Beijing: China praised India on Wednesday for making “great efforts” to assist Colombo in overcoming its worst financial crisis, while rejecting Sri Lankan President Gotabaya Rajapaksa’s claim that Beijing has shifted its strategic focus from South Asia, including Pakistan, to South East Asia, saying the region remains its priority.
Since its independence from Britain in 1948, Sri Lanka has seen extraordinary economic upheaval. The economic crisis in Sri Lanka has sparked political upheaval, with demonstrators calling for President Rajapaksa’s resignation.
“We have also seen that the Indian government has made significant efforts in this regard. We are aware of this “In response to inquiries about whether China, which has made significant investments in Sri Lanka, is hesitant to assist the island nation through its greatest economic crisis, Chinese Foreign Ministry spokesperson Zhao Lijian told a media conference in Beijing.
“We are also eager to engage with India and other members of the world community to assist Sri Lanka and other poor nations in overcoming this issue,” he added.
India has contributed around $3 billion in aid in the shape of line credit and other means to assist Sri Lanka, which has effectively declared insolvency and defaulted on all foreign debts totaling $51 billion, including those from China.
China has promised 500 million RMB (about $73 million) in help for the provision of critical products but has stayed mute on President Rajapaksa’s request to suspend debt repayment and its earlier announcement to evaluate a $2.5 billion lending facility for Colombo.
Beijing looked irritated by Rajapaksa’s statements that China looks to be moving its strategic priority to South-East Asia and Africa, stressing that South Asian nations in financial distress do not receive the same attention from Beijing.
In an interview with Bloomberg on Monday, Rajapaksa stated that Sri Lanka was unable to access a $1.5 billion (credit line from Beijing) and that he has yet to get a response to his request to President Xi Jinping for a $1 billion loan to purchase vital products.
Rajapaksa stated that China has signalled that it will assist Sri Lanka, but added that “normally they don’t like” sending out extra money to repay previous debt obligations.
“My judgement is that China’s strategic priority has switched to South-east Asia,” Rajapaksa stated. “They perceive increased strategic interest in the Philippines, Vietnam, and Cambodia, as well as in the region and Africa.”
“They are less interested in this region,” Rajapaksa explained. “I’m not sure whether I’m correct, and the focus on Pakistan has shifted. That demonstrates that their interest in this situation has changed. Their attention has switched to two other topics “Sri Lanka’s president stated.
Sri Lanka and Pakistan have received the majority of China’s regional investments and loans. While Colombo got around $8-10 billion in Chinese investments and loans, Beijing is presently committed to constructing the $60 billion China Pakistan Economic Corridor (CPEC), which India has criticised as it is being built via Pakistan-occupied Kashmir (PoK).
\ Significantly, both nations are seeking IMF rescue agreements to help them get through the greatest economic crisis in decades.
In response to Rajapaksa’s comments, Zhao stated, “As a traditional, friendly neighbour, China is always closely monitoring the situation in Sri Lanka, and we feel deeply for the current difficulties and challenges faced by the country, and we have been doing our utmost to provide assistance for the socio-economic development of that country.”
While citing RMB 500 million in medical support, Zhao attempted to dismiss Rajapaksa’s views that China has moved its attention away from South Asia, where it has battled aggressively with India to grow its influence.
“Priority for Chinese diplomacy is given to China’s neighbours, notably South Asian countries. China places a great value on fostering excellent neighbourly relations with these nations “Zhao said.
“We have been completely committed to creating such friendship,” he added, highlighting Beijing’s help in natural catastrophes, the global financial crisis, and COVID.
“China has traditionally stood with South Asian countries, working cooperatively to overcome challenges. Under the current conditions, China will continue to collaborate with all relevant parties to construct the BRI, maintain momentum, and provide greater benefits to people in the area “he added.
He stated that China is concerned that South Asian countries are experiencing financial, budgetary, and balance-sheet issues.
“This is connected to the COVID-19 difficulties.” These issues are also related to the crisis between Russia and Ukraine, as well as the subsequent unilateral sanctions put on Russia by the United States and Western nations,” he explained.
“The applicable sanctions have aggravated the food crisis confronting developing nations, as well as their financial troubles worsening matters for their people,” he stated.