China turns its back on Sri Lanka economic crisis: Report

China refused to assist Sri Lanka which appealed to reschedule its huge Chinese debt burden in the face of the Covid19 outbreak that has adversely affected the tourism sector said a media reportColombo appealed if a restructuring of the debt could be arranged to mitigate the economic crisis that had arisen in the face of the Covid19 outbreakPresident of Sri Lanka GotabayaRajapaksa in a meeting with Foreign Minister of China Wang Yi sought the assistance of Beijing in the face of the deepening foreign exchange crisis of Sri Lanka and spiralling external debtReplying to a question on the pending request from Sri Lanka for a debt relief Foreign Ministry spokesman of China Zhao Lijian said in a news conference this monththat China had been providing assistance for the socioeconomic development of Sri Lanka to the best of its ability and would continue to do so In concrete terms this meant nothing the hong Kong post reportedChina has shed some crocodile tears over the economy of Sri Lanka getting caught in a quagmire after hobnobbing with the BRI projects of China record inflation soaring food prices and the sufferings of the people said a media reportThe key concern however is how such a negative situation would impact the attitude of Colombo towards borrowings from Chinaand what it would mean for the ultimate relation between China and Sri Lanka There is concern that the experience of Sri Lanka is prompting countries like Myanmar Malaysia and Nepal to suspend Chinese investment projects it addedThough the crisis in Sri Lanka was apparent after the pandemic that dried up the international tourist traffic to the island nation one of its main foreign exchangeearners the countrys debts spiralled and foreign exchange reserves shrunk as the end result of reckless borrowings from China to finance infrastructure projects reported The Hong Kong PostWith tourism hit by the pandemic the economic structure of Sri Lanka which was already tottering under the heavy burden of loans crumbled A major part of this debt was owed to China which accounts for nearly USD 8 billionThis debt burden was a result of Chinas Belt and Road Initiative BRI projects like Hambantota Port and Colombo Port City for which Chinese agencies lent large amounts to Sri Lanka under stiff terms of repaymentNotably in 202122 Colombos debt repayment to Beijing amounted to nearly USD 2 billion Further Hambantota port has already been leased out to China for 99 years against USD 12 billionIn the face of the deepening foreign exchange crisis Sri Lanka President Gotabaya Rajapaksa sought Chinas help in December 2021 as he requested a debt restructuring in a meeting with China Foreign Minister Wang Yi However Beijing has reportedly shown Colombo the door according to the media outletIronically the deeply proChina Rajapaksa government dug its own grave as it had booted out the Millennium Challenge Corporation MCC of the USA with its offer to extend developmental assistance grant to Colombo as the Board of Directors of MCC discontinued its USD 480 million contract with Sri Lanka in December 2020 due to lack of partner country engagement the publication reported citing the US embassyFurther Chinaassisted projects in Sri Lanka are likely to deepen the indebtedness of the island nation Moreover locals of Sri Lanka are protesting against some of these projects which will affect their livelihoodOne of these projects is an industrial park attached to the Hambantota International Port which has incited violent protests by local people as they fear that the area would become a Chinese colony reported the media outletGiven the current crisis coupled with the absence of any assurances from China for concrete support Sri Lanka seems to be reassessing the extent to which it can bank on ChinaHowever it is nearly impossible for Rajapaksas to deny China its committed space in Sri Lanka due to arbitration threats and likely obligations It is an economic annexation of a sovereign country and not a debt trap aloneThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever