Maldives Election Results Empower a Critic of China

By Mike Ives

President Ibrahim Mohamed Solih, center left, of the Maldives, along with former President Mohamed Nasheed, center right, at an election campaign rally in Malé, the capital, this month.

HONG KONG — A political party led by the president of the Maldives appeared to have won decisively in parliamentary elections over the weekend, a result that may help him restore political freedoms in a strategically important country with an authoritarian past.
The president, Ibrahim Mohamed Solih, had won a resounding victory in presidential elections last September.

But parts of his party’s agenda have been stymied because some of its allies in a governing coalition are aligned with a former strongman leader, Abdulla Yameen, who has been widely accused of corruption and repression.
The Maldives, a chain of islands southwest of India, has traditionally fallen within New Delhi’s sphere of influence. 

Yet it also stretches across maritime routes that are crucial to China, and Beijing has recently spent hundreds of millions of dollars on infrastructure projects in the Maldives.
Critics have warned of the Maldives falling prey to “debt-trap diplomacy,” meaning that it could be pressured to offer security concessions to China as repayment for large loans. 

Politicians, as well as Western and Indian diplomats, have warned that a growing dependence on China could be a threat to the country’s sovereignty.
Some political analysts saw the victory last year for Mr. Solih, who has been skeptical of China’s influence, as good news for India’s interests. 

On Sunday, a news article in the Economic Times, an Indian newspaper, described the M.D.P.’s parliamentary rout as a “shot in arm” for New Delhi in its “neighborhood.”
Preliminary results from Saturday’s vote showed that the Maldivian Democratic Party, which Mr. Solih leads, was on track to win more than two-thirds of the 87 seats in the country’s parliament, the local news media reported on Sunday. 

The M.D.P. needs just 44 seats to become the first-ever party to secure a parliamentary majority since the Maldives held its first free election in 2008.
Other parties won fewer than seven seats each on Saturday, the Maldives Independent, a local news site, reported.
Past elections in the Maldives have been marred by accusations of widespread irregularities. 

Mr. Yameen was accused of rigging last year’s presidential elections by forcing employees of state-owned companies to vote for his party, stacking the election commission with loyalists, locking up opposition leaders and canceling voter registrations.
But Transparency Maldives, an election watchdog, said in a statement on Sunday that the previous day’s vote had been “transparent and generally well-administered.”
Mr. Solih said in a statement over the weekend that the country’s people were the election’s “biggest winners.”
“That our campaign was issue-oriented and not based on hatred and narrow divisions is a win for our young democracy,” he said. 

“That our government did not hinder those candidates with whom we did not agree is a big win for the country.”
The Maldives made international headlines last winter when Yameen, the president at the time, set off a political crisis by declaring a state of emergency and sending troops to surround the Supreme Court. The move came the week after the court overturned criminal convictions against nine of Yameen’s opponents.
One of them was a former president, Mohamed Nasheed, a member of the M.D.P. who was then living in exile in London. 

Mr. Nasheed, who returned to the Maldives in late 2018, was ineligible to run in the September election because he had been sentenced to prison under the Yameen government.
Mr. Solih ran for president in Mr. Nasheed’s place.
On the campaign trail last year, Mr. Solih pledged to restore democratic freedoms if he won, including rolling back an anti-defamation law that Yameen had introduced as a tool for locking up opponents.
The anti-defamation act was repealed two months later. 

But Mr. Solih’s party, the M.D.P., has struggled in recent months to carry out other parts of its agenda.
For example, even though Mr. Solih has promised to investigate the 2014 disappearance of Ahmed Rilwan Abdulla, a prominent journalist critical of Yameen, a party in the M.D.P.’s governing coalition refused in February to call a vote on a bill about recovering stolen assets and investigating unresolved murders.
Yameen, the former strongman president, was recently imprisoned over a graft scandal involving the country’s tourism board. 

He denies the accusations and was released on bail in late March, days before the parliamentary elections.

Chinese Peril

Freeing China's South Asian string of 'little pearls'
By Michael Bender


The annual G20 Summit reminded us that disregarded countries also can be opportunities. 

As the escalating U.S. trade war with Communist China dominates attention, smaller countries that Americans don’t think much about are suddenly important pieces of the Chinese chessboard. 

They offer an important lesson in the perils of our dismissive strategic engagement, but also an opportunity to challenge China’s growing national security hegemony while not harming America’s consumers and economy.
China has what it calls a “String of Pearls” strategy to dominate small countries in Southeast and South Asia — a maritime Silk Road along the world’s most vital maritime route that the U.S. Navy and its allies will be hard-pressed to counter. 

Stretching from the South China Seas to the Horn of Africa, the route is linked with deep-water “commercial” ports and bases — the so-called pearls — and with them China will tighten its string of control in the Indian and Pacific oceans.
China’s island-building and outright appropriation of islands in the South China Sea — and America’s seemingly too-little, too-late opposition — is well-known. 

But it is the Maldives and Sri Lanka, the largely ignored but critically significant “Little Pearls” of South Asia, that still offer hope.
In recent years, China has pumped resources into the diminutive island nation of the Maldives. 

It established a Joint Ocean Observation Station on the Mukunudhoo atoll near a crucial shipping route close to India. 

This follows China’s previous acquisition of 17 other islands in the same area, raising concerns that the real and unstated purpose is for naval dominance. 

Last March, shortly after announcing the JOOS initiative, Beijing sent a combat naval force there to reassure the pro-China Maldivian president during a declared state-of-emergency.
Meanwhile, China’s huge infrastructure “investments” have driven Maldives into an unpayable debt equal to more than 25% of the archipelago’s GDP.
To the opposite side of India’s southern tip, Sri Lanka is becoming a more important “Little Pearl” on China’s string. 

The George W. Bush administration halted U.S. aid to Sri Lanka in 2007, leaving Communist China to jump in and fill the vacuum. 

Since then, the state-owned China Communication Construction Company (CCCC) funded a multibillion-dollar “Port City” project in the port city capital of Colombo, with over $13 billion expected to be invested in this project over the next 20 years. 

Beijing is poised to monopolize the financial and development market of the benign but geo-strategically important island nation.
Meanwhile, China is building a billion-dollar deep water complex called Hambantota Port on the south of Sri Lanka, about 10 nautical miles from the main shipping route between Asia and Europe. The port project gives the Chinese primary operational control of the port for the next 99 years. 

Smaller deals, such as the $50 million to be paid to a state-run Chinese company to augment the state-run Jaya Container Terminal, are also completed fairly regularly and continue to add to financial leverage that the Chinese are accumulating over Sri Lanka.
With Sri Lanka’s debt, much of it to China, continuing to balloon out of control, Beijing has seized on this as an opportunity to gain further control of Sri Lanka’s financial future through its manipulative loan collection practices and by controlling of some of the country’s most significant commercial facilities, and capturing Sri Lanka in an $8 billion debt-trap.
Making matters worse is Sri Lanka’s ongoing constitutional crisis that has paralyzed the country politically for several months — and promises to continue to do so for another year. 

