Sri Lanka Prime Minister Dinesh Gunawardena, on Wednesday (Mar 27) announced that China will help the island nation build its strategic deep sea port and an airport in the capital city of Colombo. The two countries also signed nine new agreements amid Sri Lanka’s efforts to restructure and revive its bankrupt economy.
Gunawardena said China would “assist” Sri Lanka in restructuring its external debt, which is a key condition for the $2.9 billion International Monetary Fund (IMF) bailout and also offered “assistance to develop” Colombo International Airport and Hambantota port.
Sri Lanka PM’s visit
The Sri Lankan PM is in the midst of a crucial six-day visit to China – the island’s biggest bilateral creditor – during which he met with Chinese President Xi Jinping and Premier Li Qing.
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China has yet to respond to the debt restructuring assistance claim made by Gunawardena’s office since the plans have not been made public, reported news agency AFP.
The Sri Lankan PM’s office said that the Chinese premier had promised Beijing would “assist Sri Lanka’s debt restructuring process continuously and help Sri Lanka to develop its economy.”
China has offered “assistance to develop” Colombo International Airport and Hambantota port, said a statement from Gunawardena’s office.
Hambantota, in southern Sri Lanka, was handed to a Chinese state-owned company in 2017 on a 99-year lease for $1.12 billion.
The move has since sparked security concerns in India with New Delhi saying that the port could be used by Chinese research vessels for espionage.
However, Sri Lanka has maintained that their ports will not be used for any military purposes.
Xi reaffirms ties
During his meeting with Gunawardena, Xi reportedly called for the consolidation of friendly relations between China and Sri Lanka and said that Beijing is willing to work with Colombo to carry forward the spirit of the Rubber-Rice Pact.
He also called on Sri Lanka to join hands to advance their strategic cooperative partnership featuring sincere mutual assistance and ever-lasting friendship, according to an official statement.
China is Sri Lanka’s largest bilateral lender and owned 52 per cent of the $40 billion external debt when Colombo announced its sovereign default in 2022.
The Sri Lankan PM’s visit came days after the IMF concluded its second review of the $2.9 billion bailout.
(With inputs from agencies)
