David Cameron downplayed Chinese role in controversial $1.4B port project
LONDON — U.K. Foreign Secretary David Cameron will be grilled in parliament over new footage showing he sought to downplay China’s role in a controversial port development in Sri Lanka.
The newly-unearthed video shows Cameron — who unexpectedly returned to the U.K. Cabinet last week — telling would-be-investors he wanted to correct “misapprehensions” about China’s role in the Port City Colombo scheme.
POLITICO previously reported how on September 26 — less than two months before becoming U.K. foreign secretary — Cameron was paid thousands of pounds to fly to the UAE to drum up investment in the project, which critics say is part of a global power grab by Beijing and could one day become a permanent Chinese outpost.
The opposition Labour Party said the case now raises serious questions for Cameron. Peers plan to grill him on the issue in the House of Lords next month.
The extended video footage — uploaded to YouTube last month by the Sri Lankan channel Newsfirst — shows Cameron striving to downplay China’s role in a scheme which was launched by President Xi Jinping himself and built by a Chinese state-controlled firm with Chinese funds.
“One of the things we can do today is sort of correct some misapprehensions about it,” Cameron can be seen telling investors.
“When you read the press about it, you’d think the whole thing was owned by China, governed by China and that the Sri Lankans have made a terrible mistake.”
Cameron added: “The rules are being set by a Sri Lankan authority. They’re not being set by someone else. This is still the sovereign territory of Sri Lanka. The Chinese company has a lease on a part of it but that returns fully back to Sri Lanka.”
But critics fear the controversial arrangement, which has seen control of the project handed to an external commission, could eventually give China a permanent foothold in Sri Lanka.
The video also shows Cameron downplaying an IMF report which criticized the project’s tax arrangements. “The IMF — well there’s some skepticism in their report. It does say this would be a good opportunity for businesses to invest in Sri Lanka,” Cameron added.
In the same video, Thulci Aluwihare — deputy managing director at CHEC Port City Colombo Co., the Chinese state-controlled firm running the project — says Cameron’s involvement “resulted in responses much better [from investors] than what we expected.” The Sunday Times reported last weekend that Cameron had helped to raise a promised $3 billion.
Pending questions
Cameron’s spokesperson told POLITICO on October 18 and again on November 16, after he had become foreign secretary, that he “has not engaged in any way with China or any Chinese company about these speaking events.”
But photos uploaded by Port City Colombo on social media and republished by several U.K. national newspapers show Cameron shaking hands with and receiving a gift from Yang Lu, managing director of CHEC Port City Colombo.
Further footage unearthed by the Inter-Parliamentary Alliance on China (IPAC)’s Chung Ching Kwong shows Cameron receiving a tour of the site from Yang and others.
Cameron’s spokesperson declined to comment further. His office said the gift he received from Yang was a token with no financial value, and that the pair did not speak about Cameron’s involvement in any speaking events.
Cameron’s office said he was only invited to speak at the UAE investment events later in the year, via a booking made by the Washington Speakers Bureau, with KPMG Sri Lanka as the contracting party.
Port City Colombo has continued to use pictures of Cameron — along with his supportive quotes — in social media promotion since his appointment as foreign secretary.
Catherine West, Labour’s shadow minister for Asia and the Pacific, said: “The new foreign secretary insisted on two occasions he had not ‘engaged in any way’ with China over the Port City Colombo development in Sri Lanka, but now it’s clear he met with and received gifts from the Chinese state-backed developer of the project. This raises serious questions for David Cameron to answer.”
“Given MPs are unable to question him in the Commons, we need urgent clarity over his links with China, including disclosure of his relevant interests,” West said.
Luke de Pulford, executive director of IPAC, said: “The Cabinet Office and parliamentary standards committee should be investigating what has gone on here.”
Belt and Road criticism
CHEC Port City Colombo Co. — whose parent company is the U.S.-sanctioned, Beijing-controlled China Communications Construction Company (CCCC) — is in charge of the development of Port City Colombo. The CCCC has spent $1.4 billion on the project, and in return obtained the right to use 62 hectares of land on a 99-year lease.
A second Chinese-built port in Hambantota, around 300km away, was leased to China for 99 years in 2017 after the Sri Lankan government struggled to repay its debts.
Both projects have been branded examples of “debt-trap diplomacy,” where China hands out billions in loans for infrastructure schemes which ultimately deepen a country’s debt burden — and so their dependence on Beijing.
The U.K.’s newly-published policy paper on international development is critical of China’s Belt and Road initiative, warning it was associated with “allegations of corruption and capture of local elites.” In his new role Cameron formally launched the paper at an event on Monday night — barely two months after he was urging wealthy investors to pour cash into a landmark Belt and Road project.
Members of the House of Lords are now drafting questions for Cameron ahead of his first oral questions session as foreign secretary, which has been penciled in for December 5.
Christopher Fox, the centrist Liberal Democrats’ business and industry spokesperson in the House of Lords, said: “There is a strong need to clarify where Cameron sits with respect to China.
“His past political dialogue and reported business activities mean that he needs to make a clean breast of his past interests. We will seek out every opportunity to do this.”
