By late 2014, the Chinese-built Hambantota Port was hemorrhaging money: fewer than 100 vessels berthed at the port in 2013, and Sri Lanka was paying China $30 million per year in interest alone. During a trip to Colombo in September 2014, Xi agreed to ease loan conditions, while a Chinese consortium was quietly granted a 35-year lease to operate four of the port's seven container berths.
To add further intrigue, a few days before Xi arrived in Colombo, a Chinese submarine surfaced at the Chinese-operated South Container Terminal in the Colombo port. It was the first port call by a conventional Chinese submarine in the Indian Ocean. Peculiarly, Japanese Prime Minister Shinzo Abe was visiting Colombo at the time, and the Sri Lankan press speculated that Rajapaksa was not notified of the submarine's port call beforehand.
For India, the sudden appearance of a Chinese submarine in Sri Lanka was too much to bear. Seventy percent of Colombo's transshipment traffic comes from India, and New Delhi has long been concerned over China's efforts to expand its presence in the island nation. When Indian Prime Minister Narendra Modi met Rajapaksa a few weeks later, he reminded him that Colombo "was obliged to inform its neighbors about such port calls under a maritime pact." But the same submarine surfaced again in November 2014, catching New Delhi by surprise once more.
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