The Sri Lankan government has caved to pressure from Beijing and agreed to pay almost US$6.9 million for a shipment of fertilisers that it had previously rejected as substandard.
In a statement issued ahead of the Chinese foreign minister’s visit to the island, the state-run People's Bank of Sri Lanka confirmed it had paid the Seawin Biotech Group US$6.87 million over the shipment.
The payment comes as a diplomatic spat between the two countries grew, after the Sri Lankan government refused to pay for a shipment of 20,000 tonnes of fertiliser.
In response, Seawin Biotech, launched a legal case against Sri Lanka for turning away scheduled exports of fertilisers worth US$49.7 million the Global Times reported, whilst the Chinese government blacklisted the People's Bank.
Further press reports suggested the company was exerting pressure on the Chinese government to obtain payment for the fertiliser as well as telling other Chinese companies “not to trust Sri Lanka”.
Following months of dispute, the amount has finally been paid.
"After the updated agreement is signed, new fertilizer will be provided by the Chinese company," Luo Chong, a spokesman for the Chinese Embassy in Colombo, told Nikkei Asia.
"I am sure if we had reached out to them in a proper manner it would have been a very different scenario,” George I.H. Cooke, a former diplomat also told Nikkei Asia. “We can't sit on our high horses and expect them to give into us, because, after all, China is a formidable force and we are just a small country.”
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