The impact of China - India competition on infrastructure investment in Africa and South Asia: The cases of Ethiopia and Sri Lanka

Abstract

This paper focuses on two illustrative cases: Sri Lanka and Ethiopia. The paper aims to shed light on how initiatives such as China’s Belt and Road Initiative (BRI), India and Japan’s Asia-Africa Growth Corridor (AAGC) shape the foreign policy and economic development of these countries. The findings show that China has a huge advantage in terms of investment scale, especially through projects such as the Hambantota Port in Sri Lanka and the Grand Ethiopian Renaissance Dam (GERD) in Ethiopia, but raised concerns about public debt and strategic dependency. India, by contrast, seeks to exert influence through smaller-scale projects that emphasize technical and cultural cooperation, despite challenges posed by limited resources. The rivalry between China and India has created opportunities for infrastructure development but also poses risks of power imbalances and regional conflicts of interest.