indo Pacific comprises a partnership involving not only Washington and New Delhi but also Canberra and Tokyo who view China’s economic and military rise with concern due to its aggressive stances in the South China Sea.

It is in this context of a perceived U.S containment strategy specifically directed towards China that the Indian Ocean littoral states like the Maldives, Sri Lanka and Seychelles become important for Beijing not just because of their strategic location but also to bring them to the Chinese side.

Understanding the role of bilateral agreements in fostering Sino Maldivian relations

China and the Maldives signed a defence agreement in 2012 and both nations expressed a desire to deepen military cooperation in areas such as personal training and maritime security relations. China has already started offering training to Maldivian maritime personnel.

 A large number of Chinese visit the Maldives as tourists besides substantial investments. According to a report by the centre for global development, the largest Chinese investment projects are $ 830 million upgrades of the airport, including a 1.3-mile bridge linking the airport island with the capital which is a $ 400 project.

A Free Trade Agreement (FTA) was signed during Maldivian President Abdulla Yameen`s four-day visit to Beijing in December 2017. According to the Ministry of Commerce People’s Republic of China website China and Maldives under FTA  “would reduce tariffs of over 95 percent of the goods to zero”.

China and the Maldives also signed a memorandum of understanding (MOU) that brings Male into the maritime silk road initiative which is a component of China’s ambitious belt and road initiative. Other pacts that were signed during Yameen’s visit aimed to deepen cooperation in several fields such as health, tourism, technology and climate change.

FTA’s opponents such as former Maldivian President Nasheed have warned of a looming Chinese debt trap. The former president told the Times of India already over 70 percent of Maldives current foreign debt is owed to China, on which the interest alone ” is more than 20 percent of Maldives budget”.Nasheed also warned that FTA can be expected to draw the Maldives deeper into Chinese debt giving Beijing huge leverage over Male undermining the country’s sovereignty and independence.

This has been the case of other countries such as Sri Lanka for instance where the Sri Lankan government being unable to repay Chinese loans for financing various infrastructure projects in the country has agreed to hand over Hambantota port to China on a 99-year lease to tide down some of the debt.

Dhruv Ashok is pursuing Masters in International Studies at Christ University and is a graduate in History, Economics and Political Science at Christ University, Bengaluru

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