Wednesday, May 31, 2023

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China offers support for new SL President amidst US experts doubts

Sri Lanka is seeking US$ 5 billion emergency loan facility from China during the past several months but to no avail up to now although Chinese President Xi Jinping has pledged support the country’s new President Ranil Wickremasighe,foreign affairs analysts claimed.

They noted that the latest Chinese pledge of support extended to the island nation following US intelligence agency expert ‘s claim of of high-debt Chinese investment as a factor in Sri Lanka’s economic collapse.

CIA chief Bill Burns has said that high-debt Chinese investment was a factor in Sri Lanka’s economic collapse, saying it should serve as a warning to other nations.

Sri Lanka will need $5 billion over the next six months to ensure basic living standards, and is renegotiating the terms of a yuan-denominated swap worth $1.5 billion with China so as to fund essential imports, President Ranil Wickremasighe disclosed recently .

The island nation’s worst economic crisis in seven decades led to a shortage of foreign exchange that stalled imports of essential items such as fuel, medicine and fertiliser, provoking devaluation, street protests and a change of government.

Chinese President Xi Jinping says he is hopeful that Sri Lanka and China will carry forward the traditional friendship, consolidate political mutual trust and push forward the strategi cooperative partnership of sincere assistance and ever-lasting friendship.

He conveyed this in a letter to Sri Lanka’s new President Ranil Wickremesinghe to extend congratulations and best wishes on his new appointment.

In his letter, the Chinese President said he believes that under the leadership of his Sri Lankan counterpart, the island nation will be able to overcome temporary difficulties and advance the process of economic and social recovery.

He said “he attaches great importance to the development of China-Sri Lanka relations, and am willing to provide support and assistance to the best of my ability for you and the Sri Lankan people in your efforts.”

Meanwhile US CIA chief Bill Burns on Wednesday blamed “dumb bets” on high-debt Chinese investment as a factor in Sri Lanka’s economic collapse, saying it should serve as a warning to other nations.“

The Chinese have a lot of weight to throw around and they can make a very appealing case for their investments,” Burns said at the Aspen Security Forum.

But nations should look at “a place like Sri Lanka today — heavily indebted to China — which has made some really dumb bets about their economic future and are suffering pretty catastrophic, both economic and political, consequences as a result.

China has invested heavily in Sri Lanka — strategically located in the Indian Ocean and off India, often seen as a rival of Beijing — and worked closely with former president Gotabaya Rajapaksa.

Rajapaksa fled the country and resigned last week in the face of mass protests over dire economic conditions, with the island nearly exhausting its supply of food and fuel.

Sri Lanka has borrowed heavily from China for infrastructure projects, some of which ended up as white elephants.

In 2017, Sri Lanka was unable to repay a $1.4 billion loan for a port construction in the south of the country and was forced to lease out the facility to a Chinese company for 99 years.

Near the port is the Rajapaksa Airport, built with a $200 million loan for China, that was so sparingly used that at one point it was unable to cover its electricity bill.

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