BEIJING: China reiterated on Tuesday that it is trying its “most” to provide aid to Debt-ridden Sri LankaEven though Beijing maintained a steadfast silence on Colombo’s request for debt rescheduling as well as promising $2.5 billion in aid.
Troubled by a major foreign exchange crisis, Sri Lanka on Tuesday suspended the servicing of external public debt pending the completion of its discussions with the International Monetary Fund (IMF) and preparation of a comprehensive debt restructuring program covering the obligations.
Sri Lanka’s finance ministry said the policy would be effective for all international bonds, all bilateral loans except swaps between a central bank and a foreign central bank, all loans with commercial banks and institutional lenders.
Asked about Sri Lanka’s alleged request for monetary help from China to deal with the current crisis, Chinese Foreign Ministry spokesman Zhao Lijian on Tuesday reiterated his ministry’s earlier remarks that China is doing its best for Sri Lanka and Will continue to do so.
“Since the establishment of diplomatic relations between China and Sri Lanka, the two countries have extended mutual support and understanding to each other,” Zhao told a media briefing here.
Reiterating what his ministry had said on March 9, he said, “China is making every effort to provide support for the socio-economic development of SL and we will continue to do so.”
Last month, China acceded to Pakistan’s request to rollover $4.2 billion loan repayments to provide a major relief to its all-weather ally battling a major economic crisis.
Although there was no official announcement of this, the then Foreign Minister of Pakistan Shah Mehmood Qureshi Said this after talks with his Chinese counterpart Wang Yi during his visit to China on 30 March.
Beijing has yet to respond to the Sri Lankan president’s request last December Gotabaya Rajapakse To reschedule the loan given by his country to China.
China is also silent on last month’s announcement by Chinese Ambassador Qi Zhenhong that China is considering a $2.5 billion line of credit to Sri Lanka.
The QE announcement came close to India’s announcement of extending a $1 billion line of credit as part of its financial aid to help Sri Lanka tide over the economic crisis.
India in February extended a $500 million loan to Sri Lanka to help it purchase petroleum products.
“Sri Lanka has sought $2.5 billion, which includes $1.5 billion of buyer credit. It (the request) is under consideration,” Qi told reporters here.
“The two countries now have to discuss how the loan and the buyer’s credit will be used,” he said.
Qi, however, did not give a direct answer to a question whether China would restructure Sri Lanka’s debt.
In his meeting with Chinese Foreign Minister Wang Yi in Colombo in December, Rajapaksa raised Sri Lanka’s deepening foreign exchange crisis and rising foreign debt and sought Beijing’s assistance.
Rajapaksa said it would be a big relief for Sri Lanka if restructuring of loan repayments could be looked into as a solution to the economic crisis caused by the COVID-19 pandemic.
It is estimated that Sri Lanka owes China debt in the region of USD 1.5 to 2 billion this year. China’s total debt and investment in Sri Lanka over the years was estimated at over $8 billion.
China’s acquisition of the Hambantota port on a 99-year lease for a $1.2 billion debt swap drew international concerns over Beijing securing strategic assets away from home by providing huge loans and investments to smaller countries.
The Hambantota port, along with the Colombo port city project, where China is building a new city with reclaimed land in the sea, was viewed with particular concern in India, as Beijing found its footing in Sri Lanka, a strategically placed Indian Located in the ocean.
Troubled by a major foreign exchange crisis, Sri Lanka on Tuesday suspended the servicing of external public debt pending the completion of its discussions with the International Monetary Fund (IMF) and preparation of a comprehensive debt restructuring program covering the obligations.
Sri Lanka’s finance ministry said the policy would be effective for all international bonds, all bilateral loans except swaps between a central bank and a foreign central bank, all loans with commercial banks and institutional lenders.
Asked about Sri Lanka’s alleged request for monetary help from China to deal with the current crisis, Chinese Foreign Ministry spokesman Zhao Lijian on Tuesday reiterated his ministry’s earlier remarks that China is doing its best for Sri Lanka and Will continue to do so.
“Since the establishment of diplomatic relations between China and Sri Lanka, the two countries have extended mutual support and understanding to each other,” Zhao told a media briefing here.
Reiterating what his ministry had said on March 9, he said, “China is making every effort to provide support for the socio-economic development of SL and we will continue to do so.”
Last month, China acceded to Pakistan’s request to rollover $4.2 billion loan repayments to provide a major relief to its all-weather ally battling a major economic crisis.
Although there was no official announcement of this, the then Foreign Minister of Pakistan Shah Mehmood Qureshi Said this after talks with his Chinese counterpart Wang Yi during his visit to China on 30 March.
Beijing has yet to respond to the Sri Lankan president’s request last December Gotabaya Rajapakse To reschedule the loan given by his country to China.
China is also silent on last month’s announcement by Chinese Ambassador Qi Zhenhong that China is considering a $2.5 billion line of credit to Sri Lanka.
The QE announcement came close to India’s announcement of extending a $1 billion line of credit as part of its financial aid to help Sri Lanka tide over the economic crisis.
India in February extended a $500 million loan to Sri Lanka to help it purchase petroleum products.
“Sri Lanka has sought $2.5 billion, which includes $1.5 billion of buyer credit. It (the request) is under consideration,” Qi told reporters here.
“The two countries now have to discuss how the loan and the buyer’s credit will be used,” he said.
Qi, however, did not give a direct answer to a question whether China would restructure Sri Lanka’s debt.
In his meeting with Chinese Foreign Minister Wang Yi in Colombo in December, Rajapaksa raised Sri Lanka’s deepening foreign exchange crisis and rising foreign debt and sought Beijing’s assistance.
Rajapaksa said it would be a big relief for Sri Lanka if restructuring of loan repayments could be looked into as a solution to the economic crisis caused by the COVID-19 pandemic.
It is estimated that Sri Lanka owes China debt in the region of USD 1.5 to 2 billion this year. China’s total debt and investment in Sri Lanka over the years was estimated at over $8 billion.
China’s acquisition of the Hambantota port on a 99-year lease for a $1.2 billion debt swap drew international concerns over Beijing securing strategic assets away from home by providing huge loans and investments to smaller countries.
The Hambantota port, along with the Colombo port city project, where China is building a new city with reclaimed land in the sea, was viewed with particular concern in India, as Beijing found its footing in Sri Lanka, a strategically placed Indian Located in the ocean.