According to a media report, China has announced that it wants to offset the debt owed by Sri Lanka to China through China’s projects in Sri Lanka.
Also, the media reported that the Sri Lankan government may accept this as a way to resolve the Chinese debt issue, which has been a major issue in Sri Lanka’s economic crisis.
China has not agreed to restructure $9.95 billion in loans to Sri Lanka, meaning it does not want to extend the repayment period.
Major regions of Sri Lanka
In this situation, instead of delaying the loan payment, they have said that they will bring the Chinese projects in Sri Lanka under their control.
Meanwhile, China wants to control Sri Lanka’s ports, airports, international conference halls, stadiums, highways, power plants, Lotus Tower and many other structures.
It is noteworthy that they include Nuraicholai Power Plant and Mattala Airport, which are important in supplying power to Sri Lanka.
Foam plant
For the construction of the foam plant, $155 million has been received for the first phase, $300 million for the second phase and $891 million for the third phase.
Also, there is the $214 million Morocco Development Project and several irrigation projects.
In world politics, it is clear that China does not want to restructure the loan given to Sri Lanka because of Sri Lanka’s clear loyalty to the anti-China camp.
Global Sri Lankan Government Sri Lanka has friendly relations with countries like India, USA, European countries and Japan. At the same time, in addition to diplomatic relations, it has also been revealed that China is not happy with Sri Lanka’s dealings with the International Monetary Fund.
50% more Chinese loans
Most of Sri Lanka’s loans have come from China. More than 50 percent of Sri Lanka’s debt is Chinese debt.
As a result, Chinese debt restructuring is critical to Sri Lanka’s debt stabilization, which means that China must agree to extend the repayment period of its loan installments.
The International Monetary Fund (IMF) has said it will not support Sri Lanka in restructuring its IMF loans until Sri Lanka’s debt to China is restructured.
As a result, the newspaper pointed out that it will be difficult to resolve the crisis until negotiations with China are clearly concluded.