Chinese President Xi Jinping has urged Sri Lanka to continue to work with Beijing to develop the controversial Hambantota port.
The Indian Ocean shipping hub, which sits along the main waterways of Asia and Europe, was handed over to a Chinese firm on a 99-year lease that prompted accusations of “debt-trap diplomacy” from countries such as India and the United States.
“China is willing to work with Sri Lanka to steadily promote key projects such as Colombo port city and Hambantota port, boosting high-quality construction under the Belt and Road Initiative to provide a strong driving force for Sri Lanka’s economic revival and sustainable development in the post-pandemic era,” Xi told his Sri Lankan counterpart Gotabaya Rajapaksa, according to a Chinese foreign ministry statement.
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The Sri Lankan side has yet to provide a readout of Monday’s phone call.
Sri Lanka’s geographical position means it plays an important role in the Belt and Road Initiative, a global infrastructure development project that is one of Xi’s signature policies.
Opened in 2010, the Hambantota port had been running at a loss because of the lack of commercial activity before it was handed over to a Chinese firm on a 99-year lease in 2017.
The deal prompted accusations in India and the West about Chinese “debt-trap diplomacy” – where countries rack up large debts and are forced to hand over strategic assets when they cannot repay them.
India is also concerned by China’s role in developing infrastructure around the Indian Ocean, including Gwadar port in Pakistan and Kyaupkyu port in Myanmar.
Last month Sri Lankan Foreign Minister Dinesh Gunawardena told Ceylon Today that the original port deal had a provision to extend the term of the lease by a further 99 years but that had been a “mistake” made by the previous government. Both countries have denied that the lease will be extended.
Earlier this month Sri Lanka’s ambassador to China, Palitha Kohona, told the South China Morning Post that the country was not falling into a debt trap and the port deal would not be renegotiated.
He said that China did not just offer loans and it was Sri Lanka that asked for the money. He added: “I’m saying very responsibly and without any reservation that Sri Lanka’s debt to China is less than 10 per cent of our entire debt and we can’t get into a trap … In almost every situation, China did not come to Sri Lanka and say, ‘here’s money, take it’. We went to China and asked for the money.”
Xi and Rajapaska also said they would “firmly support each other’s positions on issues involving core interests”, the Chinese foreign ministry said.
Xi offered to help Sri Lanka fight the pandemic and explore cooperation in areas such as aviation and education, while Rajapaksa said that Sri Lanka hoped to learn from China’s experience in poverty alleviation.
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