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Sri Lanka To Get a $1 Billion Loan From China

In October, Sri Lanka received orders worth at least $15 million at the China International Import Expo (CIIE)

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Sri Lanka to convert garbage dumps into urban parks
This is a Sri Lankan flag. Sri Lanka to convert garbage dumps into urban parks. wikimedia commons

Sri Lanka will get a $1 billion loan from China, its biggest lender and might sign a free trade agreement with Beijing, becoming the third country to ink such a pact in India’s neighbourhood.

Sri Lankan envoy to Beijing Karunasena Kodituwakku, who made the announcement here, said it was wrong to accuse China of pushing the South Asian island nation into a debt trap.

Sri Lanka will soon sign a concessional loan agreement with the Export-Import Bank of China to borrow $1 billion to fund a major highway from Colombo to its second largest city Kandy, Kodituwakku said on Tuesday at a briefing, apparently only for select media.

The money will be used for the first stage of the central highway and the second stage will be financed by Sri Lankan consortiums and the third by Japanese loans, the Global Times quoted him as saying.

It was not clear if the envoy was talking about the same $1 billion loan which his country’s top bank official said will come from the Export-Import Bank of China.

Sri Lanka is trying to limp back to normalcy after being hit by a deep political crisis last year that plunged the credit rating of the already-indebted country.

The Chinese have made deep inroads into the strategically located nation in the Indian Ocean and have a 100-year lease of the Hambantota Port after Sri Lanka failed to pay back loans.

US clothing brand Gap has apologised for selling T-shirts which it said showed an "incorrect map" of China.
Accurate Map of China, Pixabay

Beijing’s growing presence in Sri Lanka worries India which held considerable clout in the country.

The envoy also said that Sri Lanka was in talks with China on a Free Trade Agreement (FTA).

“They have reached consensus on many issues, but (the agreement) isn’t finalised,” said the Ambassador. “We hope this year will be the critical year to finalize it.”

If materialised, Sri Lanka will be the third South Asian country to sign such a pact after Pakistan and the Maldives.

The new Maldivian government is rethinking on its FTA as it believes that the pact is blindly in favour of Beijing.

Kodituwakku also revealed that Sri Lanka was negotiating with the China Development Bank for short-term loans.

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Image source: youtube.com

He slammed the Western media’s allegations that China’s financial assistance to Sri Lanka had led it into a debt trap.

“We don’t agree with that. China never forced us to take a loan… If there is something wrong with the loans we have taken, it’s our responsibility. It’s not fair to blame China or another country, saying Sri Lanka is a victim,” he said.

He emphasised that it was on Sri Lanka’s request that China provided funds, especially the development assistance.

“This year Sri Lanka has to settle nearly $4 billion, and the country has more than $8 billion in reserves. But we cannot use all that money just to pay back. We have to keep a minimum balance,” he said.

According to the Ambassador, the Colombo port was a very crucial transit port serving India.

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India’s strong economy will prop up the port as a successful entity. He hopes Chinese firms can turn the Hambantota Port into a successful facility.

In October, Sri Lanka received orders worth at least $15 million at the China International Import Expo (CIIE).

“We would like to enhance exports to the Chinese market,” he said, adding the items could include tea, jam, vegetables, fish and natural rubber-based products.

“We also invite more Chinese investors to invest in Sri Lanka. Sri Lankan exports have concessional access to US, Indian and European markets. They can come to take advantage of these opportunities.” (IANS)

Next Story

Google Claims It Has “No Plans” To Relaunch A Search Engine in China

Technology companies have recently been a favorite target of many members of the U.S. Congress, who have criticized them over a wide range of issues such as privacy, work in China and allowing foreign meddling in U.S. elections.

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Google
The Chinese flag is seen near the Google sign at the Google china headquarters in Beijing, China. VOA

The United States’ top general said on Thursday that the Chinese military was benefiting from the work Alphabet Inc’s Google was doing in China, where the technology giant has long sought to have a bigger presence.

“The work that Google is doing in China is indirectly benefiting the Chinese military,” Marine General Joseph Dunford, chairman of the Joint Chiefs of Staff, said during a Senate Armed Services Committee hearing.

“We watch with great concern when industry partners work in China knowing that there is that indirect benefit,” he said.

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Lawmakers and Google employees have raised concerns the company would comply with China’s internet censorship and surveillance policies if it re-enters the Asian nation’s search engine market. Pixabay

“Frankly, ‘indirect’ may be not a full characterization of the way it really is, it is more of a direct benefit to the Chinese military.”

Last year Google said it was no longer vying for a $10 billion cloud computing contract with the U.S. Defense Department, in part because the company’s new ethical guidelines do not align with the project.

In June, Google said it would not renew a contract to help the U.S. military analyze aerial drone imagery when it expires, as the company sought to defuse an internal uproar over the deal.

At the same time, Google said it has “no plans” to relaunch a search engine in China, though it is continuing to study the idea.

During the hearing, Republican Senator Josh Hawley sharply criticized the tech company, referring to it as “a supposedly American company.”

FILE - Sen. Josh Hawley, R-Mo., speaks during a hearing of a Senate Judiciary Committee in Washington, March 6, 2019.
Sen. Josh Hawley, R-Mo., speaks during a hearing of a Senate Judiciary Committee in Washington, March 6, 2019. VOA

Technology companies have recently been a favorite target of many members of the U.S. Congress, who have criticized them over a wide range of issues such as privacy, work in China and allowing foreign meddling in U.S. elections.

Lawmakers and Google employees have raised concerns the company would comply with China’s internet censorship and surveillance policies if it re-enters the Asian nation’s search engine market.

Also Read: India and Pakistan Threaten to Release Missiles at Each Othe

Asked about Dunford’s comments, Google referred to previous statements.

Google Chief Executive Sundar Pichai has previously said the company has invested in China for years and plans to continue to do so, but that the company also was continuing to work with the U.S. government on projects in health care, cybersecurity and other fields. (VOA)