Chinese investment in Sri Lanka

‘Jaffna is not situated south of any country … there is no hidden agenda’

By Shamindra Ferdinando

Chinese Ambassador to Colombo Qi Zhenhong said yesterday Beijing wanted to have a Free Trade Agreement (FTA) with Sri Lanka and emphasised the pivotal importance of concluding the FTA soon.

The Ambassador discussed the issue at a meeting with a selected group of journalists at the Galle Face Hotel yesterday (9) evening. The Chinese Ambassador addressed the print media soon after the Chinese Foreign Minister Wang Yi left the country after meeting the top Sri Lankan political leadership.

Responding to media queries, the top Chinese envoy assured that China wouldn’t take advantage of Sri Lanka under any circumstances. The Ambassador described the bilateral relationship between the two countries as a strategic partnership.

The Chinese push for FTA gathers momentum in the wake of controversial agreements the incumbent dispensation had finalised with US-based investor now challenged in the Supreme Court, as well as fundamental rights plea against the recently inked agreements on the Trincomalee oil tank farm.

The Chinese Ambassador explained the short and long term measures jointly taken by China and Sri Lanka to address the growing financial crises experienced by Sri Lanka. Reference was made to the recent currency swap worth Yuan10 bn (approximately USD 1.5 bn).

The Ambassador did not answer repeated specific questions whether China would consider restructuring Sri Lanka’s debt.

Acknowledging the crises including debt servicing experienced by Sri Lanka, the ambassador asserted that the country would overcome the daunting challenges. Claiming that Sri Lanka had faced far bigger challenges in the past, the envoy described the current situation as temporary.

The Ambassador underscored how the FTA could help Sri Lanka in the long run. The Chinese diplomat dismissed assertions that the proposed FTA would be disadvantageous to Sri Lanka and that Beijing sought the instrument at the expense of the smaller economy.

Ambassador alleged that some countries had taken advantage of Sri Lanka by way of FTAs. The Ambassador stressed the need to finalize the FTA without further delay. When asked to explain the delay, the Chinese Ambassador suggested that the media should raise the issue with the Sri Lankan side.

There have been six rounds of talks between the two sides.

Declaring the Chinese were flexible on the matter, the Ambassador said they were prepared to discuss Sri Lanka’s concerns.

The Island raised several matters of concern, including the controversy over the allegedly contaminated carbonic fertiliser consignment and ruling party lawmaker Dr. Wijeyadasa Rajapakse, PC, accusing China of taking advantage of an utterly corrupt system here to its advantage. Asked whether China has taken up the former Justice Minister’s allegations with the government, the Ambassador said such statements were normal as the country was open to different opinions. The Ambassador said that there was no basis for such accusations. He pointed out that the current status of bilateral relations proved such criticism couldn’t be taken seriously. The Ambassador said that there was no basis for such accusations. He pointed out that the current status of bilateral relations proved such criticism couldn’t be taken seriously.

Recently, MP Rajapakse in a letter to the Chinese President, questioned the integrity of Chinese endeavours. One-time President of the Bar Association of Sri Lanka vowed that a future government would take over Chinese investments in Selendiva.

He described the Colombo Port City project on glowing terms on the basis of investments already received, forthcoming investments and the parliamentary approval received by the Colombo Port City Commission. Reference was made to the huge parliamentary majority received for the Bill with the Ambassador comparing the parliamentary approval with that of public support.

The Ambassador also commented on his recent visit to the Jaffna peninsula as well as the power projects based on Jaffna islands. Having explained his Jaffna visit being delayed due to the situation caused by Covid-19, the Ambassador emphasized Jaffna was the northernmost part of Sri Lanka and not positioned south of any other country. He said that China was keen to see how it could help Northern Sri Lanka after the successful conclusion of three decades long war over a decade ago.

China provided much required firepower and training at a time many countries balked at backing Sri Lanka’s war against separatist terrorism.

Beijing’s Ambassador denied having a hidden agenda. He warned cancellation of Northern Power projects could be of serious detriment to Sri Lanka as the Chinese private sector secured the ADB funded project through an international bidding process. He denied embassy involvement in the power projects.