The Chinese have taken advantage of the crisis, squeezing Sri Lank for more and more development deals.
Sri Lanka’s political leadership is paralyzed. 

In late October, President Maithripala Sirisena sacked his prime minister and appointed his arch-rival Mahinda Rajapaksa, the still-popular former president, in his place. 

This rare moment of realpolitik and unity in Sri Lanka was short-loved, however, because the incumbent prime minister refuses to step aside. 

Now the Supreme Court of the nation is seemingly overburdened with being the sole entity responsible for solving the constitutional stand-off and re-instating a functional government.
Without effective leadership, Sri Lanka will continue to drift into the hands of the Chinese — which the obdurate former prime minister seemingly welcomes. 

Only a snap election, such as a plebiscite, can break the stalemate and empower the Sri Lankan people to pick their own prime minister — and to break Chinese Communist economic, military, and political domination of their country.
The growth of China’s commercial investment and soft power in South Asia’s “Little Pearls” bring Beijing closer to achieving their global ambitions. 

They also erode democratic values and processes in nations like the Maldives and Sri Lanka, whose democracies have begun to crumble under the weight of burgeoning debt and influence from the power-driven, Communist hegemon.
The G20 summit is an opportunity to highlight these troubling facts. 

The Trump Administration must not only expose Beijing’s economically disastrous developmental schemes as the manipulative power grabs that they really are. 

It must also actively engage the vulnerable small nations targeted in China’s String of Pearls. 

In doing so, the United States can strike at China’s mercantile and military hegemony while gaining much-needed leverage over the Red Tiger’s other economic and fiscal bullying, and help to free vulnerable countries like Sri Lanka and the Maldives from indenture. 

It’s time to free China’s “Little Pearls.”

China almost has Australia surrounded. But its debt-trap diplomacy has been exposed

Beijing’s island-grabbing campaign is getting close to home. It’s muscling in on tiny nations from the Indian to the Pacific Oceans.
By Jamie Seidel

CHINA’s island-grabbing campaign is getting close to home. 

It’s muscling in on tiny nations from the Indian to the Pacific Oceans. 

But Australia’s begun pushing back.
Ceylon. Savo Island. Coral Sea. Guadalcanal. Gilbert and Marshall Islands. Tarawa. Truk. Guam.
These were names plucked from obscurity by bloody battles against Japan during World War II. 

They were battles fought because these seemingly insignificant islands — some little more than coral atolls and volcanic outcrops — are important. 

They are remote outposts, rare landfalls in vast oceans. 

They sit astride shipping lanes that carry the lifeblood of South-East Asia’s and Oceania’s economies.
Those controlling these specks on the map potentially have an impact on world affairs seemingly out of all proportion.
Not since the darkest days of World War II has Australia begun to feel the pressure of isolation and constraint. 

Germany did little more than harass our shipping in the Indian Ocean, carrying troops and equipment to the Middle East and vital resources in return. 

But Japan’s overwhelming raids on Darwin and Ceylon (Sri Lanka) in 1942 brutally demonstrated just how vulnerable we were. 

And once the Pacific Islands began to fall, the links between Australia and the United States began to look tenuous as well.

A snapshot of shipping flowing to and from Australia, and through the region, from www.shipmap.org.

That encirclement of Australia was with steel ships, aluminium aircraft and the blood and sweat of tens of thousands of troops.
It’s an encirclement some analysts fear we are experiencing again.
But in place of warships and tanks, China is steamrolling across our region with promises of grand works of infrastructure — and weaponised loans.
Debt-trap diplomacy is behind a new land grab. 

It’s the lure of loans pushed on poor countries that cannot afford to repay them.
Now new regional names are registering on Australia’s radar as they teeter and fall.
Male. Manus. Luganville. Wewak.
China has showered small nations such as Vanuatu, Tonga and the Solomon Islands with concessional loans. 

The Lowy Institute think-tank estimates Beijing pushed more than $2.3 billion into to the region between 2006 and 2016.
The fates of these far-flung places could be a bellwether of our own.

The new runway of Velana International Airport in Male, Maldives. 

ISLANDS IN CHAINS
Last week, the scattering of tiny islands that is the Maldives Archipelago in the Indian Ocean opened an enormous new runway.
Velana International Airport is on the island of Male. 

The broad new airstrip was built on land reclaimed from the sea by a Chinese state-backed company, using money from … Beijing.
It followed close on the heels of another controversial Maldives-China project.
“The nation celebrated the opening of the China-Maldives Friendship Bridge, hailed as the project of the century in the small Indian Ocean nation and a hallmark project of the China-proposed Belt and Road initiative (BRI),” the state-run Global Times reported in August.
“Although some said the Maldivian government will bear a heavy debt from the massive infrastructure co-operation with China, Maldivian officials said they appreciate China’s generosity.”
It was a pointed — if unconvincing — rebuttal of the ‘debt-trap’ narrative.
But Beijing is already in a position in the tiny strife-torn nation to seize both as collateral — and turn them towards military purposes.
Then there’s Manus.

The military base established on Manus Island during World War II has suddenly become of interest to both Beijing and Canberra. 

Once part of the British Admiralty Islands, it was seized from the Japanese by the United States for use as a major World War II naval staging post.
Now part of Papua New Guinea, it has once again returned to the world’s stage.
China has been showing interest.
Having airfield and port facilities there could boost its ‘Island Chain’ ambitions, and establish a prickly thorn between Australia and US facilities on the island of Guam.
But Australia has begun pushing back.
“The Pacific is a very high-priority area of strategic national security interest for Australia,” Prime Minister Scott Morrison said, refusing to confirm or deny reports Australian defence officials had visited the Lombrum Naval Base on Manus to assess its potential for expansion.
Details of any future jointly-operated, upgraded facility there will not be revealed before the Asia-Pacific Economic Cooperation summit in Port Moresby in November.
The Maldives and Manus are just the most recent in a rapid-pace series of international power plays in the Indian and Pacific Oceans.
Relations between Canberra and Beijing plunged to a new low earlier this year after we criticised China’s ‘debt-trap diplomacy’ and undue influence in the politics of countries throughout the region — including our own.
Beijing lashed back, using its state-run media to label Australia as an “arrogant overlord”.

Chinese dictator Xi Jinping looks on during bilateral talks at the Maldives President’s Office in the capital island Male, where he sought backing for a “21st century maritime silk road”. 

WAKING DRAGON
It’s about Xi Jinping’s grand vision.
He sees China’s influence extending far beyond its own borders.
In 2013, he detailed his grand scheme to revitalise the ancient Silk Road and sea spice routes.
It would ‘restore’ China’s position at the centre of a trade hub extending to Europe and Africa.
The Belt and Road Initiative — as it has become known — demands a networks of ports, airfields, roads and railways spanning the globe.
Chinese state-owned companies now control about 76 ports in 35 countries — including Darwin. 

