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Sri Lanka launches China-led investment zone amid protests

By B. Channa Kumara

HAMBANTOTA, Sri Lanka (Reuters) - Sri Lankan police used tear gas and water cannons on Saturday to disperse hundreds of stone-throwing demonstrators protesting against a planned investment zone supported by China.

Hospital authorities said at least 21 people were injured in the protests. According to police, 52 demonstrators were arrested.

Protesters say that the government of President Maithripala Sirisena is trying to evict thousands of families to provide 15,000 acres (6,070 hectares) of land in the projected industrial zone for Chinese investors.

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The zone is in the southern district of Hambantota, where China has already built a $1.5 billion port and airport, part of President Sirisena's ambitious $50 billion development project to revive the economy.

The government has denied the protesters' claim and says opposition is driven by former president Mahinda Rajapaksa's political ambitions.

Rajapaksa, who is trying to make a political comeback, has publicly criticized the plan, saying it will deprive people of agricultural land.

At Saturday's opening of the investment zone, Chinese ambassador Yi Xianlang struck an upbeat note.

"This is the moment for China to help other countries who need investments," the Chinese envoy to Sri Lanka told the launching ceremony. "No force can stop the cooperation from China to Sri Lanka."

He also said the investment zone would be the most important economic project of this government and "if everything goes well", China would invest $5 billion during the next three to five years and create 100,000 jobs.

Sirisena's government is already in the final phase of discussion with China Merchants Port Holdings Company Ltd to develop the China-built port, granting them 80 percent stake on a 99-year lease for $1.12 billion.

China's interest in the port may reflect its ambition to build a "Maritime Silk Route" to the oil-rich Middle East and onwards to Europe.

That makes some countries, including India and the United States, nervous with Sri Lanka's proximity to shipping lanes through which much of the world's trade passes en route to China and Japan.

The port was built with Chinese loans and contractors in 2010 under Rajapaksa, as part of efforts to develop the country's infrastructure after ending a 26-year war in 2009.

(Writing by Ranga Sirilal; Editing by Shihar Aneez and Stephen Powell)

 
 
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