Sri Lanka to continue $1.5 billion Chinese-funded port city

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COLOMBO, Sri Lanka (AP) — Sri Lanka's new government will go ahead with a $1.5 billion Chinese-funded port city project planned by the previous president to avoid misunderstandings with Beijing, an official said Thursday.

Chinese President Xi Jinping officially launched the city's development on an artificial island during a visit to Sri Lanka last September. The new government of President Maithripala Sirisena has said it wants to review all projects to ensure they are environmentally viable and corruption-free.

Cabinet spokesman Rajitha Senaratne told reporters that the project will go ahead despite an incomplete environment assessment to avoid a "misunderstanding" with the Chinese government.

Since being elected last month, Sirisena's government has moved to mend relations with the United States and neighboring India which were strained during the pro-Beijing administration of former President Mahinda Rajapaksa. The decision to continue the port project is seen as an effort to reassure China.

Chinese Assistant Foreign Minister Liu Jianchao will meet Sri Lankan Prime Minister Ranil Wickremesinghe on Friday, a government statement said.

Senaratne said an environment impact assessment was completed for the reclamation part of the project but not for the city development.

"But there is time to do that. So the project will continue while rectifying the shortcomings," he said.

He said the project will be discussed along with any alternations during a visit by Sirisena to Beijing next month.

Under Rajapaksa, relations with China strengthened, with heavy Chinese investment. The port city project became the face of Chinese influence in the country.

Two recent port calls by Chinese submarines at a Chinese-built terminal in Colombo fueled speculation that Beijing wants to have port access along strategic sea lanes linking the energy-rich Persian Gulf and economic centers in eastern China.

The submarine visits spooked India, which lies just 30 miles (50 kilometers) from Sri Lanka and shares U.S. uncertainty about Beijing's intentions as China's military power grows.

China has become Sri Lanka's largest lender in recent years, providing more than $6 billion through September 2013 for port facilities, highways and a new international airport.

China also supplied weapons to the government during Sri Lanka's civil war that ended in 2009 with the defeat of ethnic Tamil separatists, and has defended the Indian Ocean island nation from allegations of human rights abuses and calls for a U.N. investigation into alleged war crimes.

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