And while Beijing openly insists it only wants to use these ports for commercial purposes, its warships and submarines have already been seen docked in several.
Now Xi wants another ‘Silk Road’ — this time extending into the Pacific.
Ministers from Tonga, Samoa, Vanuatu and Fiji were among those invited to Beijing in 2017 for the launch of the Belt and Road project. 

They were offered access to $55 billion in loans.
This sparked alarm in Australia, the US and Europe.
Beijing’s loans do not come cheap.
“Such indebtedness gives China significant leverage over Pacific Island countries and may see China place pressure on Pacific nations to convert loans into equity in infrastructure,” the Lowy Institute’s recent Safeguarding Australia’s Security Interests report warns.
“It’s not ‘win-win’ for China and the recipient, but simply ‘win’ for China, which not only gets access to local resources and new markets, and forward presence, but can coerce the recipient state to pay a ‘tribute’ to Beijing by ceding local assets when it can’t pay back its debts,” the Australian Strategic Policy Institute’s Dr Malcolm Davis notes.

Hambantota Port in Sri Lanka is an example of Beijing’s debt-trap diplomacy. China has won a 99-year-lease on the facility, and a 70pc controlling stake in its management.
An editorial published by the state-run Global Times says South Pacific nations had been ‘bewitched’ by Western countries including Australia and the US “who sought to gain political leverage in the region”.
“Unlike Western aid, which always comes with political and economic conditions, Chinese aid has been widely welcomed by South Pacific nations as it has no political conditions,” it quoted research fellow in Australian Studies Yu Lei as saying.
But China does not openly declare its international aid projects in the same way other nations such as Australia does. 

This has raised a degree of anxiety about exactly how much it is spending, where — and why.
Now, China’s taking a leaf out of the US playbook.
It wants strong military facilities spaced around its ‘sphere of influence’.
It calls that sphere the Second Island Chain — a rough line from Japan in the north to Papua New Guinea in the south.
But as Beijing’s dominance over the First Island Chain (including Taiwan, the Spratlys, and Paracels) of the South China Sea seems all but complete, a ‘Third Island Chain’ appears to be emerging — extending from the Maldives in the west to Fiji in the east.
“The most troubling implication for Australian interests is that a future naval or air base in Vanuatu would give China a foothold for operations to coerce Australia, outflank the US and its base on US territory at Guam, and collect intelligence in a regional security crisis,” Rory Medcalf, the head of the National Security College at the Australian National University, wrote in a recent Lowy Institute report.
It’s a similar story for the Maldives, potentially cutting Australia’s fuel supplies and trade links to Singapore, India and Europe.

United States, Indian and Japanese warships exercise together. Concern at Beijing’s expansive ambitions have drawn regional powers together. 
GAME OF THRONES
China’s rapid expansion has not gone unnoticed.
In a speech to Australia’s Parliament in 2011, then US President Barack Obama announced a ‘pivot’ back to the Asia-Pacific. 

Existing military facilities would be reinforced and strengthened. 

Forces would be based in Darwin.
It wasn’t all about troops.
Fresh efforts would be made on the diplomatic and economic fronts. 

Chief among these was the proposed (now abandoned) Trans-Pacific Partnership (TPP).
“This allowed Washington to counter Beijing’s concerns that the pivot was primarily a military move aimed at containing a rising China,” the Lowy Institute says. 

“However, the decision by the Trump administration to abandon the TPP has given US strategy in the Indo-Pacific more of a military character.”
President Trump’s attitude towards international agreements and treaties has unsettled South-East Asia. 

Will he be true to his nation’s word? 

Or would he pull the US out?
It’s a question that has prompted the region to look to strengthen its own relationships.
Generally, the Melanesian states have been seen as Australia’s area of responsibility while the US and New Zealand watch over the Polynesian islands.
In recent decades, that influence has weakened.
“Being the dominant traditional power has not always made Canberra popular in Pacific Island nations, despite being the region’s largest provider of aid,” the Lowy Institute notes. 

“However, failing to forge stronger regional partnerships now, in the hope that the current geostrategic dynamics will not change, contains significant risk.”
Things haven’t been getting better.

Australia has been ‘showing the flag’ in the Indo-Pacific, sending its new helicopter carrying assault ships on visits as a demonstration of its military — and disaster relief — capacity. 

The Pacific Islands have repeatedly expressed dismay at the deep state of denial Australian and US politicians are in over the looming global warming crisis.
After all, their low-lying islands are already falling victim to rising sea levels.
President Trump’s withdrawal from the Paris Agreement earlier this year was called “pretty selfish” by the former president of Kiribati. 

The Prime Minister of Tuvalu went further: “I think this is a very destructive, obstructive statement from a leader of perhaps the biggest polluter on earth and we are very disappointed as a small island country already suffering the effects of climate change.”
China, at least, pays lip-service to the international threat.
So, with this issue at least, it has stolen the moral upper ground.
And then there are the promises of Xi Jinping.
He’s been touting his ‘Chinese model’ as a “new option for other countries who want to speed up their development while preserving their independence.”
But his real purpose, says Dr Davis, is more ominous.
“Chinese ambitions don’t end at the reunification of Taiwan and China on Beijing’s terms or control of the South China Sea. China is clearly emerging as a hegemonic power, exploiting both soft-power inducements and hard-power threats to reassert itself as a new Middle Kingdom, and overturning what it sees to be a century of humiliation. Part of the ‘China Dream’ is ensuring that its periphery is secure through a belt of vassal states that accede to Beijing’s interests.”

A Chinese H6K takes off into a golden dawn. Beijing has been proudly boasting of its position as a new world power. 

DRAGONS AT THE GATES
The US Pentagon is alert — and alarmed.
“China is using its economic penalties, influence operations, and implied military threats to persuade other states to heed its political and security agenda,” the US National Security Strategy of December 2017 reads. 

“Chinese dominance risks diminishing the sovereignty of many states in the Indo-Pacific region”.
That includes Australia.
Beijing has been doing all it can to expand its status as a maritime power. 

It now has 43 attack submarines at its disposal — that’s more than the United States. 

It’s also been launching surface ships at an unprecedented rate, some 24 new destroyers and 31 new frigates since 2000 alone.
While formidable, it’s not likely to rival the US for another 20 years.
But it will be powerful enough to project significant power wherever it desires.
“China’s confidence on the international stage has been bolstered by its perceived successes in the South China Sea where it has occupied, and physically enhanced, a series of uninhabited reefs,” the Lowy Institute report warns.
Now China is pursuing a military and diplomatic strategy which “seeks Indo-Pacific regional hegemony in the near-term and displacement of the United States to achieve global pre-eminence in the future”, the US National Defense Strategy of 2018 states.
China’s actions are “undermining the international order from within the system by exploiting its benefits while simultaneously undercutting its principles.”

F-35B Lightning IIs with US Marine Fighter Attack Squadron 211 fly over Wake Island, one of a series of military bases retained after World War II. China wants its own ‘buffer zone’ of islands in the Pacific and Indian Ocean to protect its interests. 

And that brings it head-to-head with the US along the ‘Second Island Chain’.
At its heart is the island of Guam. 

