Silk Cage Webinar Report-VI: Ports, Power, and Political Access: China’s Strategic Grip over Sri Lanka

Institute for Security and Development Policy | Tabita Rosendal, Nilanthi Samaranayake, Ivan Lidarev, Smruti S. Pattanaik, Jagannath Panda, Joel von Rothkirch, Wilhelm Geijer

China is systematically expanding its strategic influence in the Indian Ocean by integrating Sri Lanka's coastal infrastructure into a broader maritime network. This development, highlighted during an August 31, 2026 webinar hosted by the Stockholm Center for South Asian and Indo-Pacific Affairs, leverages both foreign direct investment and state-backed loans to secure critical trade routes.

These investments target commercial development while establishing a dual-use port-and-logistics architecture. Economic and political imperatives overlap. State-owned enterprises drive these projects, focusing on the International Terminal in Colombo Port, Hambantota International Port, and the Colombo Port City financial hub. Ultimately, this multifaceted approach secures Beijing's natural resource and oil imports while altering Sri Lanka's domestic political environment. Consequently, Colombo must navigate complex interactions between local elites, political parties, and external partners to preserve its national sovereignty and balance competing geopolitical interests across the wider Indian Ocean region.

Comment

Beijing's integration of Hambantota International Port into its wider maritime network demonstrates a deliberate transition from commercial access to dual-use logistics nodes. The dual-use potential of Hambantota allows the People's Liberation Army Navy to establish reliable sustainment points along critical sea lines of communication. By securing long-term operational control over Colombo Port City, Chinese state-owned enterprises lay the groundwork for a persistent logistical footprint in the Indian Ocean.

This logistical mechanism relies on a network of state-owned entities, such as China Merchants Port Holdings, which manage the day-to-day operations of these deep-water terminals. These commercial entities provide the technical maintenance, bunkering, and administrative infrastructure at Hambantota necessary to support Chinese naval vessels without requiring formal military bases. Consequently, the dual-use framework of the Colombo Port International Terminal bypasses traditional diplomatic friction while securing essential maritime access for the People's Liberation Army Navy.

Strategic Question for Discussion

If China Merchants Port Holdings continues to expand its operational footprint at Hambantota International Port, does the distinction between commercial management and military access remain viable, or does it inevitably break down under geopolitical pressure?

The trajectory indicates that the commercial-military distinction will increasingly blur as the People's Liberation Army Navy expands its Indian Ocean deployments. The operational integration of Hambantota International Port by state-owned enterprises suggests that administrative and logistical support will transition seamlessly to military usage during regional contingencies. Consequently, competing powers are likely to treat these commercial nodes as de facto naval facilities regardless of official diplomatic assurances.

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