China says massive loans did not lead to Sri Lankan crisis
China on Thursday defended its massive infrastructure ventures and investments in Sri Lanka and said that they have “boosted” its economic development, amid criticism from the US that Beijing’s unproductive projects and opaque loan deals were among the reasons for the country’s bankruptcy.
“The China-Sri Lanka practical cooperation has always been led by Sri Lanka with scientific planning and thorough verification with no strings attached,” Chinese foreign ministry spokesman Zhao Lijian told a media briefing here.
“Chinese projects have boosted Sri Lanka’s economic development, and brought tangible benefits to the Sri Lankan people,” he said while responding to a question on the criticism of China’s projects and policies towards Sri Lanka by the USAID administrator Samantha Power.
Speaking in New Delhi on Wednesday, Power said India reacted “really swiftly” with an absolutely critical set of measures to help Sri Lanka tide over its economic crisis, but calls to China to provide significant relief have gone unanswered.
Power said China became one of Sri Lanka’s “biggest creditors” offering often “opaque loan” deals at higher interest rates than other lenders and wondered whether Beijing would restructure the debt to help the island nation.
Refuting her allegations, Zhao said, “there are multiple components to Sri Lanka’sforeign debt, where China-related debts take far less share than the international capital market and multilateral development banks.”
“Besides what China provides for Sri Lanka almost preferential loans with low-interest rates and long terms, which have played a positive part in improving Sri Lanka’s infrastructure and livelihood,” he said.
China’s unproductive projects in Sri Lanka, including the Hambantota port, which Beijing took over on a 99-year lease as a debt swap, have come under sharp criticism.
The unprecedented economic crisis faced by Sri Lanka has led to severe shortages of fuel, cooking gas and medicine and long lines for essential supplies, which led to massive anti-government protests.
China, which accounts for10 per cent of Sri Lanka’s debt, is reported to have resisted offering a debt cut.