Sri Lanka’s Foreign Policy amid Geopolitical Transformations: 1990-2024 – Part II

Chinese Naval Entry and End of Post-War Unipolarity

The ascendancy of China as an emerging superpower is one of the most striking shifts in the global distribution of economic and political power in the 21st century. With its strategic rise, China has assumed a more proactive diplomatic and economic role in the Indian Ocean, signalling its emergence as a global superpower. This new leadership role is exemplified by initiatives such as the Belt and Road Initiative (BRI) and the establishment of the Asian Infrastructure Investment Bank (AIIB). The Economist noted that “China’s decision to fund a new multilateral bank rather than give more to existing ones reflects its exasperation with the glacial pace of global economic governance reform” (The Economist, 11 November 2014). Thus far, China’s ascent to global superpower status has been largely peaceful.

In 2025, in terms of Navy fleet strength, China became the world’s largest Navy, with a fleet of 754 ships, thanks to its ambitious naval modernisation programme. In May 2024, the People’s Liberation Army Navy (PLAN) further strengthened its capabilities by commissioning the Fujian, its latest aircraft carrier. Equipped with an advanced electromagnetic catapult system, the Fujian can launch larger and heavier aircraft, marking a significant upgrade over its predecessors.

Driven by export-led growth, China sought to reinvest its trade surplus, redefining the Indian Ocean region not just as a market but as a key hub for infrastructure investment. Notably, over 80 percent of China’s oil imports from the Persian Gulf transit to the Straits of Malacca before reaching its industrial centres. These factors underscore the Indian Ocean’s critical role in China’s economic and naval strategic trajectories.

China’s port construction projects along the Indian Ocean littoral, often associated with the Belt and Road Initiative (BRI), exemplify its deepening geopolitical and economic engagement in the region. These initiatives encompass multipurpose berth development, deep-sea port construction, and supporting infrastructure projects aimed at enhancing maritime connectivity and trade. Key projects include the development of Gwadar Port in Pakistan, a strategic asset for China’s access to the Arabian Sea; Hambantota Port in Sri Lanka, which became a focal point of debt diplomacy concerns; the Payra deep-sea port in Bangladesh; as well as port and road infrastructure development in Myanmar’s Yunnan and Kyaukphyu regions and Cambodia’s Koh Kong.

While these projects were promoted as avenues for economic growth and regional connectivity, they also triggered geopolitical tensions and domestic opposition in several host countries. Concerns over excessive debt burdens, lack of transparency, and potential dual-use (civilian and military) implications of port facilities led to scrutiny from both local and external stakeholders, including India and Western powers. As a result, some projects faced significant pushback, delays, and, in certain cases, suspension or cancellation. This opposition underscores the complex interplay between economic cooperation, strategic interests, and sovereignty concerns in China’s Indian Ocean engagements.

China’s expanding economic, diplomatic, and naval footprint in the Indian Ocean has fundamentally altered the region’s strategic landscape, signalling the end of early post-Cold War unipolarity. Through the Belt and Road Initiative (BRI) initiatives, China has entrenched itself economically, financing. Diplomatically, Beijing has deepened its engagement with littoral states through bilateral agreements, security partnerships, and regional forums, challenging traditional Western and Indian influence.

China’s expanding naval deployments in the Indian Ocean, including its military base in Djibouti, and growing security cooperation with regional states, mark the end of unchallenged US dominance in the region. The Indian Ocean is now a contested space, where China’s presence compels strategic recalibrations by India, the United States, and other regional actors. The evolving security landscape in the Indian Ocean—marked by intensifying competition, shifting alliances, and the rise of a multipolar order—has significant implications for Sri Lanka’s geopolitical future.

India views China’s growing economic, political, and strategic presence in the Indian Ocean region as a key strategic challenge. In response, India has pursued a range of strategic, political, and economic measures to counterbalance Chinese influence, particularly in countries like Sri Lanka through infrastructure investment, defense partnerships, and diplomatic engagements.

Other Extra-Regional powers

Japan and Australia have emerged as significant players in the post-Cold War strategic landscape of the Indian Ocean. During the early phases of the Cold War, Australia played a crucial role in Western ‘Collective Security Alliances’ (ANZUS and (SEATO). However, its direct engagement in Indian Ocean security remained limited, primarily supporting the British Royal Navy under Commonwealth obligations. Japan, meanwhile, refrained from deploying naval forces in the region after World War II, adhering to its pacifist constitution and post-war security policies. In recent decades, shifting strategic conditions have prompted both Japan and Australia to reassess their roles in the Indian Ocean, leading to greater defence cooperation and a more proactive regional presence.

In the post-Cold War era, Australia has progressively expanded its naval engagements in the Indian Ocean, driven by concerns over maritime security, protection of trade routes, and China’s growing influence. Through initiatives, such as the Quadrilateral Security Dialogue (Quad) and deeper defence partnerships with India and the United States, Australia has bolstered its strategic presence in the Indian Ocean region.

Recalibration of Japan’s approach

Japan, too, has recalibrated its approach to Indian Ocean security in response to geopolitical shifts. Recognising the Indian Ocean’s critical importance for its energy security and trade, Japan has strengthened its naval presence through port visits, joint exercises, and maritime security cooperation. The Japan Maritime Self-Defence Force (JMSDF) has taken on a more active role in anti-piracy operations, freedom of navigation operations (FONOPS), and strategic partnerships with Indian Ocean littoral states. This shift aligns with Japan’s broader strategy of contributing to regional stability while balancing its constitutional constraints on military force projection.

