China is inching closer to Sri Lanka as well. Recently, Sri Lanka allocated an exploration block in the Mannar Basin to China for exploration of petroleum resources. This allocation would imply Chinese presence just a few kilometres from India's southern tip, thus causing strategic discomfort. In economic terms, it would also mean the end of the monopoly held by Indian oil companies in this realm, putting them into direct and stiff competition from wealthy Chinese oil companies. It should be noted that the Chinese are already present at Hambantota on the southern coast of Sri Lanka, where Beijing is building bunkering facilities and an oil tank farm. This infrastructure will help service hundreds of ships that traverse the sea-lanes of commerce off Sri Lanka. The Chinese presence in Hambantota would thus be another vital element in its strategic circle already enhanced through its projects in Pakistan, Myanmar and Bangladesh.
