China Says Its Massive Loans, Projects Didn’t Drive Sri Lanka Out of Bankruptcy

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China on Thursday defended its huge infrastructure projects and investments in crisis-stricken Sri Lanka and said they had ‘boosted’ its economic development, amid criticism from the United States over Beijing’s unproductive plans and the opaque loan agreements among the reasons for the country’s bankruptcy. .

“China-Sri Lanka practical cooperation has always been led by Sri Lanka with scientific planning and thorough verification without any strings attached,” Chinese Foreign Ministry spokesman Zhao Lijian told a conference. Press.

“Chinese projects have boosted Sri Lanka’s economic development and brought tangible benefits to the people of Sri Lanka,” he said when answering a question about criticism of China’s projects and policies towards Sri Lanka. by USAID Administrator Samantha Power.

Speaking in New Delhi on Wednesday, Power said India had reacted “very quickly” with an absolutely essential set of measures to help Sri Lanka overcome its economic crisis, but calls for China to provide significant relief went unanswered.

Power said China had become one of Sri Lanka’s ‘biggest creditors’, often offering ‘opaque loan’ deals at higher interest rates than other lenders and questioned whether Beijing would restructure debt to help the island nation.

Refuting his claims, Zhao said that “there are multiple components to Sri Lanka’s external debt, where China-related debts take much less share than the international capital market and multilateral development banks.” “In addition to what China provides to Sri Lanka, almost preferential loans with low and long-term interest rates, which have played a positive role in improving Sri Lanka’s infrastructure and livelihoods” , did he declare.

China’s unproductive projects in Sri Lanka, including the port of Hambantota, of which Beijing took over a 99-year lease in exchange for debt, have come under heavy criticism.

The unprecedented economic crisis facing Sri Lanka has led to severe shortages of fuel, cooking gas and medicine and long queues for essential supplies, leading to massive anti-government protests and ousting of President Gotabaya Rajapaksa this month.

China, which accounts for 10% of Sri Lanka’s debt, reportedly resisted the offer of debt relief.

He also sought to blame US policies, including interest rate hikes, unilateral sanctions and massive stimulus policies that had badly hit many developing countries like Sri Lanka.

“I want to stress that global economic and financial markets have weighed heavily as recent surges in interest rates and the shrinking of the US balance sheet have siphoned off dollars faster, in contrast to US policy. long-standing quantitative easing and irresponsible massive stimulus,” he said.

Without referring to the Russian-Ukrainian war, Zhao also blamed US sanctions.

”Unilateral US sanctions and tariff barriers have undermined the security of industrial chains and aggravated soaring prices for energy, food and other raw materials. This has further worsened the financial and economic situation of many developing countries, including Sri Lanka,” he said.

(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)

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