THE DRAGON HAS NO TEETH:

China has spared no effort to make friends with Sri Lankan President Mahinda Rajapaksa. The island nation has more than $4 billion worth of Chinese-backed investments, including a $1.4 billion project now under construction of offices, hotels, apartment buildings, and shopping centers on reclaimed land in Colombo that is the largest foreign investment in the country's history. The leading provider of loans to Sri Lanka, China is also financing a $1.3 coal power plant and $1 billion highway.

For Chinese President Xi Jinping, who visited in September, cozying up to Rajapaksa has been a twofer. Building a Chinese presence in the country helps further Xi's ambitions to build a "maritime Silk Road" expanding China's reach in the Indian Ocean. [...]

Those pesky voters in Sri Lanka, though, have gotten in the way of China's plans to use the island as a thorn in the side of India. The news from the island nation shows that when it comes to choosing a reliable ally in Sri Lanka, Xi may have been done in by democracy. Rajapaksa, who called an election two years earlier than necessary, has just lost his reelection bid to challenger Maithripala Sirisena. Rajapaksa had reason to be confident: He presided over the end of the civil war and the subsequent peace dividend that helped boost economic growth above 7 percent. Sri Lanka's benchmark stock index jumped 23 percent last year.

Still, former ally Sirisena was able to capitalize on worries of many Sri Lankans concerned about the incumbent's tilt toward China. "There's a perception that the Chinese are underpinning misgovernance and corruption in the regime," Paikiasothy Saravanamuttu, executive director of the Colombo-based Centre for Policy Alternatives, told Bloomberg News before the election.

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