Two of China's largest port operators and engineering firms have agreed to invest in a $601 million terminal in Sri Lanka's Hambantota port, part of a series of deals signed during a visit by President Xi Jinping to the island nation.
Keen to establish its presence in the Indian Ocean, China has spent millions of dollars building ports and roads across the region in a strategy dubbed the String of Pearls.
China Merchants Holdings said in a statement late on Tuesday that it and China Harbor Engineering Company (CHEC), a subsidiary of China Communications Construction Group , had entered a joint venture with the Sri Lanka Ports Authority to develop and operate a container terminal for the Hambantota Port Development.
China Merchants and CHEC would hold a 65 percent share in the joint venture and the two firms were still discussing their investment ratios in the deal, the statement added.
China Merchants, the country's biggest port operator by container volumes, along with rival COSCO Pacific have been expanding abroad, taking advantage of the global shipping slump which has forced countries and firms to offload assets.
Last year, China Merchants bought a 49 percent stake in port operator Terminal Link SAS from French shipping firm CMA CGM for 400 million euros and purchased a 23.5 percent share in Africa's Port de Djibouti S.A. for $185 million.
Copyright Reuters 2014.