China’s loans are not causing problems for Sri Lanka - official

China says that co-operation with Sri Lanka is ‘equal and mutually beneficial’ and that it is not targeting any third party or setting a “debt trap”.

“It is not tenable to claim that China’s loans are causing problems for Sri Lanka,” Zeng Rong, the Spokesman to the Chinese Embassy in the UK said.

This was stated in a letter issued in response to an article published on the Financial Times with the title “Sri Lanka turmoil points to China’s increasing role” (November 16) which had claimed that China is “becoming a supplier of political instability” and sets a “debt-trap” for Sri Lanka and other countries.

The spokesman said that China and Sri Lanka have long been friendly neighbours that always support each other in their major and core interests. The co-operation between the two countries is win-win and mutually beneficial, he said.

Such co-operation has delivered tangible benefit to the people of Sri Lanka, he added.

“China is not competing with any country to seek so-called regional dominance. China-Sri Lanka co-operation is equal and mutually beneficial. It is not targeting any third party or setting a “debt trap”,” he said.

He stressed that by 2017, China’s loans to Sri Lanka accounted for only about 10 per cent in Sri-Lanka’s foreign debts, while Japan accounts for 12 per cent, and the Asian Development Bank 14 per cent.

“It is not tenable to claim that China’s loans are causing problems for Sri Lanka,” Zeng Rong said.

The letter further reads:

By the end of 2017, Chinese companies had completed more than $15bn worth of infrastructure projects in Sri Lanka in transportation, water, electricity, ports and other fields, giving a strong boost to its economic development.

The Puttalam Power Station provided about 40 per cent of the nation’s electricity supply, reducing the power price by 25 per cent. The completion of Colombo-Katunayake Expressway has brought great convenience to travellers and contributed to local tourism. The Colombo International Container Terminal, a China-Sri Lanka joint venture, enhanced the overall operational capacity of the Port of Colombo. According to the Port Connectivity Index compiled by Drewry (UK based shipping and maritime consultancy), the Port of Colombo ranked 13th in the world and number one in South Asia in 2017.

The Colombo Port City under construction and the Hambantota Port and Industrial Zone are expected to become the new powerful engines for Sri Lanka’s economic take-off. Furthermore, China-Sri Lanka pragmatic co-operation has created more than 100,000 jobs for Sri Lanka and trained tens of thousands of technical and management personnel.