Sri Lanka looks to restructure $8 bn China debt
Sri Lanka’s prime minister will seek to restructure some of the cash-strapped island’s $8 billion Chinese debt, Colombo said Thursday, as he met his Chinese counterpart in Beijing. As it faces a spiralling debt crisis that has forced it to seek a bailout from the IMF, Sri Lanka’s government is hoping to convert some of its loan burden into stakes in infrastructure projects. Prime Minister Ranil Wickremesinghe also hopes to resolve a dispute over a $1.4 billion Chinese-built “Port City” in the Sri Lankan capital, State Enterprise Development Minister Eran Wickramaratne told reporters in Colombo. The premier will seek to negotiate a $125 million government compensation claim from a Chinese firm over delays to the massive land reclamation project, Wickramaratne said. The project represents the biggest single foreign investment received by the island and will add 233 hectares (575 acres) of real estate in the congested capital. But it has been controversial as Beijing has been accused of seeking to develop facilities around the Indian Ocean in a “string of pearls” strategy to counter the rise of rival India and secure its own economic interests. Sri Lanka’s president suspended the plan shortly after taking power in January last year, before recommending last month that it be resumed. Chinese foreign ministry official Xiao Qian told reporters after a meeting between Wickremesinghe and China’s Premier Li Keqiang that both sides agreed to “speed up” the project.