It is a US territory and major defence facility.
The free compact states of Palau, the Marshall Islands and the Federated States of Micronesia all operate under a post-war agreement with the US, allowing a base on the Marshall Islands and the veto over any military access by any other nation. 

From the outset, this was intended to provide the US with a Pacific ‘buffer zone’ between itself and Asia.
Now China wants a ‘buffer zone’ between itself and the US.
At the bottom of the ‘Second Island Chain’ is Papua New Guinea, and the island of Manus.
Australia’s moves to thwart Beijing’s ‘Belt and Road’ projects are a sign of growing ‘push-back’ from the West.
But Beijing is determined — and persistent.
“Powerful drivers are converging in a way that is reshaping the international order and challenging Australia’s interests. The United States has been the dominant power in our region throughout Australia’s post-second world history. China is challenging America’s position,” Australia’s 2017 Foreign Policy White Paper reads.

The Royal Australian Navy Anzac Class Frigate HMAS Stuart is observed through periscope on board the RAN Collins Class Submarine HMAS Sheean. While isolated, Australia is highly dependent on its shipping lanes to the northeast and northwest. 

LOOK TO YOUR MOAT
The 2016 Defence White Paper made the situation pretty clear: “Australia cannot be secure if our immediate neighbourhood including Papua New Guinea, Timor-Leste and Pacific Island Countries becomes a source of threat to Australia. This includes the threat of a foreign military power seeking influence in ways that could challenge the security of our maritime approaches or transnational crime targeting Australian interests …”
Three of Australia’s five main maritime trade routes pass through the Pacific. 

The two largest are in the Indian Ocean.
Our trade with the US passes near New Caledonia and Fiji. 

Those to and from Japan, Taiwan — and China — largely go past New Britain and Papua New Guinea, or through the Solomon Islands, Bougainville and New Britain.
In the west, our trade funnels past Sri Lanka, the Maldives and Indonesia.
If there is trouble in the Pacific, trade will have to divert through the Torres Strait to Indonesia’s Suda and Lombok Straits.
If there is trouble in the Indian Ocean, exports from Western Australia — such as gas and iron ore — would have to take a long detour through the Tasman Sea.

HMAS Adelaide berthed at the Port of Suva in June. 

“Australia’s reliance on maritime trade with and through South East Asia, including energy supplies, means the security of our maritime approaches and trade routes within South East Asia must be protected, as must freedom of navigation, which provides for the free flow of maritime trade in international waters,” the Defence White Paper notes.
“The Government will work with Pacific Island Countries to strengthen their ability to manage internal, transnational and border security challenges … This includes working to limit the influence of any actor from outside the region with interests inimical to our own.”
Australia is gifting 19 new patrol boats to 12 Pacific Island Nations. 

The project, which includes maintenance and support and costs $2 billion over 30 years, has seen the first boats delivered this year. 

They are part of a co-ordinated project including RAAF surveillance and visits by RAN warships.
The Solomon Islands has recently signed a security treaty with Australia. 

Security partnership understandings have been negotiated with Tuvalu and Nauru. 

Kiribati is in talks.
Australia has also been showing the flag.
One of our new helicopter-carrying assault ships, HMS Adelaide, joined three other warships on a 13 week Indo-Pacific Endeavour exercise.
Just in case our Pacific partners had forgotten.
Restoring Australia’s place in its region will take considerably more effort, the Lowy Institute warns. We must offer government services, access to labour markets, and assist with defence “in return for an undertaking that foreign military forces or installations would not be allowed in these countries. This would mitigate the risk of China gaining access to dual-use facilities in these nations in return for debt reduction, while safeguarding the sovereignty of these independent nations.”

A Chinese H6K strategic bomber flies over disputed coral reefs in the South China Sea. Beijing is looking for similar island bases in the Indian and Pacific Oceans. 

ISLAND CHESSBOARD
PACIFIC OCEAN
While not having ‘traditional’ trade links to justify its interest in the region, China has aggressively stepped forward with the promise of cheap loans into a region somewhat disillusioned by Australia and the US.

1. FIJI: After a 2006 military coup, Australia — among others — imposed sanctions on Fiji until it returned to democratic rule. China places no value in such systems of government. So it stepped in, offering loans for infrastructure projects built by Chinese labourers. While not entirely welcomed by the populace, it gave Beijing powerful influence among Fiji’s leaders.
2. PAPUA NEW GUINEA: Its military officers have also been invited to China to attend training courses.
3. SAMOA: Beijing is increasingly pressuring this island nation to repay its debts. Like many others.
4. SOLOMON ISLANDS: Earlier this year, Prime Minister Turnbull promised the Solomons (and Papua New Guinea) that Australia would pay for a new undersea internet cable in order to brush aside the state-controlled Chinese telco giant Huawei, as well as relieve the island nations of the financial burden.
5. TONGA: In 2013, 64 per cent of Tonga’s foreign debt was owed to China. That amounted to 43 per cent of its annual GDP. Previously, Tonga has said it may have to seek a write-off of this burden by allowing Beijing to establish a naval base on the island.
6. VANUATU: Vanuatu owes Beijing some $US1.7 billion. Earlier this year, reports that China was seeking a ‘permanent military presence’ on the island sparked dismay in Australia. Both Vanuatu and China denied any such proposal had been made. But Prime Minister Turnbull sounded unconvinced: “We would view with great concern the establishment of any foreign military bases in those Pacific island countries and neighbours of ours,” he said. The country’s newly built $85 million Luganville wharf, which was funded by China and seems more suited to navy vessels than cruise ships.

INDIAN OCEAN
Beijing is already well advanced in its moves to establish a network of naval and air bases in the Indian Ocean. 

The number of ships and submarines it has stationed there has been steadily growing. 

But China needs more. 

Chief on its shopping list are major airfields capable of supporting its long-range reconnaissance aircraft and bombers. 

It also needs submarine support facilities and logistics infrastructure extending from the northeastern Indian Ocean to the west.

1. DJIBOUTI: In 2017, Beijing opened its first overseas military facility. This is in Djibouti on the shores of the troubled Red Sea. It’s already been openly tussling with a neighbouring US facility, allegedly blinding its pilots with lasers.
2. MALDIVES: This archipelago in the central Indian Ocean underwent a coup earlier this year, installing Abdulla Yameen -- who has been implicated in several corruption scandals and is seen as a close friend of Beijing -- as president. But elections this week has seen him deposed. How the Maldives will pay for a major Chinese-funded and built airstrip, and an equally ambitious bridge project, is yet to be seen. And there’s an abandoned British naval facility ripe for the pickings on the island of Gan.
3. MYANMAR: A naval base on the Indian Ocean side of the chokepoint Malacca Strait would give China the ability to project power across the region and the Bay of Bengal. Beijing has built a new port at Kyaukpyu — and taken a 70 per cent controlling stake in it after Myanmar defaulted on repayments.
4. PAKISTAN: China is in advanced talks with Pakistan to build a base on the Arabian Sea, near the city of Gwadar.
5. SRI LANKA: An inability to repay $6 billion in debt to China has already given Beijing a windfall in Sri Lanka. A controlling 70 per cent stake, along with a 99-year-lease, in the port of Hambantota has been given to a state-run Chinese company in an effort to pay-down the burden. This port sits close to the major Indian Ocean sea lanes.
6. THAILAND: China is pushing Thailand for the construction of a 100km canal on the scale of Panama, linking the South China Sea with the Bay of Bengal and bypassing the crowded Strait of Malacca. India fears the economically unviable Kra Canal will quickly fall under the control of Beijing, dramatically improving its ability to influence the balance of power in the Indian Ocean. Thailand, under pressure from all sides, is yet to accept — or reject — the project.

