Sri Lanka has commissioned the first of three new container terminals in Colombo, backed by investment from China - which wants to enhance its presence in the world's busiest shipping lane.
The $500m (£325m , €376m) Colombo International Container Terminal (CICT) is designed to handle very large ships, and its facilities will be on par with those available at established ports such as Singapore and Dubai.
The investment - by state-run China Merchants Holdings (International) - will help China secure another maritime supply route, building on a string of major investments over the past 18 months.
In January, China inked a deal to acquire the Pakistani port of Gwadar. Beijing is also developing a $14m 'dry port' in the Nepalese city of Larcha, near Tibet, and has funded the development of a $450m deep-sea port at the southern Sri Lankan city of Hambantota, which opened in June last year.
"For China to maintain economic growth at home, they also need to go out and secure their supply routes. In that sense, coming to Colombo is a strategic commercial investment," AFP quoted Rohan Masakorala, an independent shipping expert and a former secretary-general of the Singapore-based Asian Shippers Council, as saying.
China Merchants Holdings will operate CICT for 35 years and the state-run Sri Lanka Ports Authority (SLPA) will step in afterwards.
Chinese funds account for about 85% of the total $2.5bn being spent on the expansion of the Colombo port, with investors targeting a 100% increase in capacity over the next seven years.
Sri Lanka is spending heavily on developing infrastructure to attract foreign investments to its war-ravaged economy. China and India have both funded several projects across the island, part of the government's $6bn post-war overhaul of roads, railways, ports and power plants.
Although ministers in Delhi remain concerned about the growing Chinese influence on the island, Sri Lanka insists that CICT will serve the interests of India, whose major ports at Cochin and Tuticorin are both too shallow for mega vessels.
Priyath Bandu Wickrama, the chairman of the Sri Lanka Ports Authority, told AFP that CICT will enable Indian shippers to dock big ships closer home, as opposed to routing goods through Singapore or Dubai.