Last year, when it became evident that Anura Kumara Dissanayake would emerge as a potential President, there were two questions the National People’s Power (NPP) had to address.
Both questions stemmed from the fact that the NPP — and its core constituent party Janatha Vimukthi Peramuna (JVP)— had been a party of the Opposition throughout its history, rather than a party of the Government. First was to convince the public that an NPP Government is capable of handling the economy, which was in a fragile state due to the economic crisis.
The second question was on foreign policy. Sceptics raised doubts about its diplomatic know-how, due to the alleged lack of experience. Overshadowing this latter concern lay an elitist assumption — a mistrust towards the ability of a movement with predominantly rural origins to handle sophisticated matters involving diplomacy.
The first two months of the NPP Government show that the President has taken the challenge of disproving these assumptions into his hands. The recently concluded China visit of President Dissanayake came only after a few weeks following his Indian tour in December 2024. The timeline demonstrates the priority the new administration has accorded to maintaining ties with influential nations in the region.
Alignment within Non-Alignment
Sri Lanka’s foreign policy history shows a curious tendency concerning strategic alignments. The country adopted non-alignment as its official foreign policy ideology after 1956. Largely, ever since, Sri Lanka can be said to have remained within the broader framework of non-alignment without explicitly becoming an ally of any greater power.
However, within the broader framework, from time to time, there have been leanings towards different power blocs, prompted by strategic considerations. Historically, the United National Party (UNP) was known for its relatively pro-Western stance, and the Sri Lanka Freedom Party (SLFP) for being leaned more towards the Socialist bloc. After the end of the Cold War, until the recent rise of China, there were no serious issues about alignment. But with the rise of China, and the intensification of China’s tensions with the West from the late 2000s, a pattern again emerged, with the UNP favouring a more friendly attitude, and the Sri Lanka Podujana Peramuna (SLPP) moving closer towards China.
The situation in this new phase assumed a more complicated character due to India’s shifting role in geopolitics. During the cold-war, India maintained a firm alliance with the Soviet Union. Therefore, there was no tension between being pro-Soviet and India. However, after the end of the Cold War, India gradually shifted towards forming a strategic alliance with the Western bloc. This alliance became stronger due to the rise of China, as India viewed the latter as a threat to its regional dominance. Nevertheless, India has not become a satellite state of the US hegemony like countries such as Japan and has asserted a more independent path in terms of foreign policy.
Sri Lanka’s foreign policy interactions from the late 2000s have taken place within this geopolitical context. For instance, during Mahinda Rajapaksa’s second administration (2010-2015), Sri Lanka’s connections with China had a significant growth, with major infrastructure projects such as highway construction, the Hambantota port development and the Port City project came in with Chinese financial lending. During the Yahapalana Government (2015-2019) led by the United National Party, the Government changed course and even went to the extent of suspending the Port City project for some time. More emphasis was laid on improving ties with the West and India. India maintained a skeptical attitude towards Sri Lanka’s growing China connections.
The pendulum swung Westwards again since mid-2022, after Ranil Wickremesinghe became the President. Following Sri Lanka’s sovereign debt default, the debt-restructuring process initiated with the endorsement of the International Monetary Fund (IMF) made Sri Lanka more dependent on the Western bloc. India intervened during the economic crisis, offering a significant financial aid package to Sri Lanka, and that was seen as a strategic manoeuvre to assert its sphere of influence in the region by keeping China away. Moreover, India highlighted on many economic ‘connectivity’ projects that appear as initiatives that aim to bind Sri Lanka to its sphere of influence.
The 2023/24 China Research Vessel controversy was an interesting case that tested foreign policy priorities of the Wickremesinghe Government. In 2023, when India raised concerns over a Chinese research vessel being allowed to enter the Colombo Port, the Wickremesinghe Government imposed a general prohibition on such vessels into Sri Lankan waters. But later in 2024, it was revealed that at least 12 vessels of other countries have been allowed despite the ban, though no Chinese vessels were admitted.
This is not to suggest that there was a total disruption in Sri Lanka-China relations during the past two years. But a certain shift towards the West and India is observable.
Details of President Dissanayake’s China visit show that the new Government is willing to have a deeper connection with the Chinese Government. The leading news indeed was the conclusion of the Memorandum of Understanding (MoU) to build an oil refinery in Hambantota, worth USD 3.7 billion, which is considered as the largest Foreign Direct Investment to Sri Lanka.
This investment is of crucial importance for two reasons. First, as Sri Lanka is emerging from bankruptcy, there is a greater need to shift the focus of the economy, from debt-driven development to investment-driven development. This is a point that was highlighted during President Dissanayake’s visit to India as well. On the other hand, China’s decision to invest in Sri Lanka sends a green light to other potential foreign investors too, indicating that Sri Lanka is a favourable destination for investment.
Cooperation initiatives
The joint statement issued by the two countries at the end of the visit refers to a number of development cooperation initiatives, and the willingness of Sri Lanka to work with China’s Belt and Road Initiative (BRI). The reference to the BRI is not something new, as even during Wickremesinghe’s visit to China in 2023, the joint statement made the same reference. But the new statement seems to have a more active undertone, indicating a stronger interaction, compared to the more general tone underpinning the 2023 statement.
Another point of interest might be Sri Lanka’s assurance to China on separatist conflicts related to Tibet and Xinjiang. Though support for one-China policy, indicating non-recognition of Taiwan independence featured in the 2023 statement, the new joint statement seems to have gone further, extending solidarity towards other issues China faces with a conflicted nature.
Rather than gravitating towards China, the new Government’s more friendly gesture towards China should be seen as correcting course, rectifying the deviation away that was seen in the past two years. Engagements with India and China so far shows that the focus of the new administration lies in leveraging diplomatic relations to strengthen the sovereign agenda of Sri Lanka — particularly, to bolster the productive capacity of the Sri Lankan economy through greater investment inflows into strategically important sectors in the economy.
India and China are influential actors in the emerging multi-polar international order. The year 2025 marks the 70th anniversary of the historic Bandung Conference, where China and newly independent India joined hands with other African and Asian countries suffering from colonialism to envision a more equitable world order free from Western dominance. Unfortunately, since the 1960s, Indo-China relations started declining with both powers turning against each other.
Despite this animosity, cooperation with both countries is important for Sri Lanka to escape from the straitjacket of debt-driven economics Sri Lanka has been stuck in for the past few decades. The challenge before the NPP Government is to skillfully carve out a way forward, with national interest in mind, navigating the tensions between the two emerging Asian powers.
