{"id":81884,"date":"2022-05-03T06:00:00","date_gmt":"2022-05-03T11:00:00","guid":{"rendered":"http:\/\/www.shotinthedark.info\/wp\/?p=81884"},"modified":"2022-05-02T20:24:24","modified_gmt":"2022-05-03T01:24:24","slug":"do-you-want-china-as-your-loan-shark","status":"publish","type":"post","link":"http:\/\/www.shotinthedark.info\/wp\/?p=81884","title":{"rendered":"Do you want China as your loan shark?"},"content":{"rendered":"\n

Monday we took a look at the unfolding economic crisis in Sri Lanka. Yesterday then, some news<\/a> that India heaved a life vest into the water, while China tied a concrete block to it…<\/p>\n\n\n\n

Sri Lanka has extended a credit line with India by $200 million in order to procure emergency fuel stocks, the country’s power and energy minister said on Monday, as China said it supported efforts for the island nation to restructure its debt.

Colombo was also in talks with New Delhi over extending the credit line by an additional $500 million, minister Kanchana Wijesekera told a news conference, with four fuel shipments due to arrive in May.

Beijing’s ambassador Qi Zhenhong told Sri Lankan Finance Minister Ali Sabry at a meeting on Monday that China – one of the island’s largest bilateral lenders having extended about $6.5 billion in loans – supports its decision to work with the IMF to restructure its debt.

“Ambassador Zhenhong also assured Minister Ali Sabry that as a major shareholder of the IMF, China is willing to play an active role in encouraging the IMF to positively consider Sri Lanka’s position and to reach an agreement as soon as possible,” Sri Lanka’s finance ministry said in a statement.<\/p><\/blockquote>\n\n\n\n

In other words, China is saying “Sri Lanka, you’re already into us for six and a half large. Before we send more good money after bad, you can go to the IMF, but as for what you owe us, we’ll see if we can come to an “agreement.””

In return for China playing the role of angel investors, what sort of repayment might China look for from Sri Lanka?

On the southern tip of Sri Lanka, China helped finance and build the Hambantota Port project. The port opened in 2010. Often cited as an example of China’s “debt trap” approach to its victims, er, partners, China lent truckloads of money to Sri Lanka in the decade that followed, and in 2017, China Merchants Port was granted 70% of the port, as well as a 99 year lease.

The port is part of China’s so-called “string of pearls,” a chain of China-financed ports stretching from Africa to Gwadar to Sri Lanka and around SE Asia and up to Hong Kong.

In addition to that, China is building and financing the Colombo Port City in the capital city, on the west side of Sri Lanka. The project, on reclaimed land, is meant to be an international finance and economic center. It will be interesting to see if China pushes for outright ownership of one or both of these projects as Sri Lanka’s ability to pay its debt plunges.

On Tuesday, the Chinese Embassy in Sri Lanka tweeted this. <\/p>\n\n\n\n

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To support #SriLankan<\/a> people at this trying times, #China<\/a> has decided to provide another 300 million RMB of aid to #SriLanka<\/a> for the urgently needed drugs, food and fuels etc., which increases the total emergency grant from China to 500 million RMB (approximately 76 million USD). pic.twitter.com\/uk1NY91nDy<\/a><\/p>— Chinese Embassy in Sri Lanka (@ChinaEmbSL) May 2, 2022<\/a><\/blockquote>