Balancing India and China: A Case Study of Sri Lanka

Abstract

Sri Lanka’s strategic location in the Indian Ocean has placed it at the center of intensifying geopolitical competition and rivalry between China and India. This report examines Sri Lanka’s experience in balancing its own priorities and needs with the competing interests and concerns of India and China through the lens of project financing. It provides a data-driven understanding of the opportunities, challenges, and pitfalls that countries like Sri Lanka face by analysing the grants, loans, and investments made by China and India from 2000 to 2023. Drawing from these findings, the report also sheds light on safeguards countries like Sri Lanka can adopt to overcome the challenges and mitigate risks. The experience of Sri Lanka provides valuable insights and lessons for countries navigating similar dynamics that strive to manage strategic competition and rivalry between global and regional powers with their own development needs and priorities.