Will China help bankrupt Sri Lanka? Beijing says why not
China On Sri Lanka Economic Crisis: China "supports relevant financial institutions in actively discussing debt disposal plans with the Sri Lankan side", Mao Ning asserted.
China said that it would "play a positive role" in helping Sri Lanka as the island nation battles bankruptcy amid a debt crisis after agreeing to restructure its loans. Sri Lanka's unprecedented economic crisis has resulted in acute food, fuel and medicine shortages, along with extended blackouts and huge inflation.
"China is ready to work with relevant countries and international financial institutions to play a positive role in helping Sri Lanka cope with its current difficulties, ease its debt burden and achieve sustainable development," foreign ministry spokesperson Mao Ning said, as per news agency AFP.
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"The Export-Import Bank of China, as the official bilateral creditor, issued a financial assurance letter to Sri Lanka on March 6," Mao Ning further said when asked about Sri Lankan President Ranil Wickremesinghe's statement that Beijing had agreed to help.
China "supports relevant financial institutions in actively discussing debt disposal plans with the Sri Lankan side", Mao Ning asserted. Sri Lanka has been working to secure a much needed IMF rescue package but its debt negotiations with China impacted the talks. China is Sri Lanka's largest bilateral creditor. With Beijing's nod that it would aid Sri Lanka, the final obstacle to the IMF bailout has been removed.
Krishna Srinivasan, director of the IMF's Asia and Pacific Department, said, “Sri Lanka has now received financing assurances from all major bilateral creditors.”