China is helping Sri Lanka out of ‘debt trap’ – envoy

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China is helping Sri Lanka come out of a “debt trap” and has led the island towards development by constructing ports, roads and water conservancy projects that improve people’s livelihood, Chinese Ambassador Cheng Xueyuan said.

Speaking at a dialogue on China-Sri Lanka Pragmatic Cooperation with Sri Lankan journalists and academics on Tuesday, Cheng said that according to an annual report of Sri Lanka’s Central Bank and Ministry of Finance, by the end of 2018 Sri Lanka’s total foreign debt volume was about 52 billion U.S. dollars, 6 billion of which was from China, making up only 11.5 percent of the total debt.

He said in many cases, the Sri Lankan government was using low interest rate loans from China to repay the ones of much higher rate from Western countries and this helped Sri Lanka come out of a “debt trap.”

Cheng said China-Sri Lanka relations have been renewed and pushed forward steadily and smoothly under the guidance of China’s Belt and Road Initiative and it had entered a rising period in history.

“China has become the largest partner to Sri Lanka in terms of foreign investment, contracting construction, tourist volume, and foreign aid. China-Sri Lanka friendship and cooperation is gradually becoming a cross-political party, cross-nationality consensus,” Cheng said.

China was also a significant partner in generating investment to rebuild Sri Lanka after the end of its civil war in 2009 and more recently, China responded with speed and determination in the aftermath of the April 21 terror attacks by sending aid and security assistance, he added.