China pledged to support Sri Lanka through “difficult times” while renewing its commitment to developing the island country’s largest trading ports through the Belt and Road Initiative as Colombo continues to battle a crippling economic crisis.
In a meeting between visiting Chinese vice-minister for foreign affairs Sun Weidong and Sri Lankan Foreign Secretary Aruni Wijewardane, the two sides reaffirmed their commitment to the belt and road, China’s multibillion-dollar infrastructure connectivity plan linking Asia, Europe and Africa.
“China is willing to work with Sri Lanka to strengthen exchanges at all levels and cooperation in various fields, and promote the comprehensive development of two flagship projects, Colombo Port City and Hambantota Port,” Sun said on Tuesday, according to the Chinese foreign ministry.
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Since the end of a 26-year civil war in 2009, China has invested billions of dollars into Sri Lanka’s infrastructure.
Colombo Port City, also known as Colombo International Financial City, is a 269-hectare (665-acre) project in the capital. It was launched in 2014 and marked for completion in 2041, with a total expected investment of US$15 billion. In May, state-owned China Merchants Group announced it would invest in a large logistics complex at the port, with an estimated construction cost of US$392 million.
The South Asian country’s next largest port is Hambantota International Port, which has been on a 99-year lease to China Merchants Port since a US$1.1 billion deal was signed in 2017. The shipping company operates the port and is developing 6,070 nearby hectares into an economic zone.
Sun said Beijing would also expand cooperation with Colombo in the areas of finance, investment, energy, logistics and tourism. Sri Lanka’s embassy in China and its tourism ministry last week held a conference to promote interest among Chinese tourists. Over 1 million Sri Lankans depend on tourism for their livelihood, the authorities said.
Since 2019, the island country has been faced with high fiscal deficits, unprecedented levels of inflation and price surges for basic commodities, among other political challenges. Colombo announced it would suspend foreign debt payments last April because of depleted reserves.
At the time, the country’s foreign debt totalled US$34.8 billion, with nearly half from market borrowing, and its largest lenders were the Asian Development Bank, China and the World Bank.
But Colombo is looking to kick-start its economic recovery after the default. An online meeting initiated by creditor nations Japan, India and France was held in early May, with China attending as an observer.
Sun said China would “continue to firmly support Sri Lanka in safeguarding its sovereignty, independence and territorial integrity, support the Sri Lankan government and people in collectively improving and overcoming difficult times, and support Sri Lanka in exploring a development path that suits its own national conditions”.
Sun, who also met Sri Lankan Prime Minister Dinesh Gunawardena on Tuesday, is expected to wrap up his visit on Thursday.
According to the Sri Lankan foreign ministry, Wijewardane expressed appreciation for China’s help during the “challenging period” and sought China’s support in expanding Sri Lankan exports to China, especially in Ceylon cinnamon, seafood, fruit, vegetables and gemstones.
According to the Observatory of Economic Complexity, a site for international trade data, Sri Lanka’s exports to China increased from US$1.95 million in 1995 to US$491 million in 2021 at an average annual rate of 23.7 per cent.
“During the consultations, Sri Lanka and China pledged to further consolidate bilateral ties for the mutual benefit of the peoples of the two countries,” the Sri Lankan foreign ministry’s statement concluded.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.
Source : Yahoo Finance