Financial Times expresses concerns over Sri Lanka taking Chinese loans
24 September 2018
The London-based Financial Times (FT) recently published an article entitled “Sri Lanka sinks deeper into China’s grasp as debt woes spiral.” It is yet another expression of the concerns of US, European and major Asian powers about cash-strapped Sri Lanka relying more on China for economic support.
The US, with the backing of India and Japan, is increasingly putting pressure on Sri Lanka not to deviate from its efforts to undermine and encircle China.
The FT article is directed against Sri Lanka’s plan to issue $US250 million worth of renminbi-denominated Panda bonds. Country has already agreed to a $1 billion syndicated loan from China Development Bank in August. Its first instalment of $500 million was to be released in the first week of this month.
The article also noted that Sri Lanka had accumulated foreign debt of $55 billion of which Chinese lenders hold 10 percent, while Japan, the Asian Development Bank and World Bank have 13, 14 and 11 percent respectively.
However, the article claimed: “Sri Lanka’s mounting burden has earned some notoriety, with some observers saying the country is falling into a debt trap of Chinese design.” It added: “This view gained currency last year, after $1.1bn in debt was written off in exchange for the deep water port of Hambantota, near the southern tip of Sri Lanka.”
The major powers and the international media are increasingly using the catch phrase “China’s debt trap.” They claim that Beijing provides “unsustainable loans” and investments to bring countries under its fold to achieve China’s strategic ambitions for global domination.
This claim has nothing to do with their concerns for the plight of…