This news article explains China’s growing interest in the economic crisis Sri Lanka has been experiencing for several years. According to this article China is interesting in negotiating “a medium and long-term debt disposal plan with the country in a friendly manner, and do its best to promote Sri Lanka’s debt sustainability” (Adaderana.lk) Although this sounds very noble for China to help Sri Lanka, it has ulterior motives. In the past recent years, there has been an increase in Chinese investors along the coastline of Sri Lankan ports and beaches. Chinese investors have been facilitating in the growth of the beaches and ports in Colombo (Aljazeera). The Chinese led projects in Sri Lanka are labeled “white elephants” because they “cost a lot but has no useful purpose” (cambridge dictionary).

The loan agreement with China would give Sri Lanka a longer time to repay loans and this would “ease short-term debt pressure” (Adaderana.lk). Chinese observers blame the US interest rate increase, food security and global energy crises to cause the economic issues in Sri Lanka. China wants Western nations to take responsibility and achieve a more “fair and just” resolution.

Sri Lanka’s financial crisis has not only drawn the attention of the Chinese but also the IMF, World Bank and 20 nations chair members to discuss the global sovereign debt led by India in a virtual meeting. The discussions led to blaming China, although their has been a slow pace in finding some sort of debt relief initiative for Sri Lanka.

The Chinese, Western nations, IMF, World Bank members, and other nations are playing the blame game. China wants to assist immediately because of direct financial interests, by attempting to build large infrastructures in Columbo with the possibility of little return.

I wonder how the IMF and World Bank will react if Sri Lanka accepts the offers presented by China? Is China in the right in this situation to blame the Western nations and US?

HR: https://www.aljazeera.com/economy/2023/2/17/sri-lankas-chinese-built-port-city-stirs-white-elephant-fears (for background information), google, Cambridge dictionary, grammarly

Susanna A. Kirchman

To news source, linked below:

https://www.adaderana.lk/news/88525/china-already-offers-sri-lanka-debt-extension-foreign-ministry