Lawmakers in the Maldives have voted to allow foreign ownership of land for the first time, triggering concern over a possible landgrab by China in the strategic Indian Ocean region.
Dozens of foreign companies already run luxury resorts on islands that they lease from the government of the honeymoon islands for a maximum of 99 years.
The new law, which has yet to be ratified by the president, would allow foreigners who invest more than USD 1 billion to own land in perpetuity, provided 70 per cent of it is reclaimed from the Indian Ocean.
The bill passed easily on Wednesday after a brief debate, with 70 members voting in favour and 14 against, the assembly said in a statement.
But opposition lawmakers expressed fears that the move could clear the way for the Chinese to set up bases in the Maldives, which straddles vital international east-west shipping routes.
Regional superpower India is already wary of increased Chinese involvement in the area, which it considers to be within its sphere of influence.
Opposition Maldivian Democratic Party MP Eva Abdulla said she feared the nation could become a frontline for a potential power struggle between India and China.
"We can't ignore the fact there is a cold war brewing between India and China," Abdulla told AFP by telephone from the capital island Male.
"What is in our interest is peace and stability in the Indian Ocean. India is our neighbour and we are not a country in the South China Sea," she said referring to China's dispute with several countries over claims to the area.
The government has said the move would not threaten the Maldives' sovereignty and was needed to attract large-scale foreign investment for projects.
The Maldives is seeking aid and investment from Beijing to build a 1.4 kilometre bridge linking Male with the nearby airport island.
Ahead of the vote, President Abdulla Yameen's half brother Maumoon Abdul Gayoom -- the country's former strongman leader -- had urged further public debate on the controversial move.
"I have appealed to (the) president to seek public opinion on proposed constitutional amendment re land ownership before ratification," he tweeted.
The Maldives, made up of 1,192 tiny coral islands scattered across the equator, has been plagued by political unrest since the toppling of the country's first democratically elected president Mohamed Nasheed in February 2012.