Who is at risk from China’s Belt and Road Initiative debt trap?

China’s Belt and Road Initiative (BRI) is raising the risk of a sovereign debt default among small and poor countries
By Nikita Kwatra

China BRI will potentially span 68 countries and could have implications for each of these countries’ public debt.

Mumbai -- China’s Belt and Road Initiative (BRI) which seeks to invest about $8 trillion in infrastructure projects across Asia, Europe and Africa, has come under intense scrutiny, not least due to suspicions over China’s intent behind the ambitious project. 

A study by the Centre for Global Development, a Washington-based think tank, analyses one important consequence of BRI: debt.
While the study finds that it is unlikely that the BRI will be plagued with wide-scale debt sustainability problems, it is likely to raise the risk of a sovereign debt default among relatively small and poor countries.
The BRI will potentially span 68 countries and could have implications for each of these countries’ public debt. 

To understand these effects, the study first uses sovereign credit risk ratings and World Bank debt sustainability analysis to identify 23 of the 68 countries currently at risk of debt distress. 

For these 23 countries, the study adds the Belt and Road Initiative lending pipeline into the countries’ overall debt and debt to China as of end of 2016.
They find that eight countries could face difficulties in servicing their debt because of the Belt and Road Initiative. 

These include Pakistan, Djibouti, the Maldives, Laos, Mongolia, Montenegro, Tajikistan and Kyrgyzstan. 

Pakistan, which through the China-Pakistan Economic Corridor, serves as the centrepiece of the BRI and is by far the largest country exposed, with China reportedly financing about 80% of its estimated $62 billion debt. 

According to the think-tank, China’s case-by-case approach in dealing with debt relief in the past could prove “problematic”.
One example is China’s acquisition of Sri Lanka’s Hambantota port after the Sri Lankan government failed to service its debt.
Unlike most of the world’s other major creditors, China is not bound to a set of rules on how it addresses debtor repayment problems. 

Currently, China is only an ad hoc participant of the Paris Club, a collection of creditor nations which follow a set of rules in dealing with debtor nations. 

The think-tank advocates applying globally-accepted creditor disciplines and standards to the Belt and Road Initiative.
To do this, they recommend the World Bank and other multilateral banks work with the Chinese government to set the lending standards for the BRI projects.
Another recommendation is to establish a new creditor’s group which would maintain the core principles of the Paris Club.
To mitigate lending risks, China is also recommended to provide technical and legal support to developing countries. 

Finally, the think tank proposes that China should offer debt swap arrangements in support of environmental goals where borrowing country debt is forgiven in exchange for a commitment to an environmental objective, for instance, forest preservation.

China's debt traps

China's Silk Road project runs into debt jam
By Julien Girault
China's dictator Xi Jinping says trade with Belt and Road countries has exceeded $5 trillion

China's massive and expanding "Belt and Road" trade infrastructure project is running into speed bumps as some countries begin to grumble about being buried under Chinese debt.
First announced in 2013 by Xi Jinping, the initiative also known as the "new Silk Road" envisions the construction of railways, roads and ports across the globe, with Beijing providing billions of dollars in loans to many countries.
Five years on, Xi has found himself defending his treasured idea as concerns grow that China is setting up debt traps in countries which lack the means to pay back the Asian giant.
"It is not a China club," Xi said in a speech on Monday to mark the project's anniversary, describing Belt and Road as an "open and inclusive" project.
Xi said China's trade with Belt and Road countries had exceeded $5 trillion, with outward direct investment surpassing $60 billion.
But some are starting to wonder if it is worth the cost.
During a visit to Beijing in August, Malaysia's Prime Minister Mahathir Mohamad said his country would shelve three China-backed projects, including a $20 billion railway.
The party of Pakistan's new prime minister, Imran Khan, has vowed more transparency amid fears about the country's ability to repay Chinese loans related to the multi-billion-dollar China-Pakistan Economic Corridor.
China's "new Silk Road" envisions the construction of railways, roads and ports across the globe

Meanwhile the exiled leader of the opposition in the Maldives, Mohamed Nasheed, has said China's actions in the Indian Ocean archipelago amounted to a "land grab" and "colonialism", with 80 percent of its debt held by Beijing.
Sri Lanka has already paid a heavy price for being highly indebted to China.
Last year, the island nation had to grant a 99-year lease on a strategic port to Beijing over its inability to repay loans for the $1.4-billion project.

Ambiguous partner
"China does not have a very competent international bureaucracy in foreign aid, in expansion of soft power," Anne Stevenson-Yang, co-founder and research director at J Capital Research, told AFP.
"So not surprisingly they're not very good at it, and it brought up political issues like Malaysia that nobody anticipated," she said.
"As the RMB (yuan) becomes weaker, and China is perceived internationally as a more ambiguous partner, it's more likely that the countries will take a more jaundiced eye on these projects."
The huge endeavour brings much-needed infrastructure improvements to developing countries, while giving China destinations to unload its industrial overcapacity and facilities to stock up on raw materials.
Chinese dictator Xi Jinping (C) says the initiative is 'not a China club'

But a study by the Center for Global Development, a US think-tank, found serious concerns about the sustainability of the sovereign debt in eight countries receiving Silk Road funds.
Those were Pakistan, Djibouti, Maldives, Mongolia, Laos, Montenegro, Tajikistan and Kyrgyzstan.
The cost of a China-Laos railway project—$6.7 billion—represents almost half of the Southeast Asian country's GDP, according to the study.
In Djibouti, the IMF has warned that the Horn of Africa country faces a "high risk of debt distress" as its public debt jumped from 50 percent of GDP in 2014 to 85 percent in 2016.
Africa has long embraced Chinese investment, helping make Beijing the continent's largest trading partner for the past decade.
On Monday, a number of African leaders will gather in Beijing for a summit focused on economic ties which will include talks on the "Belt and Road" programme.

'Not a free lunch'
China bristles at criticism.
Sri Lanka has already paid a heavy price for being highly indebted to China

At a daily press briefing on Friday, foreign ministry spokeswoman Hua Chunying denied that Beijing was saddling its partners with onerous debt, saying that its loans to Sri Lanka and Pakistan were only a small part of those countries' overall foreign debt.
Stevenson-Yang said China's loans are quoted in dollar terms, "but in reality they're lending in terms of tractors, shipments of coal, engineering services and things like that, and they ask for repayment in hard currency."
Standard & Poor's said Beijing structures the infrastructure projects as long-term concessions, with a Chinese firm operating the facility for a period of 20 to 30 years while splitting the proceeds with the local counterpart or government.
The head of the International Monetary Fund, Christine Lagarde, raised concerns about potential debt problems in April and advocated greater transparency.
"It's not a free lunch, it's something where everybody chips in," she said.

