COLOMBO: Sri Lanka’s President Gotabaya Rajapa­ksa asked China to help restructure debt repayments as part of efforts to help the South Asian country weather a worsening financial crisis, his office said in a statement on Sunday.

Rajapaksa made the request during a meeting with Chinese Foreign Minister Wang Yi in Colombo on Sunday.

Sri Lanka has benefited from billions of dollars in soft loans from China but the island nation is currently in the midst of a foreign exchange crisis placing it on the verge of default, according to analysts.

“The president pointed out that it would be a great relief to the country if attention could be paid on restructuring the debt repayments as a solution to the economic crisis that has arisen in the face of the Covid-19 pandemic,” Rajapaksa’s office said in the statement.

China is Sri Lanka’s fourth biggest lender, behind international financial markets, the Asian Development Bank and Japan.

Over the last decade China has lent Sri Lanka over $5 billion for highways, ports, an airport and a coal power plant. But critics charge the funds were used for white elephant projects with low returns, which China has denied.

Rajapaksa also requested China to provide “concessional terms” for its exports to Sri Lanka, which amounted to about $3.5bn in 2020, the statement said, but did not give details.

Rajapaksa also proposed allowing Chinese tourists to return to Sri Lanka provided they adhere to strict Covid-19 restrictions.

Published in Dawn, January 10th, 2022