Geopolitics: Sri Lanka further under pressure to walk a fine line

• Sri Lanka should act with deft diplomacy since it is positioned to leverage its location for attraction of investments and enhancement of trade links to get out of the economic crisis
• When this government was formed, many perceived that it would lean more towards China in its foreign policy. It has proven otherwise now, and China has also felt it

Sri Lanka enjoys multiple advantages globally due to its strategic positioning in the region, with easy access to key markets and major shipping lanes that account for a significant portion of transnational trade worldwide. The country has the potential to be developed as a naval and air hub, and investments in the development and expansion of the country’s seaports and airports are farsighted moves. The country matters to the rest of the world, particularly all key players, both in the Global South and the Global North. 
The country’s global significance and relevance were, once again, pronounced with the visits of Australia’s Deputy Prime Minister and Defence Minister Richard Marles and New Zealand’s Deputy Prime Minister and Foreign Minister Winston Peters in quick succession. Both visits highlight Sri Lanka’s importance as a country in the Indo-Pacific region, both from defence and trade perspectives. A plethora of opportunities are on offer for Sri Lanka to realise its economic potential in partnership with these countries. Nevertheless, along with it comes the challenge of navigating competing, intricate security interests of the major powers - China versus the rest of the powers, to be precise.   
In an interaction with the press here on Tuesday, the Australian Minister did not mince his words about his country’s security interests. He was clear enough when he said that his country has security anxiety when it comes to China, and his government tries to work with Sri Lanka and India to assert the rule-based order in the region, which is under pressure.   
“We’ve got that trade back. There’s much more ministerial contact that we’re grateful for. The relationship is in a better place. Of course, China does represent an ongoing security anxiety for us,” he said in response to a query in this regard. “We’ve seen a very significant military build-up on the part of China. Now, what we stand for is an assertion of the rules-based order. That’s got to be to the interests of a country like ours, which is deeply invested in a global rules-based order, as being the underpinning of how we connect to the world and how our economy works,” he added.   
His choice of phrases, “more ministerial contact” and a relationship that is “in a better place,” suggest Australia’s diplomatic reset with China in terms of trade links. Trade is an area mutually beneficial between two countries in any part of the world. Trade ties supersede areas with irritants, such as defence, in most cases. Security is a contentious issue today.   
Instead, his articulation of “security anxiety” over China and emphasis on the rules-based order signals Australia’s continued alignment with regional partners like Sri Lanka and India to maintain stability to contain Chinese influence in the region. He drew a connection between security and economic order, saying that the rules-based system is “how we connect to the world and how our economy works.” This frames Australia’s security interests not just in traditional military terms but also in the broader context of trade, connectivity, and diplomatic engagement.   
Australia has chosen to walk a fine line by rebuilding trade linkages while remaining alert to security concerns.   
Sri Lanka is also seeking to walk a fine line, striking a balance among the main powers. Its equation with China is different. The two countries enjoy smooth relations despite occasional irritants. Sri Lanka seeks excellent ties with China in all-encompassing areas, but finds it difficult to accomplish something tangible on the ground because of the involvement of other countries, such as India, which are increasingly sceptical about the Chinese presence in the region.   
Colombo Port City, a major Chinese investment in Sri Lanka,  has yet to get off the ground fully.
Sri Lanka once irritated China when it imposed a moratorium on its research vessels conducting maritime research activities in the region.   
With the unfolding situation, Sri Lanka is poised to come under increased pressure in the exercise of neutrality in its engagements with China and other powers- India, the United States, Japan, and Australia, etc.   
Going by the latest global political developments, for Sri Lanka, as a small country with a weak economic footing, pressure is now bound to be more intense because of the new policy of the Trump administration in the United States.   
The U.S. Indo-Pacific policy is more or less the same. But, according to remarks by Secretary of Defence Pete Hegseth at the 2025 Shangri-La Dialogue in Singapore recently, the U.S. administration is going to assert itself in full measure in this regard. The U.S. will build up its military apparatus as a deterrent force to Chinese military might. This region will be under increased focus of the U.S. radar under the Trump administration.   
“America is proud to be back in the Indo-Pacific — and we’re here to stay. The United States is an Indo-Pacific nation. We have been since the earliest days of our Republic. We will continue to be an Indo-Pacific nation — with Indo-Pacific interests — for generations to come.   
And under President Trump’s leadership, the United States is committed to achieving peace through strength. That starts with deterring aggression around the world and here in the Indo-Pacific, here in our priority theatre, here with you — our allies and our partners. The United States stands ready to work with any country that is willing to step up and preserve the global and regional peace that we all hold dear,” he said.   
 The transcript of his speech was made available to the local press by the U.S. Embassy in Colombo.   
When he said the United States is an Indo-Pacific nation, he seeks to position the U.S. not as an external power, but as an inherent stakeholder in the region. He stresses on legitimacy and continuity of U.S. involvement in the region. It is nothing but to counter China in South Asia and Southeast Asia regions in particular.   
 He signalled that the U.S. views China’s assertiveness as strategic threats. The U.S. will engage with Sri Lanka.   
When this government was formed, many perceived that it would lean more towards China in its foreign policy. It has proven otherwise now, and China has also felt it. Any Sri Lankan government finds it difficult to tie up with China beyond a point because of competition among world powers for influence in the region.   
Sri Lanka should act with deft diplomacy since it is positioned to leverage its location for attraction of investments and enhancement of trade links to get out of the economic crisis. What is needed his thoroughness in global and regional politics coupled with diplomatic skills to navigate the intricacies involved.