China sees Sri Lanka’s Hambantota Port as key strategic hub linking Asia Pacific with Europe and America

China sees Sri Lanka’s Hambantota Port as key strategic hub linking Asia Pacific with Europe and America

Sri Lanka’s southern Port of Hambantota is seen by China as a key strategic hub linking Asia Pacific with Europe and North America, and one of the biggest areas of investment for the Chinese as it looks to build its One Belt, One Road – CMPorts has been operating it since 2017, Port Technology has stated.

Accordingly, China Merchant Ports Holdings (CMPort) has sold 23.5% of the Hambantota Port in Sri Lanka to Fujian Transportation Maritime Silk Road Investment and Management (Fujian TMSR).

In a statement, CMPort has said it will transfer part of its shares in its wholly owned subsidiary Gainpro Resources, which owns 85% of the Hambantota International Port Group (HIPG) of the Hambantota International Port Group (HIPG) for approximately US$ 268 million.

According to a report on Port Technology, the agreement was made official during an online signing ceremony between Deng Renjie, Executive Vice President of China Merchants Group Company Limited, Lu Yongxin, Deputy General Manager of CMPort and others.

The ceremony also saw Fujian Provincial Communication Transportation Group Co., Ltd (FJCT), a long standing partner of CMPorts and affiliate of Fujian TMSR, agree to act as a guarantor of the deal.

Deng Renjie during the signing ceremony has said: “CMG and FJCT has a long history of collaboration, this cooperation is not only a role model for both sides to integrate resources, complement each other’s advantages and invest overseas as a group, but also the injection of new impetus to speed up the construction of Hambantota as South Asia shipping center.

“I hope both sides will give full play to their respective advantages, seize the opportunity of digital transformation of port and shipping industry and domestic industrial transfer to explore the cooperation of port business at home and abroad, fasten the injection of advantageous industries in the industrial park of Hambantota.” 

OSL take:

China’s Belt and Road Initiative has placed much importance on Sri Lanka as hub in the South Asian region. Sri Lanka’s geographical positioning in the Indian Ocean, ease of doing business environment and the many trade agreements as well as trade concessions enjoyed by the country have made Sri Lanka a business hub in the South Asian region. This is an encouraging sign for Chinese businesses/investors to explore opportunities in Sri Lanka. Local businesses could also explore possibilities of forming partnerships with Chinese businesses to further develop and explains business operations. 

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Article Code : VBS/AT/23072020/Z_4

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