Sri Lanka assures China of continued active participation in Belt and Road Initiative

Cash-strapped Sri Lanka has a total foreign debt of USD 46.9 billion, 52 per cent of which is owed to China, its largest lender

Colombo: Debt-ridden Sri Lanka has assured China of its continued active participation in the controversial Belt and Road Initiative during the recent visit of President Ranil Wickremesinghe to Beijing.

Wickremesinghe visited China from October 16 to 20 to attend the third Belt and Road Forum for International Cooperation hosted by Chinese President Xi Jinping.

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“Sri Lanka reiterated it will continue to actively participate in the Belt and Road Initiative proposed by China,” according to the joint statement issued on Friday.

Cash-strapped Sri Lanka has a total foreign debt of USD 46.9 billion, 52 per cent of which is owed to China, its largest lender.

The Belt and Road Initiative (BRI), the pet project of Chinese President Xi, has been facing criticism from the US, India and several other nations as often the loans amounting to billions of dollars for unsustainable projects under the mega global infrastructure initiative turn out to be debt traps for smaller countries like Sri Lanka, driving them into a deep economic crisis.

The joint statement said the two sides agreed to sign the Memorandum of Understanding on jointly accelerating the formulation of the cooperation plan on BRI.

“While Sri Lanka welcomed the Chinese enterprises playing a positive role in its economic development and more investment from Chinese enterprises, China will continue to encourage Chinese enterprises to invest in Sri Lanka,” it said.

“The Colombo Port City and the Hambantota Port are signature projects of Belt and Road cooperation between the two countries,” the statement noted.

Interestingly, the concerns over the BRI projects grew louder after China took over Sri Lanka’s Hambantota Port on a 99-year lease as a debt swap in 2017.

On Sri Lanka’s debt restructuring, the statement said, “China will continue to support its financial institutions in conducting friendly consultation with Sri Lanka to reach early agreement on treatment of debts related to China.” China is willing to work with relevant countries and international financial institutions to keep playing a positive role in helping Sri Lanka address its current difficulties, alleviate debt burden and realise sustainable development, it said.

India had pitched in with about USD four billion in assistance to Sri Lanka to immediately tide over its worst economic crisis and helped the island nation to access the International Monetary Fund (IMF) bailout package.

According to the joint statement, Sri Lanka has reaffirmed its commitment to the one-China principle and sees Taiwan as an inalienable part of China’s territory.

Colombo reiterated that it supports the efforts by the Chinese government to safeguard its sovereignty and territorial integrity, and opposes any form of “Taiwan independence”, it said, adding that China firmly supports Sri Lanka in upholding its independence, sovereignty and territorial integrity, and supports the island nation’s independent choice of development path that suits its national conditions.

This year marks the completion of 10 years of BRI. India is steadfast in its criticism of the BRI, especially its flagship the USD 60 billion China-Pakistan Economic Corridor (CPEC) being laid through Pakistan-occupied Kashmir (PoK) overriding New Delhi’s sovereignty concerns. India had stayed away from the Belt and Road Forum for International Cooperation held last week.