China Encroaches on India’s Sphere of Influence

An autocrat in the Maldives tests New Delhi’s resolve.
By Sadanand Dhume

Maldivian police stand guard near the opposition party’s headquarters in Male after President Abdulla Yameen declared a state of emergency, Feb. 6. 

Is India still top dog in its neighborhood? 

This is the question raised by a political crisis in the Maldives, an Indian Ocean island chain known for its luxury beach resorts. 

Unless New Delhi swiftly restores democracy, it risks looking ineffectual in the face of Chinese inroads into India’s traditional zone of influence.
The crisis began earlier this month, when President Abdulla Yameen’s government declared a state of emergency and arrested two Supreme Court judges as well as a long-serving former president who is Mr. Yameen’s half-brother. 

The arrests followed a Supreme Court ruling that declared the terrorism conviction of exiled former President Mohamed Nasheed unconstitutional and ordered the release of eight other jailed opposition lawmakers.
Major democracies reacted to Mr. Yameen’s actions with dismay. 

The State Department said the U.S. was “troubled and disappointed” by the declaration of emergency. India’s Foreign Ministry announced that New Delhi was “disturbed.” 

The United Kingdom, from which the Maldives gained independence in 1965, said it was “gravely concerned.”
By contrast, China urged the international community to “play a constructive role on the basis of respecting the sovereignty of the Maldives.” 

Translation: Mr. Yameen should be allowed to snuff out constitutional checks without fear of foreign intervention. 

The People’s Liberation Army reinforced this message last week by posting on social media photos of training exercises in the Indian Ocean.
The Maldives has a population of 400,000 people, about as many as Staten Island, N.Y., or the south Mumbai neighborhood of Byculla. 

The country has come to symbolize a broader tussle between the world’s two most populous nations, China and India. 

For India it represents a stark challenge: Beijing’s growing influence in countries where New Delhi has traditionally loomed large.
In Nepal, K.P. Oli, a veteran communist leader with links to China, took over as prime minister last week. 

In Bangladesh, China has rolled out $24 billion in loans, mostly for infrastructure projects, dwarfing India’s more modest forays into checkbook diplomacy.
In the tiny Himalayan kingdom of Bhutan, arguably India’s closest ally, Beijing is lobbying to establish full diplomatic relations. 

Last year Indian and Chinese troops were involved in a 10-week standoff on territory claimed by both Bhutan and China, and regarded by India as strategically vital. 

It ended when the Chinese agreed to halt construction of a road to which India objected, and both countries pulled back troops.
Nowhere in the region is China’s dramatically enlarged presence more visible than in Sri Lanka, the teardrop-shaped island that dangles off the southern tip of India. 

In Colombo, hulking cranes rise above a $1.4 billion port expansion and new commercial and residential development built by a Chinese firm on reclaimed land. 

Company officials say the development could turn Colombo into a commercial hub midway between the thriving entrepôts of Singapore and Dubai.
A 45-minute helicopter ride south of Colombo—over dense forests, manicured tea plantations, herds of wild elephants, and $2,000-a-night resorts—is China’s most controversial project in the region. 

In the sleepy town of Hambantota, China has built an airport with an 11,500-foot runway capable of landing an Airbus A380, as well as a modern seaport able to dock oil tankers. 

Both are largely unused.
Unable to pay back the money it borrowed to build the port, last year Sri Lanka handed it to China on a 99-year-lease. 

Both the Colombo Port project and Hambantota are part of China’s ambitious One Belt, One Road initiative.
In an interview in Colombo earlier this month, Sri Lankan Prime Minister Ranil Wickremesinghe flatly stated that his country will not allow the Chinese to use the port for military purposes. 

But U.S. and Indian officials say that is a possibility.
This regional backdrop raises the stakes for India in the Maldives. 

Should Mr. Yameen continue to flout the Supreme Court order, it will send a signal across the region and beyond that even the smallest nations can, with China’s backing, thumb their noses at New Delhi without consequence.
In a phone interview from Colombo, former Maldivian President Nasheed says he’s concerned that expensive Chinese infrastructure projects amount to a potential “land grab” that is “hollowing out” his country’s sovereignty. 

He also worries that under Mr. Yameen the Maldives has allowed Islamic State to make inroads into the Muslim-majority country.
Mr. Nasheed stops short of explicitly calling for an Indian military intervention to restore democracy. (Thirty years ago, India sent troops to ward off mercenaries who attempted to depose the then-president.) 

Nonetheless, when asked what New Delhi should do to ensure Mr. Yameen respects the Supreme Court decision that sparked the current crisis, he leaves ajar the door to intervention: “How they impress this upon him, I’m sure countries have the imagination and the tools to do that.”

The former president may have to pick his words carefully, but for India the choice is clear. 

If it wants to retain credibility as South Asia’s leading power, it cannot allow the Maldives to turn into an authoritarian Chinese vassal. 

This means keeping all options on the table, including using military force if necessary.

Han Peril: China ensnares vulnerable states in a debt trap

Cheap credits are used to secure influence and grab control of strategic assets
By Brahma Chellaney
A ship departs a port in Zhanjiang, China, in July for Africa's Djibouti to dispatch members of the People's Liberation Army to man a military base there.

"There are two ways to conquer and enslave a country," American statesman John Adams (U.S. president from 1797 to 1801) famously said. 

"One is by the sword. The other is by debt."
China has chosen the second path.  

Aggressively employing economic tools to advance its strategic interests, Beijing has extended huge loans to financially weak states and ensnared some in debt traps that greatly strengthen its leverage.
After establishing a growing presence in the South China Sea, Beijing seems increasingly determined to extend its influence in the Indian Ocean, not least in countries surrounding India, its regional strategic rival.
From Djibouti in Africa to the Indian Ocean island of Sri Lanka, China has converted big credits into political influence and even a military presence.
Now a political crisis in the Maldives has highlighted the fact that China has quietly acquired several islets in the heavily indebted Indian Ocean archipelago.
Mohamed Nasheed, the nation's first and only democratically elected president who was ousted at gunpoint, says the country cannot repay the $1.5bn-$2bn it owes China, equivalent to 80% of the total foreign debt. 

"Without firing a single shot, China has grabbed more land" in the Maldives than what Britain's "East India Company did at the height of the 19th century."
Among the unpopulated Maldivian islands China has acquired on lease are Feydhoo Finolhu, lying close to the capital Male and previously used for police training, and the 7km-long Kalhufahalufushi, with a magnificent reef. 

For Feydhoo Finolhu, it paid $4 million, which is what a luxury apartment in Hong Kong sells for; Kalhufahalufushi was even cheaper.
China is the only country to come out in support of Maldives' embattled authoritarian president, Abdulla Yameen, who came to power in 2013. 

