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China and Sri Lanka Forge Stronger Economic Ties Amid Debt Restructuring Efforts
High-Level Meeting Between Leaders
China and Sri Lanka have announced enhanced investment and economic cooperation following a meeting between Chinese President Xi Jinping and Sri Lankan President Anura Kumara Dissanayake in Beijing on Wednesday.
New Agreements Signed
The two nations signed 15 cooperation documents, focusing on economic and technological collaboration. A key element of the discussions was the alignment of China’s Belt and Road Initiative with Sri Lanka’s 2030 digital economy blueprint. Specific details of the agreements were not disclosed during the signing ceremony.
Debt Restructuring and IMF Compliance
President Dissanayake’s visit to China comes at a critical juncture for Sri Lanka, which is restructuring its foreign debt as part of a $2.9 billion bailout program from the International Monetary Fund (IMF).
- In June, Sri Lanka secured a preliminary $10 billion debt restructuring deal with key lenders, including China, Japan, and India.
- In December, the country negotiated a $12.5 billion bondholder agreement.
However, to finalize the process and meet IMF requirements, Sri Lanka still needs direct agreements with China EXIM Bank and China Development Bank.
Regional Balancing Act
The visit to China follows President Dissanayake’s earlier trip to India, reflecting Sri Lanka’s efforts to maintain balanced relations with its two largest regional partners. While China remains Sri Lanka’s largest bilateral lender, India’s strategic interests and proximity make it an essential ally.
Xi Jinping’s Statement
During their meeting at the Great Hall of the People, President Xi Jinping expressed his commitment to strengthening bilateral ties. “I am willing to work with you, Mr President, to chart a new vision for the development of bilateral relations and promote new and greater achievements in China-Sri Lanka’s friendship and cooperation,” Xi stated.
This renewed collaboration signals a crucial step for Sri Lanka as it seeks to stabilize its economy and enhance its international partnerships.