China denies claims it uses “debtbook diplomacy” with Sri Lanka

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China has denied claims it uses “debtbook diplomacy” with Sri Lanka and insisted that all agreements are based on a mutual understanding.

Speaking to the media in Colombo today, the Chinese Ambassador to Sri Lanka, Cheng Xueyuan said that all loan requests are first assessed by China and then approved based on bilateral agreements reached between China and the respective country.

A recent report presented to the US State Department had claimed that the Chinese Government is leveraging billions of dollars in debts to gain political leverage with developing countries across Asia and the Pacific including Sri Lanka.

The independent report, written by a pair of Harvard University scholars, identified 16 countries targeted by the Chinese Government for “debtbook diplomacy, ” with Pakistan, Djibouti and Sri Lanka identified as being most vulnerable.

The Chinese Ambassador however said that the interest charged on the loans are based on market rates and not higher.

The Ambassador also noted that most loans given by China to Sri Lanka come with a long grace period.

Ambassador Cheng Xueyuan said that China will continue to provide assistance to Sri Lanka adding that Sri Lanka is an important partner with China in the Belt and Road joint construction.

He also noted that as of the end of 2017, Chinese companies have completed more than US$15 billion infrastructure projects in Sri Lanka such as transportation, water, electricity, ports and other fields, and made great contributions to the economic and social development of this country.

“Sri Lanka has a superior geographical location and a broad development prospect. The Sri Lankan Government and people have also drawn the “Sri Lankan dream” of achieving national progress, economic development, ethnic unity, and religious harmony. This is consistent with the idea of the Belt and Road Initiative and the goal of building a community with a shared future for mankind. As one of the first countries to openly support the BRI, Sri Lanka is an important partner with China in the Belt and Road joint construction,” he said.

Meanwhile, Minister of Development Strategies and International Trade Malik Samarawickrama, who was also present at the media conference, said that Sri Lanka and China have maintained very cordial relations for centuries.

“We have been with each other during good times and bad. Right now the relationship between China and Sri Lanka are excellent. I would also like to thank the Government of China for actively participating in the economic development of Sri Lanka,” he said.

The Minister also said that there are a lot of investment projects undertaken by China in Sri Lanka, not only from the Government but also from the Chinese private sector.

“We have received many inquiries from state hold enterprises as well as the private sector. We have also received many applications to set up a cement plant, rubber based industries etc. All of it will be signed within the next two or three months,” he said.

He said that China is sincerely looking to improve the economy of Sri Lanka and with their assistance he has no doubt Sri Lanka will be a better country in the near future. (Colombo Gazette)

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