-By Diplomatic Correspondent
(Lanka-e-News -18.March.2025, 10.40 PM) China became the first bilateral creditor to finalize a debt restructuring agreement with Sri Lanka in October 2023, restructuring USD 4.2 billion in loans. Despite this significant gesture of goodwill, the Sri Lankan public remains largely unaware of China’s role. Unlike other nations, China does not engage in loud proclamations of its assistance, instead choosing to operate discreetly and confidently.
China’s strategic outlook remains unwavering even amidst global uncertainties. The Chinese government remains confident that the upheaval caused by former U.S. President Donald Trump’s unpredictable policies toward Russia, Western Europe, and the rest of the world will not derail its long-term objectives. During a recent meeting at the Chinese embassy in Colombo, the embassy reiterated Foreign Minister Wang Yi’s stance that China’s strong and stable relationship with Russia would remain unaffected by external pressures.
At a media briefing on March 14, the Chinese embassy, led by Ambassador Qi Zhenhong, discussed both bilateral ties with Sri Lanka and China’s broader global strategy. The meeting, which covered China’s government work report, emphasized China’s commitment to shared development with key partners, including Sri Lanka.
China’s economic strength continues to be a central pillar of its global influence. The Chinese embassy highlighted several key economic achievements for 2024:
Foreign exchange reserves exceeding USD 3.2 trillion.
The creation of 12.56 million new urban jobs.
A 5.1% growth in per capita disposable income.
A rise in high-tech manufacturing (8.9%) and equipment manufacturing (7.7%).
A record 13 million new energy vehicles produced.
China is targeting a GDP growth of around 5% for 2025, with an estimated deficit-to-GDP ratio of approximately 4%. The country also aims to reduce energy consumption per unit of GDP by 3% while maintaining inflation (CPI) at around 2%.
Despite its economic resilience, China acknowledges ongoing challenges such as youth unemployment, with a targeted urban unemployment rate of around 5.5% for 2025. The reluctance of young people to take ordinary jobs remains a pressing issue, as many aspire to join major corporations.
Foreign policy discussions at the embassy briefing touched on several contentious issues, including Taiwan, the South China Sea, and relations with Japan. China issued a stern warning to Japan over its stance on Taiwan while expressing interest in normalizing ties with India. Beijing emphasized its commitment to supporting the Global South and ensuring that stronger nations do not dominate global affairs.
Amid Sri Lanka’s economic crisis, the USD 3.7 billion Sinopec oil refinery project in Hambantota remains a crucial point of discussion. Minister Counsellor Yanwei Zhu outlined key hurdles facing the project, including land acquisition, water shortages, and tax exemptions affected by IMF-led economic reforms. Despite these obstacles, Zhu reaffirmed Sinopec’s commitment, citing the high-level political relationship between China and Sri Lanka as a key motivator for the investment.
Responding to media queries, Ambassador Qi Zhenhong confirmed that China had finalized its debt restructuring agreement with Sri Lanka on June 26, 2023. While China was the first to sign such an agreement, Japan followed suit on March 7, 2024, with a deal to restructure USD 2.5 billion. The Chinese envoy highlighted that China’s Exim Bank had incurred substantial losses due to the restructuring, emphasizing Beijing’s willingness to support Sri Lanka’s economic recovery.
When asked about concerns raised by Tamil MP Selvam Addaikalanathan regarding Chinese interests in Tamil Nadu’s poaching issues in Sri Lanka’s northern waters, the embassy reiterated its support for Sri Lanka’s sovereignty. China expressed confidence in Colombo’s ability to handle the matter independently.
China’s strategic approach—termed ‘head-of-state diplomacy’—continues to shape its global relations. The embassy underscored China’s efforts to foster a “shared future” with select countries, including Sri Lanka, positioning itself as a key development partner.
Despite global uncertainties, China remains steadfast in its economic ambitions and diplomatic commitments. As Sri Lanka navigates its economic recovery, China’s silent but significant role in debt restructuring and economic cooperation will likely shape the nation’s future trajectory.
-By Diplomatic Correspondent
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by (2025-03-18 17:14:54)
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