Sri Lanka seeks China’s help in tourism, trade and investment
As it negotiates for an emergency $4 billion package to help it recover from an economic collapse, Sri Lanka has urged China for assistance with trade, investment, and tourism to help it expand sustainably.
The 22 million-person island country is going through its biggest economic crisis since gaining independence in 1948 as a result of running out of foreign reserves. The lack of fuel, food, and medication that brought down the Rajapaksa ruling family has angered protesters.
The fact that China, along with Japan, is one of Sri Lanka’s two biggest foreign creditors explains Ambassador Palitha Kohona’s emphasis on Beijing as a factor in the island nation’s economic recovery. 10% of Sri Lanka’s foreign debt is also held by China.
Additionally, Sri Lanka wants to see more Chinese tourists, whose numbers decreased from 265,000 in 2018 to nearly nothing as a result of the pandemic and suicide attacks in 2019.
Kohona said that Ranil Wickremesinghe, the new president of Sri Lanka, has plans to visit China to discuss cooperation in areas like trade, investment, and tourism.
China is no stranger to Wickremesinghe. In the embassy corridor where Reuters interviews Kohona, a picture of him shaking hands with Chinese President Xi Jinping during his visit to Beijing in 2016 as prime minister is displayed.
Kohona stated that he does not anticipate a significant shift in the new administration’s stance toward China.
As a significant global creditor and many other nations’ financial exposure, he said he understood China’s reluctance in moving rapidly to assist Sri Lanka at this time. Maybe the decision-making would have been lot simpler if Sri Lanka had been the only option.
Sri Lanka has been in negotiations with China for several months on a $4 billion aid package, which included a loan of $1 billion to pay back nearly the same amount of Chinese debt due this year.
A $1.5 billion credit line is also being requested in order to pay for Chinese imports. According to Kohona, the majority of these imports are components like buttons and zippers that his nation’s profitable apparel industry needs.
Additionally, Sri Lanka wants to convince China to start a $1.5 billion bilateral currency swap.
Kohona stated that although the next meeting has not yet been scheduled, talks with China on financial assistance are still ongoing.
This month, the Chinese foreign ministry declared that Beijing is prepared to collaborate with other nations and international financial organisations in order to “play a beneficial role” in aiding Sri Lanka.
In addition to receiving financial aid, Sri Lanka also hopes that China will assist it in acquiring fuel, fertiliser, and other critical goods.
In April and May, China promised to provide Sri Lanka with emergency aid of 500 million yuan ($74.09 million).
Meta: The island nation of Sri Lanka which is undergoing it’s worst economic breakdown has sought China’s assistance in trade, investment and tourism, to bring back the country on its feet