China to provide 300 mn yuan loan to Sri Lanka amid economic crisis

China has decided to provide a loan of 300 million yuan to Sri Lanka amidst the unprecedented economic crisis in the island nation.

The total amount of emergency grants provided by China has increased to 500 million Chinese Yuan, which is USD 76 million.

The Chinese Embassy in Sri Lanka, in a tweet, said that to “support Sri Lankan people at this trying times, China has decided to provide another 300 million RMB of aid to Sri Lanka for the urgently needed drugs, food and fuels etc., which increases the total emergency grant from China to 500 million RMB (approximately 76 million USD).”

Currently, Sri Lanka is grappling with food and electricity shortages, affecting many people. Such an economic crisis has forced Sri Lanka to seek help from its neighboring countries to provide them with basic amenities.

While Sri Lanka faces its worst economic crisis since independence, many believe that China’s “debt-trap diplomacy” is behind the crisis.

China has always kept its interests at the forefront and used the small nations as its pawn, be it Sri Lanka or the Maldives. Beijing is known for selling a dream of a fast-growing economy and then trapping these countries into debt diplomacy, according to reports.

Writing in Channel News Asia (CNA), R Ramakumar, a Professor of Economics at Tata Institute of Social Sciences, highlighted that China’s “debt-trap” policy is singularly responsible for the dire economic situation of Sri Lanka.

Sri Lanka is now experiencing its greatest economic crisis since independence from British rule in 1948. The slump is blamed on currency shortages caused by the travel ban imposed during the COVID-19 epidemic.

This has resulted in the nation’s inability to purchase sufficient fuel, resulting in an extreme shortage of food and essential commodities such as heating fuel and gas.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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