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Why are China and India so interested in the Maldives?

The Maldives, long a popular tourist destination, has grown in strategic importance in recent years as China and India vie for influence in the region, and as Beijing pushes ahead with its global trade and infrastructure plan.

Spread over nearly 1,200 islands spanning more than 90,000 sq km, key shipping lanes – where Beijing and New Delhi compete to pursue their often conflicting maritime strategies – pass through this tiny Indian Ocean nation.

But after Abdulla Yameen, who has drawn the Maldives closer to China, was ousted as president in Sunday’s election, his successor and opposition leader Ibrahim Mohamed Solih could be about to tip the power balance between the two Asian giants in the archipelago.

Why do China and India compete over this tiny resort nation?

For years the Maldives – a country of around 400,000 people – has been in the sphere of Indian political influence. Beijing has stepped up its engagement in the country in recent years, seeing it as a key part of the investment route along its “Belt and Road Initiative”.

But China’s increasing presence there has fuelled New Delhi’s suspicion that the nation is part of Beijing’s “String of Pearls” strategy to build a network of economic and military ties in the region to contain India.

Those fears have grown as Yameen used Chinese money to build infrastructure in the Maldives, and after he endorsed Beijing’s new Silk Road initiative.

How is China engaging with the Maldives?

Beijing has made large investments in infrastructure projects in the Maldives during Yameen’s time in office.

They include a US$830 million investment to upgrade the Maldives airport and build a 2km (1.3-mile) bridge to link the airport island with the capital Male, according to the Centre for Global Development.

Chinese are also building a 25-storey apartment complex and hospital in the Maldives.

Meanwhile, some 306,000 Chinese tourists visited the Maldives last year – accounting for 21 per cent of the country’s total number of visitors.

When three Chinese naval ships docked in Male in August last year, it only amplified India’s concerns.


How have the Maldives’ ties with India fared under Yameen?

Bilateral ties between India and the Maldives have deteriorated during Yameen’s time in power.

In March 2015, Indian Prime Minister Narendra Modi cancelled his state visit to the island nation over the treatment of Mohamed Nasheed, the former pro-India Maldivian president who had been jailed.

The Maldives also declined India’s invitation to take part in its biennial eight-day naval exercise, Milan, this year.

Yameen’s government has also rejected visa renewals for Indians who were legally working in the Maldives, without giving any explanation.

Are Chinese investments coming at a price for the Maldives?

The small nation has racked up an estimated US$1.3 billion of debt to China – more than a quarter of its GDP – mostly for large-scale infrastructure projects, according to Reuters.

Exiled former president Nasheed said in January that 80 per cent of the Maldives’ foreign debt was owed to China.

He said Chinese interests had leased at least 16 islets of the 1,192 scattered coral islands which make up the country and were building ports and other infrastructure there, according to an Agence France-Presse report.

In the run-up to the elections, an opposition Maldivian Democratic Party spokesperson called the Beijing-funded projects “debt traps” and signs of corruption under Yameen.

Critics have warned that the debt may see the country making major concessions as its neighbour Sri Lanka has – it was forced to sign a 99-year lease with China for the port of Hambantota after it was unable to repay loans to develop the project.

China’s foreign ministry has said Beijing never attached any political conditions to its Maldives aid, which has done no harm to the country’s sovereignty and independence, nor jeopardised security in the Indian Ocean region.

In February, ministry spokesman Geng Shuang dismissed Nasheed’s “land grab” accusation as “nonsense”.

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