The Maldives has signed a deal with a Chinese firm to upgrade its international airport as Chinese President Xi Jinping toured the main island on his first trip to a region that India has long regarded as falling within its natural sphere of influence.
The contract to expand Male airport has been given to Beijing Urban Construction Group after the Maldivian government cancelled a USD$511 million deal with India's GMR Infrastructure two years ago.
India has been concerned about growing Chinese involvement in the Indian Ocean as Beijing opens its wallet and builds a network of ports dubbed the String of Pearls.
Xi was in Male as part of a South Asia tour that will also take him to Sri Lanka and India where he will hold the first summit meeting with India's prime minister Narendra Modi.
"China will encourage more Chinese enterprises to actively engage in the economic transformation of Maldives," Xi said in a statement.
The Maldivian government, however, did not give the Chinese firm the right to operate the airport. The islands' president Abdulla Yameen had said earlier foreign firms will not be given operational rights for security reasons.
"I wish to express my sincere appreciation to President Xi for expressing China's willingness to enhance the provision of development assistance to the Maldives, especially towards mega development projects," Yameen said after talks with the Chinese leader.