Connect with us

News

Discussions with China underway to resolve economic crisis

Published

4 years ago

on

USD 2.5 bn funding:

Amb Zhenhong silent on IMF intervention

By Shamindra Ferdinando

The cash-strapped Sri Lankan government is negotiating with China for funds amounting to USD 2.5 bn in addition to USD 2.8 bn obtained since the global epidemic Covid-19 eruption in early 2020.

Chinese Ambassador Qi Zhenhong disclosed Sri Lanka’s request at the onset of a media briefing held at the Kingsbury Hotel in Colombo yesterday (21).

The disclosure was made close on the heels of the finalisation of USD 1 bn loan facility provided by India and President Gotabaya Rajapaksa’s declaration of his readiness to seek IMF assistance. Amb. Zhenhong declined to comment on Sri Lanka’s decision to resume negotiations with the IMF.

Sri Lanka announced plans for talks with the IMF in the wake of an increase in prices of all essential items and services following the floating of the Rupee in the first week of March.

Amb. Zhenhong said that China recently received requests for USD 1 billion financing facility and USD 1.5 bn buyer’s credit. The Chinese envoy declared: “We understand the urgency in Sri Lanka’s need. Relevant authorities are studying the request.”

In spite of repeated questions, Amb Zhenhong refrained from going into details, including Sri Lanka’s specific needs while reiterating their commitment to help a friendly country.

Zhenhong presented his credentials to President Gotabaya Rajapaksa in mid Nov 2020 at the height of the first Covid-19 wave.

At the commencement of the briefing attended by local and Colombo based international media, Amb. Zhenhong said a range of events and activities conducted so far this year to mark 65th anniversary of China-Sri Lanka diplomatic relations and the 70th anniversary of the Rubber-Rice pact.

Responding to a query raised by Reuters, Amb Zhenhong said that USD 1 bn term financing facility had been provided on March 18, 2020 and April 12, 2020 (USD 500 mn each) with maturity period of 10 years. That was followed by CNY 2 bn (approximately USD 300 mn) term financing facility provided on Aug. 17, 2021, Amb Zhenhong said, adding CNY 10 bn (approximately USD1.5 bn) bilateral currency SWAP agreement was finalized in March 2021.

The Chinese envoy sidestepped a specific query on President Gotabaya Rajapaksa’s request to restructure debt repayments to overcome the financial crisis.

President Rajapaksa made the request during a meeting with Chinese Foreign Minister Wang Yi in early January this year.

New requests for USD 2.5 bn (USD 1 bn financing facility and USD 1.5 bn buyer’s credit) are believed to have been made following the Chinese Foreign Minister’s high profile visit.

Asked whether India has overtaken China in providing assistance and investments here, Amb Zhenhong listed Chinese loans and investments while asserting consistency, scale and comprehensiveness in their role.  The Chinese envoy didn’t respond to the query on Finance Minister Basil Rajapaksa being too close to India and pursuing an agenda at the expense of Beijing.

Amb Zhenhong dismissed assertions that the failure on the part of the Colombo Port City to attract investments and concerns over proposed Free Trade Agreement (FTA) between China and Sri Lanka. Amb Zhenhong assured: “We’ll never take advantage of FTA with Sri Lanka.” The Chinese envoy said so when the media queried the absence of a draft of FTA and serious concerns over its content against the backdrop of the previous Sri Lanka administration finalizing FTA with Singapore under controversial circumstances.

Amb Zhenhong said that the experts of both sides could handle the issues at hand.

Amb Zhenhong said that in spite of Covid-19 eruption China sustained its projects here with over 11,000 locals hired. Referring to major Chinese projects underway here namely Colombo Port City, Colombo International Container Terminals (CICT) and Hambantota International Port (HIP), Amb Zhenhong emphasized their ventures were on track.

The envoy questioned the unexplained suspension of ADB funded power projects in the North while declining to respond to questions regarding the status of them. The Chinese envoy advised that such an attitude on Sri Lanka’s part would be inimical to ongoing efforts to attract foreign investment.

