These days, President Ranil Wickremesinghe is making an effort to talk to the Chinese President over the phone. Ranil wants China to change the debt restructuring letter sent to Sri Lana. Chinese Embassy sources say that because the Chinese President is busy, it has been difficult to give Ranil an opportunity to speak to him, but the Chinese President congratulated Ranil as soon as Ranil became the President.
It has been difficult for Ranil to talk to the Chinese president. Perhaps the Chinese position regarding debt restructuring has been clearly stated in the Chinese President’s letter, which was handed over to Ranil by the Chinese delegation to Sri Lanka. But Ranil’s sources say that if he gets a chance to talk to the Chinese President personally, he will be able to change the Chinese position.
Ranil and the Chinese president know each other. During 2015–2019, when Ranil was the Prime Minister, he went to China and met the Chinese President. It was at that time that negotiations began about the agreement to lease the Hambantota port to China. Ranil wanted to lease the Hambantota port to China to cut off the loan taken from China to build the Hambantota port. But a Chinese think tank pointed out to the Chinese government that it was disadvantageous for China. In the end, China did not agree to cut off the loan given to Hambantota Port. China instead promised to pay US $ 1.12 billion for Hambanthota port lease agreement and give another loan on top of this.
At this time, the government of Maithri and Ranil had a problem with repaying foreign debt. Ranil liked the Chinese proposal. It is not a favorable proposal for Sri Lanka, but a proposal that will involve Sri Lanka in another debt trap. Ranil’s Hambantota Port Leasing Agreement with China was promoted in Sri Lanka, as China would cut off the loan given to build the port. But what has happened is that in addition to the loans taken to the port, there is now more debt owed to China.
When Ranil became president and asked to restructure China’s debt, China told the same old story. That is to say that China agrees to give another loan to pay the Chinese debt. Ranil did not agree to the Chinese proposal because it was not accepted by the IMF. China has since agreed to a two-year debt moratorium. But the IMF disagrees with that.
Looking at this history, it is clear that not only Mahinda but also Ranil have made mistakes in dealing with China. Mahinda took a loan from China for a port that could not generate revenue. Ranil took another loan from China and leased the port to China. This shows that China has taken both of them for a ride.