Beijing has also issued an open threat against India, which has traditionally been the dominant foreign influence in the Maldives, since the islands were granted independence from Britain. 

Chinese state-controlled media has warned that if India militarily intervenes in the Maldives, Beijing won't "sit idly by" but will "take action to stop" it.
To be sure, China claims sound commercial grounds for acquiring its Maldivian islands. 

But across the Indian Ocean, port projects that China insisted were purely commercial have acquired military dimensions.
After lending billions of dollars to Djibouti, China last year established its first overseas military base in that tiny but strategically important state, located on the northwestern edge of the Indian Ocean. 

In Pakistan, Beijing has deployed its warships for the security of the Chinese-built Gwadar port, whilst seeking to establish a military base nearby.

Beijing's creditor diplomacy scored a major success in December when Sri Lanka formally handed over its strategically located Hambantota port to China under a 99-year lease valued at $1.12 billion. 

Earlier, after Sri Lanka's $500-million, largely Chinese-owned Colombo Port container terminal opened in 2014, Chinese submarines arrived quietly and docked there.
Further east in Myanmar, there are concerns in India and the West that Kyauk Pyu, a deep-water port to be developed and financed largely by China, could eventually also serve military purposes.
In the Maldives, Beijing has shown interest in turning an uninhabited island into a naval base by cutting through the surrounding coral reefs to create passageways for its warships. 

Or it could create an artificial island and militarize it, as it has done in the South China Sea.
Underscoring Beijing's strategic calculations, three Chinese frigates visited the Maldives about six months ago, docking in Male and at Girifushi Island and imparting special training to Maldivian troops.
Meanwhile, China's stepped-up naval presence in the Indian Ocean in recent weeks might be intended to send a message to India, including seeking to deter it from militarily intervening in the Maldives, as New Delhi did with Western backing in 1988, when Indian paratroopers foiled a coup attempt. 

The action reinforced India's claim to be the region's peacekeeper.
The current ruler, Yameen, has facilitated China's island acquisitions in his country by amending the constitution in 2015 to legalize foreign ownership of land. 

The amendment appeared tailored for China; the new rules for foreign ownership require a minimum $1 billion construction project that involves reclaiming at least 70% of the desired land from the ocean.
By also awarding Beijing major Chinese-financed infrastructure contracts, Yameen is saddling the Maldives with mounting debt that is likely to prove unserviceable.
Several countries that have fallen into debt servitude to China are India's immediate neighbors, including Bangladesh, the Maldives, Myanmar, Nepal, Pakistan and Sri Lanka. 

This holds major foreign-policy implications for India, which is seeing its influence erode in its backyard. 

By establishing a Djibouti-type naval base in the Maldives, China could open an Indian Ocean front against India in the same quiet way that it opened the trans-Himalayan threat under Mao Zedong by gobbling up Tibet, the historical buffer.
China's strategy in southern Asia and beyond is aimed at fashioning a Sinosphere of trade, communication, transportation and security links.  

By financially shackling smaller states through projects it funds and builds, it is crimping their decision-making autonomy in a way that helps bring them within its strategic orbit. 

It is even replicating some of the practices that were used against it during the European-colonial period when, in the words of the Chinese nationalist revolutionary leader Sun Yat-sen, "India was the favored wife of Britain while China was the common prostitute of all powers." 

One such practice is the long-term lease, an echo of the 99-year-lease through which 19th-century Britain secured control of the New Territories, expanding Hong Kong's landmass by 90%.
The International Monetary Fund has warned that Chinese loans, offered at rates as high as 7%, are promoting unsustainable debt burdens. 

The price that such loans exact can extend to national sovereignty and self-respect. 

The handover of Hambantota was seen in Sri Lanka as the equivalent of a heavily indebted farmer giving away his daughter to the cruel money lender.
In Pakistan, Chinese state companies have secured energy contracts on terms that include ownership of the plants and 16% guaranteed yearly returns, very high by global standards. 

The "economic corridor" that China seems intent on building across Pakistan has become a vehicle for a deep Chinese penetration of the Pakistani state, with most of the investment going into energy, agricultural and security projects often unrelated to a corridor.
Against this background, the word "predatory" is increasingly being used internationally about China's practices. 

U.S. Secretary of State Rex Tillerson has called China a "new imperialist power" whose practices are "reminiscent of European colonialism."
Mao said, "Political power grows out of the barrel of a gun." 

But with China emerging as the first major power in modern history without real allies, an additional principle is guiding its policy: buying friendship by opening a fat wallet. 

China is co-opting states into its sphere of influence by burying them in debt.

Chinese Paranoia

China Wants To Turn The Indian Ocean Into The China Ocean
By Panos Mourdoukoutas 

China wants to turn the vast Indian Ocean into the China Ocean. 

When it comes to investment and commerce that is.
To execute this grand plan, Beijing is investing heavily in several infrastructure projects. 

Like Sri Lanka’s ports of Colombo and Hambantota, which give Beijing a trade outpost into the Indian Ocean. 

And the China–Pakistan Economic Corridor (CPEC), a colossal infrastructure project, which connects China’s western territories to the Indian Ocean.
But that’s the old news. 

The new news is that China is turning Maldives into another trading outpost with the acquisition of land there, and the signing of a free trade agreement.
These developments have irked India, for a couple of reasons. 

One of them is economic. 

Sri Lanka and Maldives can serve as a base for China to flood the Indian market with its products. Malvides, for instance, has a free trade agreement with both India and China. 

This means that Beijing can send products to Maldives first, and then re-export them to India.
The other reason is geopolitical. 

China wants to encircle India by turning trade outposts into military outposts.
To be fair, China has repeatedly asserted that it doesn’t plan to use the port for military purposes.
The trouble is that history proves otherwise. 

In the past four years, Chinese submarines have begun suddenly and repeatedly showing up in the Chinese-operated South Container Terminal in the port of Colombo.
And that’s in spite of India’s high-profile protests, which included join naval exercises with America, Japan, and Australia.
While it is unclear whether China will succeed in turning the Indian Ocean into the China Ocean, one thing is clear: antagonism between China on the one side and India and its allies on the other will intensify, as China rises economically.
And that raises geopolitical risks, something investors should be concerned.

India, China vie for influence as crisis unfolds in Maldives

By Muneeza Naqvi

In this Feb. 2, 2018, file photo, Maldivian police officers detain an opposition protestor demanding the release of political prisoners during a protest in Male, Maldives. As a political crisis plays out in the Maldives, a quiet tug of war is taking place around it, with regional heavyweights China and India vying for strategic dominance in the picturesque Indian Ocean nation. 

NEW DELHI — As a political crisis plays out in the Maldives, a quiet tug of war is taking place around it, with heavyweights China and India vying for strategic dominance in the picturesque Indian Ocean nation.
At first glance, Beijing and New Delhi want no part in the turmoil that erupted Feb. 1 when the Maldives’ Supreme Court overturned the convictions of several opposition politicians, including the president’s main rival. 