The Chinese envoy avoided responding to queries regarding growing Indian presence in the Northern and Eastern Provinces of Sri Lanka and instances of India objecting to Chinese taking up projects. However, Amb Zhenhong explained the projects undertaken by China in Tamil dominated region, investments and grants made in support of the civilian community there.


Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest News

Heat Index at Caution Level in the Western, Sabaragamuwa, Southern, Eastern, North-western, Northern and North-central provinces and in Monaragala district

Published

17 hours ago

on

2026/04/1

By

Warm Weather Advisory
Issued by the Natural Hazards Early Warning Centre
Issued at 3.30 p.m. on 31 March 2026, valid for 01 April 2026.

The Heat index, the temperature felt on human body is likely to increase up to ‘Caution level’ at some places in the Western, Sabaragamuwa, Southern, Eastern, North-western, Northern and North-central provinces and in Monaragala district.

The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.

Effect of the heat index on human body is mentioned in the above table and it is prepared on the advice of the Ministry of Health and Indigenous Medical Services.

ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.

Note:
In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry of Health in this regard as well. For further clarifications please contact 011-7446491.

Continue Reading

News

Urea shortage threatens Yala harvest: Experts

Published

18 hours ago

on

2026/04/1

By

Prof. Marambe

Govt. rations stocks as imports falter

By Ifham Nizam

The government faces a looming fertiliser crisis ahead of the 2026 Yala season, with a sharp shortfall in urea threatening paddy yields and food security.

Experts have warned that the fertiliser shortage will take its toll on the yala harvest.

With just over 100,000 tonnes of fertiliser in stock by early March—barely enough for paddy cultivation alone—and more than half of expected imports either cancelled or delayed, the government has moved to ration supplies through Agrarian Service Centres, based on last year’s consumption.

Leading crop scientist Professor Buddhi Marambe has warned that while rationing is unavoidable, it will reduce productivity. “Even last season we applied below recommended levels. This year, the gap will be worse,” he said.

Authorities are prioritising paddy, followed by maize and tea, as limited stocks are stretched across crops.

However, experts estimate yields could fall by 15–20% if nutrient shortages persist—raising the risk of higher food prices in the months ahead.

The crisis has been worsened by global disruptions, including Gulf conflict affecting fertiliser shipments and precautionary export restrictions by key suppliers, such as China.

Although the Government is pursuing deals with countries like Russia, supplies remain uncertain.

With global urea prices surging and production costs rising, smallholder farmers are expected to be the hardest hit.

“This is a wake-up call,” Prof. Marambe said, urging urgent steps to build buffer stocks and strengthen Sri Lanka’s long-term food security strategy.

Continue Reading

News

2025 property grab: Court orders JVP to hand back Yakkala office to FSP

Published

18 hours ago

on

2026/04/1

By

FSP's Nuwan Bopage addressing the media

By Shamindra Ferdinando

Frontline Socialist Party (FSP) spokesman Pubudu Jayagoda says the Gampaha Magistrate’s Court order that the ruling JVP hand back the FSP’s Kirindiwela office, grabbed by a group of JVP politicians on 02 September, 2025, has shown that the government cannot undermine the law.

Jayagoda said that the FSP had been compelled to move the court against the JVP as the Gampaha police refused to intervene due to political pressure. “They probably thought we were going to give up that office. Perhaps, the ruling party felt they could forcibly occupy other FSP offices,” Jayagoda said.

FSP’s Administrative Secretary Chamira Koswatta and trade unions, which operated from the Salmal Garden office, sought the court intervention to confirm the ownership of that building in the FSP. The court initially transferred the building to the police and issued a directive to law enforcement authorities to remove the JVP/NPP from that building.

Among the 20 respondents was Tilvin Silva, General Secretary of the JVP. Those now identified themselves as FSP quit the JVP in 2011 and later formed their own party.

Gampaha Additional Magistrate Shilani Perera on Monday ruled that the legitimate owner was the FSP. The Magistrate ruled that the FSPers had been forced out of that office, illegally.

Jayagoda said that the FSP considered the court ruling a victory for democracy and a devastating blow to the increasingly authoritarian JVP/NPP rule.

Continue Reading

Trending