Sri Lanka urges China to restructure debt repayments amid economic downturn

The Presidential Secretariat has called on China to help the debt-stricken president of Sri Lanka rebuild billions of dollars in debt repayment as part of a solution to counter the economic consequences of the coronavirus pandemic. Said.

In a meeting with Foreign Minister Wang Yi, President Gotabaya Rajapaksa said, “If we can pay attention to debt repayment restructuring as a solution to the economic crisis we are facing, it will be a great relief for the country.” COVID-19 pandemic, “said his office. statement..

Rajapaksa also requested that China provide China with a concessional trade credit system for imports from China and help Chinese tourists travel to Sri Lanka under the concept of a biobubble.

Sri Lanka is reported to have to meet about $ 4.5 billion in debt repayments this year, starting with the $ 500 million government bond repayment on January 18.

Inflation in the country reached a record high of 11.1% in November last year, and food inflation rose to 16.9 in November 2021. data Announced by the Central Bank of Sri Lanka. The rise in prices was triggered by the depreciation of the local currency, which fell 7.5% against the US dollar last year.

The government then declared an economic emergency under the Public Safety Ordinance and appointed service commissioners essential to regulate food prices charged by merchants and retailers.

It is unclear whether China has not yet agreed with Sri Lanka’s request.

China is considered the fourth largest lender in Sri Lanka after the international financial markets, the Asian Development Bank and Japan.

Over the last decade, China has lent more than $ 5 billion to Sri Lanka on highways, ports, airports and coal-fired power plants. However, critics have accused the money of being used for a low-profit white elephant project, which China has denied.

Sri Lanka is also an important part of Beijing’s Belt and Road Initiative. This is a long-term plan to fund and build the infrastructure that connects China and the world, but other countries, including the United States, call Sri Lanka a “debt trap.” A small country.

In December 2017, the Sri Lankan government leased the entire Hambantota Harbor to China for 99 years, converting $ 1.4 billion of unpaid loans into equity, which has led tens of thousands of protesters to oppose the deal. did.

Former US Secretary of State Mike Pompeo also warned Sri Lanka about the deal with Beijing, calling the Chinese Communist Party a “predator” who continues to violate land and sea sovereignty.

“We know from bad land and sea transactions, sovereignty violations, and lawlessness that the Chinese Communist Party is a predator and the United States is coming in another way. We are friends and partners. “It’s coming,” Pompeo said at a 2018 joint press conference in Sri Lanka.

Sunny Chao and Reuters contributed to this report.

Aldograph Redley


Aldgra Fredly is a Malaysia-based freelance writer featuring the Epoch Times Asia Pacific News.