Beijing: Watching warily the spiralling violence in Sri Lanka, China on Wednesday declined to comment on the resignation of Prime Minister Mahinda Rajapaksa, who paved the way for Beijing’s substantial strategic investments in the island nation, but called on the government and Opposition parties to close ranks to deal with the crisis.
Sri Lanka is currently facing the worst economic crisis and political instability ever after Independence due to manifold reasons both short and long-term.
As per PTI, skirting questions on Rajapaksa’s resignation under mounting protests followed by a wave of unprecedented attacks on his properties and that of his supporters forcing him to flee to a naval base in eastern Sri Lanka, the Chinese Foreign Ministry spokesman Zhao Lijian told a media briefing here “we have noted the latest developments in Sri Lanka”.
“We hope that the Sri Lankan government, as well as the Opposition parties in the country, will bear in mind the fundamental interests of their country, stay united and secure the economic and political stability in that country at an early date”, he said.
Mahinda Rajapaksa, 76, resigned as Sri Lankan Prime Minister on Monday amid unprecedented economic turmoil, hours after his supporters attacked anti-government protesters, prompting authorities to impose a nationwide curfew and deploy Army troops in the capital.
Sri Lankan President Gotabaya Rajapaksa will have talks on Wednesday with the ruling party dissidents and the main Opposition SJB to end the political impasse after the resignation of prime minister Mahinda.
Former prime minister Mahinda Rajapaksa is a well-liked Sri Lankan leader in China for promoting large-scale Chinese investments in the island nation disregarding India’s security concerns and the US criticism and warnings over Beijing’s “debt-trap diplomacy” in the strategically located Indian Ocean island.
Chinese Foreign Minister Wang Yi during his meeting with Mahinda Rajapaksa in Colombo in January showered praise on him saying that “you are an old friend to the Chinese people. You paid six visits to China. We hold this special friendship dear and this story will be enshrined in the history of China-Sri Lanka relations”.
During Rajapaksa’s tenures, China has made deep inroads into Sri Lanka securing the Hambantota port, built in the hometown of Rajapaksa on a 99-year lease for a debt swap after it incurred heavy losses. It was seen as Beijing’s attempt to secure a foothold in the Indian Ocean where it already has a military base at Djibouti in the Horn of Africa.
A number of China’s other investments in Hambantota drew criticism for causing enormous expenditure contributing to the bankruptcy of the country.
As Sri Lanka defaulted on USD 51 billion foreign debt with most of its forex reserves drained out, the expansive Chinese build infrastructure projects which included a disused USD15.5 million conference centre at Hambantota and Rajapaksa Airport built with a USD 200 million loan were being showcased as projects that drained public exchequer for that lack of utility.
Also with the government desperately trying to secure long-term IMF funding to recover from the complete bankruptcy, the future of the much-touted Chinese funded Colombo Port City project to build an artificial 665-acre island to set up an international financial hub also hangs in balance.
As per the recent data carried by the state-run Chinese media, 10 per cent of Sri Lanka’s USD 51 billion debt belongs to China.
Weeks before his resignation, Mahinda Rajapaksa spoke to Chinese Premier Li Keqiang for assistance and his younger brother and President Gotabaya Rajapaksa urged visiting Chinese Foreign Minister Wang Yi last December to reschedule Sri Lanka’s debt owed to China.
Earlier, Beijing announced about USD 33 million (200 million yuan) assistance to Sri Lanka but is so far silent about its Ambassador to Colombo Qi Zhenhong’s statement that China is considering a USD 2.5 billion credit facility to Sri Lanka.
The Beijing-based Asian Infrastructure Investment Bank (AIIB) is reportedly considering a USD 100 million loan for Colombo.
While maintaining silence on Sri Lanka’s debt deferment, Qi was quoted in the Sri Lankan media criticising Sri Lanka’s decision to approach the Washington-based International Monetary Fund (IMF).
Qian Feng, director of the research department at the National Strategy Institute at Tsinghua University said under the current uncertainty in Sri Lanka, Chinese enterprises will be more cautious in the long run when considering investment and expansion in projects.
Qian stressed that prospects for cooperation between China and Sri Lanka are still good, and the two sides are complementary in many aspects, but the current priority for Sri Lanka is to overcome the difficulties.
Liu Zongyi, secretary-general of the Research Centre for China-South Asia Cooperation at the Shanghai Institutes for International Studies, told the daily that the political factor depends on the ruling party’s attitude towards cooperating with the Chinese enterprises.
This will significantly affect the local business environment, although the overall prospect for Chinese enterprises remains positive.
Liu said that the influence of regional and global powers will also be an important factor. For instance, the US and India have formed a joint posture against China in South Asia, so further cooperation between China and other South Asian countries, including Sri Lanka, might be disrupted.