{"id":92255,"date":"2022-05-21T09:43:10","date_gmt":"2022-05-21T09:43:10","guid":{"rendered":"https:\/\/websitedesigns.com.au\/elankanew\/?p=92255"},"modified":"2022-05-21T09:44:02","modified_gmt":"2022-05-21T09:44:02","slug":"china-becomes-wild-card-in-sri-lankas-debt-crisis-by-bharatha-mallawarachi-2","status":"publish","type":"post","link":"https:\/\/websitedesigns.com.au\/elankanew\/china-becomes-wild-card-in-sri-lankas-debt-crisis-by-bharatha-mallawarachi-2\/","title":{"rendered":"China becomes wild card in Sri Lanka’s debt crisis – by BHARATHA MALLAWARACHI"},"content":{"rendered":"

China becomes wild card in Sri Lanka’s debt crisis – by BHARATHA MALLAWARACHI<\/strong><\/span><\/h1>\n

China says its initiative to build ports and other infrastructure across Asia and Africa, paid for with Chinese loans, will boost trade<\/span><\/p>\n

\"China
FILE- Sri Lankan auto rickshaw drivers queue up to buy petrol near a fuel station in Colombo, Sri Lanka, Wednesday, April 13, 2022. China says its initiative to build ports and other infrastructure paid for with Chinese loans across Asia and Africa will boost trade. But in a cautionary tale for other borrowers, Sri Lanka’s debt to Beijing threatens to hold back efforts to resolve a financial crisis so severe that this Indian Ocean nation cannot import food or gasoline. (AP Photo\/Eranga Jayawardena, File) The Associated Press<\/span><\/figcaption><\/figure>\n

Source:<\/strong>abcnews.go.com<\/a><\/span><\/span><\/p>\n

Sri Lanka\u2019s struggle is extreme, but it reflects conditions across dozens of countries from South Pacific islands through some of the poorest in Asia and Africa that have signed onto Chinese President Xi Jinping\u2019s Belt and Road Initiative. The total debt of poor countries is rising, raising risks others might run into trouble.<\/span><\/p>\n

Sri Lanka and other poor Asian countries welcome Chinese financing. The Asian Development Bank says the region needs to invest $1.7 trillion a year in infrastructure to keep economies growing. But some, including Sri Lankan critics of their government\u2019s spending, say Chinese-led projects cost too much or do too little for their economies.<\/span><\/p>\n

China ranks third among Sri Lanka’s creditors after Japan and the ADB and accounts for 10% of the debt, but Xi\u2019s government has an outsize potential to disrupt a settlement.<\/span><\/p>\n

Beijing promised to \u201cplay a positive role\u201d in talks with the International Monetary Fund on a possible emergency loan. China offered to lend more but balked at joining a process that might cut Sri Lanka\u2019s debt, possibly for fear other Belt and Road borrowers that owe tens of billions of dollars will demand the same relief.<\/span><\/p>\n

\u201cIf China gives a concession to Sri Lanka, it will have to give the same concession to other borrowers,\u201d said economist W.A. Wijewardena, a former deputy governor of the Sri Lankan central bank. \u201cThey didn\u2019t want to get into that trouble.\u201d<\/span><\/p>\n

If China tries to avoid debt cuts, that might disrupt the IMF talks or prompt private sector creditors to hold out for more money, experts say.<\/span><\/p>\n

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