According to Agence France-Presse, Sri Lanka’s tourism-based economy has been hit hard by the CCP virus epidemic, and foreign exchange reserves have bottomed out, which has led to shortages of basic materials and rationing of food in supermarkets. Since there is no foreign exchange to import crude oil to generate electricity, Sri Lanka has begun to implement power curtailment on the 8th.
The report said that China is Sri Lanka’s largest bilateral lender, and Wang Yi’s visit came as international credit rating agencies warned Sri Lankan President Gotabaya Rajapaksa’s government was on the verge of debt. after default.
According to Sri Lankan government data, as of April 2021, China accounted for about 10% of Sri Lanka’s foreign debt. The country’s debt to China would be even higher if it included loans from state-owned enterprises and the central bank. At the end of November last year, Sri Lanka’s foreign exchange reserves were only US$1.5 billion, which was only enough to pay for one month’s import costs.
“The President stressed that, given the economic crisis brought on by the Covid-19 pandemic, it would be a great comfort to be able to reschedule debt payments,” the Sri Lankan President’s Office said in a statement. .”
However, the Chinese embassy in Colombo has not commented on the request.
Liabilities to China by April 2021 account for about 10 percent of Sri Lanka’s $35 billion foreign debt, according to Sri Lankan government data. Officials said the total amount of Chinese loans to Sri Lanka could be higher when loans from state-owned enterprises and the central bank are included.
It is reported that during the 10-year period ending in 2015, Sri Lanka,Lending heavily to the CCP under the CCP’s “One Belt, One Road” initiative. The president at the time was Mahinda, the brother of the current president, Gotabaye Rajapaksa. He started building a lot of infrastructure with great ambitions, but some of the construction ended up being “white elephants” (expensive but useless things).
Sri Lanka was forced to lease the port to a Chinese company for 99 years in 2017 after it was unable to repay the 1.4 billion loan owed to build the southern port.
The United States and India have warned that Sri Lanka’s Hambantota port, which is located on an important east-west international shipping route, could allow China to gain a military foothold in the Indian Ocean. Colombo and Beijing have dismissed claims that Sri Lankan ports will be used for military purposes.
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