Japan’s proactive role in the Indian Ocean region is evident in its diplomatic and defence engagements. In January 2019, Japan sent its Foreign Minister, Taro Kono, and Chief of Staff, Joint Staff, Katsutoshi Kawano, to the Raisina Dialogue, a high-profile geopolitical conference in India. Japan’s National Security Strategy, released in December 2022, identifies China’s growing assertiveness as its greatest strategic challenge and underscores the need to deepen bilateral ties and multilateral defence cooperation in the Indian Ocean. It also emphasises the importance of securing stable access to sea-lanes, through which more than 80 percent of Japan’s oil imports pass. In recent years, Japan has expanded its port investment portfolio across the Indian Ocean, with major projects in Sri Lanka, Bangladesh, and Myanmar. In 2021, Japan participated for the first time in CARAT-Sri Lanka (Cooperation Afloat Readiness and Training), a bilateral naval exercise. Japan’s Maritime Self-Defence Force returned for the exercise in January 2023, held at Trincomalee Port and Mullikulam Base.

Japan’s strategic interests in the Indian Ocean have been most evident in its involvement in port infrastructure development projects. Sri Lanka, Bangladesh, and Myanmar are key countries where early Chinese-led port construction faced setbacks. Unlike India, which carries historical and political complexities in its relations with these countries, Japan is better positioned to compete with China. In December 2021, a Japanese company established a ship repair and rebuilding facility in Trincomalee, complementing the already well-established Tokyo Cement factory. When the Sri Lanka Ports Authority announced plans in mid-2022 to develop Trincomalee as an industrial port—inviting expressions of interest from investors to utilise port facilities and up to 2,400 hectares of surrounding land—Trincomalee regained strategic attention.

The Colombo Dockyard, in collaboration with Japan’s Onomichi Dockyard, has established a rapid response afloat service in Trincomalee, marking a significant development in Japan’s engagement with Sri Lanka’s maritime infrastructure. This initiative aligns with Japan’s broader strategic interests in the Bay of Bengal, a region of critical economic and security importance. A key Japanese concern appears to be limiting China’s ability to establish a permanent presence in Trincomalee. This initiative underscores the broader strategic competition in the Indian Ocean. Trincomalee, with its deep-water harbour, has long been regarded as a critical maritime asset. Japan’s involvement reflects its efforts to deepen economic and strategic engagement with Sri Lanka amid growing regional competition. The challenge before Sri Lanka is how to navigate this strategic contest while maximising its national interests.

Other Regional Powers

In analyzing the evolving naval security architecture of the post-Cold War Indian Ocean, particular attention should be given to the naval developments of regional powers such as Pakistan, Indonesia, and Malaysia. In 2012, Pakistan established the Naval Strategic Force Command (NSFC) to strengthen Pakistan’s policy of Credible Minimum Deterrence (CMD). The creation of the NSFC suggests a shift toward sea-based deterrence, complementing Pakistan’s broader military strategy. In December 2012, Pakistan conducted a series of cruise missile tests from naval platforms in the Arabian Sea. Given India’s expanding maritime capabilities, which Pakistan views as a significant threat, the Pakistan Navy may consider deploying tactical nuclear weapons on surface ships as part of its evolving deterrence strategy. Sri Lanka’s foreign policy cannot overlook this development.

Indonesia also emerged as a significant player in the evolving naval security landscape of the Indian Ocean. In 2010, it launched a military modernisation programme aimed at achieving a ‘Minimum Essential Force’ (MEF) by 2024. As part of this initiative, Indonesia sought to build a modern Navy with 247 surface vessels and 12 submarines. One of the primary challenges faced by the Indonesian Navy (TNI-AL) is piracy. To enhance maritime security, Indonesia and Singapore signed the SURPIC Cooperation Arrangement in Bantam in May 2005, enabling real-time sea surveillance in the Singapore Strait for more effective naval patrols. In 2017, Indonesia introduced the Indonesian Ocean Policy (IOP) and subsequently incorporated blue economy strategies into its national development agenda, reinforcing its maritime vision. According to projections from the Global Firepower Index, published in 2025, the Indonesian Navy is ranked fourth in global ranking and second in Asia in terms of Navy fleet strength (Global Firepower, 2025).

In October 2012, the Royal Malaysian Navy (RMN) announced plans to build a second Scorpène simulator training facility at its base in Kota Kinabalu, in addition to submarine base in Sepanggar, Sabah, constructed in 2002. To enhance its naval capabilities, the RMN planned to procure 18 Littoral Mission Ships (LMS) for maritime surveillance and six Littoral Combat Ships (LCS) between 2019 and 2023. Malaysia and China finalised their first major defence deal during Prime Minister Najib Razak’s visit to Beijing in November 2016. During this visit, Malaysia’s Defence Ministry signed a contract to procure LMS from China, as reported by The Guardian. Despite this agreement, Malaysia continues to maintain amicable relations with both China and India, as does Indonesia.

The increasing presence of major naval powers, the rise of regional stakeholders, and the growing significance of trade routes and maritime security have transformed the Indian Ocean into a central pivot of both regional and global politics, with Sri Lanka positioned at its heart. (To be Continued)

by Gamini Keerawella