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Sino – SL diplomatic consultations conclude with optimism on debt deal

By: Staff Writer

June 20, Colombo (LNW): China is ready to continue providing assistance to Sri Lanka’s socio-economic development, supporting the country’s debt sustainability, the Chinese Foreign Ministry has said.

Sri Lankan President Ranil Wickremesinghe has also embraced Beijing’s position on key issues, including the AUKUS security alliance between Australia, the United States, and the United Kingdom, which he has labeled a “mistake,” and the term “Indo-Pacific,” which he has called an “artificial framework.”

He is proceeding cautiously during an election year for Sri Lanka. Colombo’s deals with Beijing, including the latter’s 99-year lease on the Hambantota International Port, have led to increased anti-China sentiment in the country in recent years.

 In thi backdrop China is ready to continue providing assistance to Sri Lanka’s socio-economic development, supporting the country’s debt sustainability, the Chinese Foreign Ministry has said.

China’s Foreign Ministry Spokesperson Lin Jian responded to a question by reporters on the progress of reaching a final agreement between Sri Lanka and China’s Exim Bank and the China Development Bank.

“Chinese side has been providing assistance to Sri Lanka’s socioeconomic development to the best of our capability. We stand ready to continue to work with relevant countries and international financial institutions to support Sri Lanka’s debt sustainability,” he said, declining to comment further.

The question came after Sri Lanka and China concluded the 13th round of diplomatic consultations in Beijing, with the participation of Secretary of Foreign Affairs of Sri Lanka, Aruni Wijewardane, and Vice Minister of Foreign Affairs of the People’s Republic of China, Sun Weidong.

Both governments said that a range of matters, including debt restructuring, were discussed; however, they specified no details on reaching an in-principle deal.

China is Sri Lanka’s largest bilateral creditor and has indicated willingness to restructure external debt amounting to approximately US$37 billion.

President Ranil Wickremesinghe has expressed optimism this week that Sri Lanka will soon reach agreements with its official bilateral creditors, including India, Japan, and France.

China, however, did not join the official creditors’ platform, which negotiated the common debt treatment plan with Sri Lanka.

Sri Lanka’s actions may be driven by a commitment to strategic autonomy, but its motivations are as much about practicality as principle.

The country is emerging from an acute economic crisis, and it needs as much financial assistance as it can get. It’s easier to achieve that goal when it works with all the major powers.

It’s not coincidental that China, India, and the United States were three of Sri Lanka’s most generous donors during its crisis.

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