“[Muizzu] spoke on the long-standing relationship between the Maldives and China, which dates back to the ancient Maritime Silk Road. He stated that China remains one of the closest allies and developmental partners of Maldives,” the readout said.
Observers believe that Beijing and Malé’s engagement will focus mainly on economic issues, including China’s support for the Maldives’ pillar tourism industry and a renewed push for the belt and road programme.
But they added that the Maldives’ dependency on India, which traditionally had great influence in South Asia, could not be challenged.
New Delhi would continue to observe Muizzu’s further approach in case of potential competition with the world’s second-largest economy, they said.
Lin Minwang, the deputy director of the Centre for South Asian Studies at Fudan University, said that for China engagement with Beijing-friendly Muizzu meant China’s investment could be “viewed objectively”.
“The current government [of the Maldives] has reversed the previous government’s attitude towards China and the [belt and road programme] … this is positive for China. At least the new president can regard the project objectively.”
Under the Belt and Road Initiative, China helped the Maldives to build landmarks such as the expansion of the Velana International Airport, and the building of the cross-sea China-Maldives Friendship Bridge (Sinamalé Bridge) connecting Malé and neighbouring Hulhulé Island.
Former New Delhi-friendly president Solih accused China’s infrastructure initiative of saddling the Maldives with excessive debt and promoting government corruption.
During Solih’s term from 2018, China’s investment in the islands slowed or even decreased even though Chinese-led projects in the Maldives were not cancelled or suspended, according to China’s Ministry of Commerce.
Meanwhile, the China-Maldives free trade agreement that was signed during the presidency of Abdulla Yameen (2013-18) did not come into effect because of Solih’s policy on China.
Lin said there could be a push for an effective FTA regime under Muizzu, adding that belt and road projects could possibly be resumed.
Aditya Gowdara Shivamurthy, an associate fellow at the Delhi-based think tank Observer Research Foundation (ORF), said it was expected the Maldives would ask China for help with its tourism recovery and to aid its sluggish financing status by investing and easing the debt in belt and road projects.
“There is a dire need for additional money and financing. Maldives’ economy is in real bad shape and Muizzu is expecting to continue his everyday operations and fulfil his electoral promises through external support,” he said.
China has surged ahead of Russia to be the largest contributor of tourists to the Maldives in July, the first time since the Covid-19 pandemic. China has long been the largest visitor contributor in the island state before the pandemic.
But the Maldives also faces debt problems like its South Asian neighbour Sri Lanka, where China is also the biggest actor. The China Development Bank, the Industrial and Commercial Bank of China and the Export-Import Bank of China hold more than 60 per cent of Maldives’ sovereign debt, according to the data from the Maldives’ Ministry of Finance.
New tilt for Maldives: toward China, away from US’s Indo-Pacific ally India
New tilt for Maldives: toward China, away from US’s Indo-Pacific ally India
Because of the Covid-19 pandemic, China has been continuously conducting debt suspension to the Maldives under the bilateral and G20 framework since 2020.
“Muizzu needs to [do] debt restructuring. Chinese loans are quickly maturing and Maldives is running out of foreign reserves – due to commercial and external borrowing. The Sri Lankan episode is a grim reminder of the necessity of debt restructuring for Maldives,” Gowdara Shivamurthy said.
As the leader of the People’s National Congress – a party that has pushed a political campaign called “India out” for years – Muizzu has called for less connection with the South Asian powerhouse. However, he is likely to downplay hostility to New Delhi while in office, observers said, adding that China was not an option to replace India’s dominant influence in the Maldives.
In 2022, China was the Maldives’ second largest trading partner with a share of 15.9 per cent of its total trading volume, surpassing India, which was the third largest with 13.7 per cent of Maldives’ trade. Oman is the biggest trading partner with the islands, according to open data patrol TrendEconomy.
But Lin said India’s influence on the Maldives went beyond the economy and was “not only geographic, but also cultural, and historical”, a role he said China could not yet replace.
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Chinese President Xi Jinping unveils 8-point vision for nation’s Belt and Road Initiative at forum
Chinese President Xi Jinping unveils 8-point vision for nation’s Belt and Road Initiative at forum
“Muizzu has been deemed pro-China by many. But the fact is that he has done nothing to antagonise India yet, and more importantly, he hasn’t done anything to calm India’s anticipations,” Gowdara Shivamurthy said.
Muizzu suspended an agreement signed in 2019 allowing India to conduct hydrographic surveys in Maldivian waters that was intended to help New Delhi understand information such as sea floor topography and water depth.
Gowdara Shivamurthy said India was still observing the new administration and exploring ways to collaborate and cooperate for the next five years.
“India also has its benefits – the island nation is still dependent on India for imports, development assistance, security, education, health, etc,” he added.
Meanwhile, as Washington continues to promote an Indo-Pacific security agenda, the Maldives, an Indian Ocean island country, may become a power battleground after the US established an embassy in Malé last year.
Calling India’s Modi ‘clown’, ‘terrorist’ gets Maldives officials suspended
Calling India’s Modi ‘clown’, ‘terrorist’ gets Maldives officials suspended
Last week, Malé’s foreign minister Moosa Zameer spoke with US Secretary of State Antony Blinken by phone, vowing to cooperate on defence and other matters in the Indo-Pacific region.
But Gowdara Shivamurthy said the US would prefer India take the lead in cooperation with the Maldives.
Lin, on the other hand, said the Indian Ocean was not China’s priority and Beijing was not promoting the Maldives as a security focus.
