The Sri Lankan government declared that it has “completely changed” its stance towards China, as it looks for investment in economic projects on the south of the island.
The current Sri Lankan government, which came into power last year, had initially halted a Chinese port project in Colombo, due to concerns on how the project was agreed on by the previous Rajapaksa regime.
The suspension of work was costing $380,000 a day said the state-owned China Communications Construction Co Ltd (CCCC), before “the new Sri Lankan government understood the reality and also the fact that they were legally bound by the contract," said an official at CHEC Port City Colombo (Pvt) Ltd.
Now Sri Lanka’s cabinet spokesman Rajitha Senaratne told Reuters "the stance on China has completely changed".
His comments come as Sri Lanka’s finances deteriorated the government looked to the IMF for an emergency loan to avoid a balance-of-payments crisis.
"Who else is going to bring us money, given tight conditions in the West?" said Mr Senaratne.
Colombo has also placed China as the front runner for investment in a special economic zone (SEZ) in Hambantota, where the Chinese have already constructed a $1.7 billion seaport and airport. Protests took place late last year after it emerged the chronically underutilised airport was put in to use to store paddy.
Sri Lanka’s International Trade Minister Malik Samarawickrama was more than happy to invite Chinese investment to the region saying, "We will agree to that. They will invest their own money. That's the way to go forward."
Finance Minister Ravi Karunanayake also brushed off concerns regarding high interest Chinese loans, telling Reuters, "Everything is going well. If there were 7 percent (interest) loans, we have reduced to lower-regime loans." No further detailsw ere provided regarding the loan negotiations.
China meanwhile, said it looked forward to working closely with Sri Lanka.
"We believe Sri Lanka ... will continue to deepen practical cooperation with China," said foreign ministry spokeswoman Hua Chunying.
See more from Reuters here.
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