Chinese and Indian officials spoke in usual diplomatic tones, saying they have no interest in interfering in the archipelago’s internal affairs. 

But in reality, both have strategic regional interests to safeguard and are jostling for the upper hand.
President Yameen Abdul Gayoom has sent envoys to “friendly nations” China, Pakistan and Saudi Arabia to explain his government’s position since he rejected the court ruling, imposed a state of emergency last week and arrested two of the Supreme Court judges. 

His actions fueled suspicion that he has no intention of easing up on eliminating his rivals and tightening his hold on power ahead of this year’s elections.
His most powerful opponent, exiled former President Mohammed Nasheed, appealed to India to send troops to end the crisis.
“On behalf of Maldivian people we humbly request: 1. India to send envoy, backed by its military, to release judges & pol. detainees ... We request a physical presence,” Nasheed tweeted last week.
Traditionally, the archipelago of 1,200 islands and a population of 390,000 Sunni Muslims has been firmly in New Delhi’s sphere of influence, with India even intervening in 1988 when a group of mercenaries tried to seize power. 

Its support helped keep former strongman Maumoon Abdul Gayoom in power for three decades and later aided Nasheed, the country’s first democratically elected leader, who became famous when he used his low-lying island nation to highlight the risk of rising sea levels and climate change.
But the Maldives began tilting toward Beijing after Yameen, the half brother of Gayoom, came to power in 2013 by defeating Nasheed.
Yameen has rolled back many of Nasheed’s democratic gains, with all of his potential political opponents either jailed or in exile. 

His government curbed freedom of speech and assembly, with heavy fines imposed on journalists and social media users found guilty of defamation. 

In 2015, in a trial widely criticized by rights groups, Nasheed was sentenced to 13 years in prison. 

He later received asylum in Britain.
China saw the developments as an opening.
“Until 2011, China didn’t even have an embassy in the Maldives. Coming to 2018, it’s seen as a big player in this whole Indian Ocean region,” said Mahalakshmi Ganapathy, an India-China expert at Singapore’s S. Rajaratnam School of International Studies.
When Yameen visited Beijing in December, the two countries signed a free trade agreement that eliminates most tariffs on Maldivian exports, primarily fish, and opens the island nation to Chinese goods and services, including in finance, health care and tourism.
China is already the Maldives’ primary source of tourists, whose spending largely drives the economy, and Beijing is investing hundreds of millions of dollars in an airport expansion, housing development and other projects.
China now sees the Maldives as a crucial part of its “One Belt One Road” project along ancient trade routes through the Indian Ocean and Central Asia. 

The initiative envisages building ports, railways and roads to expand trade — and China’s influence — in a swath across Asia, Africa and Europe.
China’s massive lending to poor nations for such projects has raised concerns about their ability to repay. 

Already, Beijing has taken over ports it developed in Sri Lanka and Pakistan on long-term leases.
Nasheed says China is “buying up the Maldives” under Yameen, accusing the president of opening up the floodgates to Chinese investments with no oversight and transparency. 

Beijing is watching the Maldives very carefully. 

If the political situation turns in Nasheed’s favor, that may shift the balance of influence back toward New Delhi.
India is clearly uneasy with China’s growing presence in its backyard. 

What’s less clear is how it will respond to the current upheaval in the Maldives.
So far, India hasn’t responded publicly to Nasheed’s demand that it deploy soldiers to end the crisis, and it’s held off formally meeting with Yameen’s envoy.
But on Friday, India’s Ministry of External Affairs issued a carefully worded statement aimed at China.
“We note that China has said that Maldives Government has the ability to protect the security of Chinese personnel and institutions in Maldives. We hope that all countries can play a constructive role in Maldives, instead of doing the opposite,” the statement said.
“India is in a very difficult position,” said David Brewster, an expert on Indian Ocean strategic affairs at the National Security College in Canberra, Australia. 

“It would like to see Yameen replaced, but it is not sure how to do that.”
He added: “India’s primary concern is not to restore democracy, but rather to reduce China’s influence in the country.”

Island Paradise Becomes Latest Flashpoint in India-China Rivalry

• Maldives under state of emergency as president battles court
• China, India are jockeying for influence as regime teeters

By Iain Marlow

A power struggle in the Maldives, a tiny Indian Ocean nation known for scenic luxury resorts and crystal-clear blue water, is taking center stage in a wider battle for regional influence between India and China.
On Monday, President Abdulla Yameen declared a state of emergency after the Supreme Court ordered him to free political prisoners and opposition politicians he’s thrown in jail. 

Security forces then stormed the court and arrested two judges, as well as a former leader. 

The remaining judges later annulled the previous ruling, the Associated Press reported Wednesday.
The political drama has sparked concern in India, which said last week in an unusually strong statement that it’s “imperative” for the government to obey the Supreme Court. 

China, which signed a free trade agreement with the Maldives last year, said Tuesday the country of roughly 400,000 people has “the wisdom and capabilities to cope with the current situation independently.”
India, which views China as its main geopolitical foe in Asia, has been more assertive under Prime Minister Narendra Modi in pushing to maintain geo-strategic supremacy in the Indian Ocean, with backing from the U.S. and Japan. 

China, meanwhile, has expanded its influence by building ports in Sri Lanka, Pakistan and Djibouti, a small African nation that is also home to its first overseas military base.

China Outreach
“As India tries to establish itself as the preeminent power in the Indian Ocean region, the Maldives have become increasingly important,” said Constantino Xavier, a fellow at Carnegie India in New Delhi. 

Yameen has “definitely accelerated his outreach to China, to fend off pressure from the west and also reduce leverage from India.”
The Maldives has become politically volatile in recent years. 

Yameen, who has courted Chinese and Saudi investment since coming to power in an election in 2013, has been criticized by the State Department for jailing opposition politicians and eroding human rights protections.
Before the decision to annul the court ruling, Mohamed Nasheed, an exiled former Maldives president and opposition leader, had asked India’s armed forces to back an envoy that would help enforce the order, free political prisoners and secure the safety of judges. 

The U.S. has condemned the state of emergency.

No Good Options
The judiciary has acted as a democratic check on Yameen, who still enjoys control over the state’s security forces, according to Dhruva Jaishankar, a foreign policy fellow at Brookings India.
“Yameen has been trying over the last few years to consolidate his political presence,” Jaishankar said, adding this has involved seeking Chinese funding. 

“India has been tentatively backing pro-democracy forces, but is also trying not to push him into the arms of the Chinese and the Saudis.”
Beijing has become more economically important to the Maldives in recent years. 

China sent about 300,000 tourists to the Maldives in 2017, more than any other country. 

Beijing has begun financing infrastructure projects, and unidentified Chinese company recently took out a 50-year lease on an island near the capital Male to build a resort.
Concerns are growing that China may eventually engage in land reclamation in the Maldives similar to what Beijing has done in the South China Sea, according to David Brewster, an academic at the Australian National University.
“It would take a miracle to be able to turn Yameen away from China while also restoring some semblance of democracy,” Brewster said. 

“India has no good options.”