New Delhi, July 27 -- What US Ambassador Alaina Teplitz warned in 2021 is now playing out in Sri Lanka. Last week, a violent clash between two Chinese gangs in the Chinese-backed Colombo Port City left one man dead. Investigators are probing possible links to Chinese Triad networks, among the largest criminal syndicates in China, notorious for drug trafficking, illegal gambling, racketeering, human smuggling, and other transnational crimes.

Teplitz had cautioned during discussions on special legislation for the Port City, which many feared could turn the project into a money-laundering haven. "Unintended consequences could be creating a haven for money launderers and other sorts of nefarious actors to take advantage of what was perceived...