China and the Maldives Upgraded Their Relationship

At the invitation of President Xi Jinping, President of the Republic of Maldives Mohamed Muizzu paid a historical visit to China from January 8 to 12. He is the first foreign head of state to visit China in 2024. It is also President Muizzu’s first state visit to a foreign country since he took office last November.

As part of the state visit, President Muizzu and President Xi led the official talks between the Maldivian and the Chinese government. The official talks followed the signing of 20 key agreements between the two countries in the presence of President Muizzu and President Xi. Both counties also elevated bilateral ties to a comprehensive strategic cooperative partnership.

President Muizzu expressed gratitude for China’s significant role in the economic success of Maldives and for China’s generous assistance in social housing, higher education, and infrastructure development of Maldives. President Muizzu also explored avenues for expanding tourism cooperation and air connectivity between the two countries. President Muizzu also said his government was keen to explore partnerships under the Belt and Road Initiative (BRI), including the expansion of the country’s central airport and commercial port.

The agreements signed included tourism cooperation, the development of 30,000 housing units in Rasmale, assistance for construction of a 100-bed tertiary hospital in Vilimale, permission for Maldives’ national airline, Maldivian, to undertake domestic operations within China as part of a free trade agreement, disaster prevention, marine development, green technology, strengthening investment in the digital economy and the advance of the high-quality construction of the BRI.

One of President Muizzu’s most prominent engagements during this visit was, attending and speaking at the Invest Maldives Forum at the Fuzhou Strait International Convention and Exhibition Centre in Fuzhou. At the forum, he laid out his government’s vision for developing the Maldives as one of engagement, partnership building, and focused delivery.

This vision clearly shows that Maldives wanted to boost economic diversity. The Covid-19 pandemic has shed renewed light on the importance of diversifying its economy. The Covid-19 has brought Maldives tourism to a standstill and affected the strong economic growth driven by luxury tourism.

Therefore, Maldives is looking for a reliable partner who can support its vision to diversify its economy. This is the reason, recent visit to China is seen as significant. China remains one of the closest allies and developmental partners of Maldives. President Muizzu also in his address to the Maldives Business Forum said that “China remains one of our closest allies and development partners.”

The friendly relations between China and Maldives have a long history and began as early as in China’s Ming Dynasty (1368-1644) with frequent trips and thriving businesses. Today, ancient Chinese porcelainware and coins unearthed locally are on display in the National Museum in Male, which bears witness to the friendly interactions between the two countries.

China and Maldives established diplomatic relations in 1972. Since then, the relations further evolved with increased economic and diplomatic engagements. China and Maldives signed the Free Trade Agreement (FTA) in 2017. China-Maldives FTA is the 16th FTA China has ever signed, and it is Maldives’s first bilateral FTA with a foreign country.

Maldives also became a partner of BRI in 2014. Under the BRI, China and the Maldives have strengthened cooperation and Maldives has benefited from BRI in several aspects including significant infrastructure projects which brought tangible benefits to locals.

The China-Maldives Friendship Bridge (Sinamale Bridge), Velana International Airport upgrade and expansion project, Laamu Link Road Project / China Link Road and the housing construction programme are some of the successfully completed BRI projects in Maldives.

According to data released by the Maldives Tourism Ministry recently, the third-largest market for Maldives tourism in 2023 is China. The highest number of visitors to the Maldives were from India, with 209,198 arrivals, followed by Russia in second place with 209,146 arrivals, and China in third place with 187,118 arrivals.

However, China was the largest tourism contributor in 2019, recording an annual total of 284,029 arrivals, making up 17 percent of the total foreign tourist arrivals for that year. Before the pandemic, China had consistently been one of the top three strongest source markets for Maldives and no doubt that soon China will again become number one market. Wealthy Chinese tourists have shown a growing interest in visiting the Maldives.

In addition to tourism, trade between Maldives and China also shows a steady growth. In the first 11 months of 2023, China-Maldives bilateral trade soared 75.2 percent to reach $700 million. The current FTA with China will allow the Maldives to export 296 items of fish and processed seafood products duty-free.

However, at present the Maldives does not produce 296 seafood products, but has the opportunity to import seafood that is not available in the Maldives and re-export it after processing them. Clearly the FTA with China creates many economic opportunities for the Maldives, especially in exporting and re-exporting fish products. Therefore, further cooperation with China, which will make the Maldivian economy more diversified with increasing trade and jobs.

Facts show that close cooperation between China and Maldives has brought win-win results to the Maldives and tangible benefits to the Maldivian people. Maldivians are eager for high-quality infrastructure development and economic improvements especially in tourism, marine development, green technology and digital economy. Beyond any doubt, the elevation of China-Maldives relations will bring more development opportunities to the Maldivian as well as to the Indian Ocean region.

The article reflects the author’s opinions, and not necessarily the views of China Focus.