Following Sri Lanka’s plea for $2.5 billion dollars in financial aid, China has announced that it will provide RMB 200 million (roughly $ 31 million) in “urgent emergency humanitarian aid”.
The aid comes as Sri Lanka’s finance minister is in Washington in ongoing discussions with the International Monetary Fund (IMF) and seeking $4 billion in aid. India’s finance minister has urged the IMF to support Sri Lanka as India has provided $ 2.4 billion since the start of the year through a currency swap, loan deferment, and credit lines for food, fuel, and medicines.
Read more here: India offers aid whilst China remains silent on Sri Lanka
It has not been confirmed whether the $31 million worth of aid from China is part of Sri Lanka’s recent $ 2.5 billion requests. China's reluctance to provide further assistance has been seen by analysts as driven by uncertainty over the financial risk Sri Lanka poses.
“Beijing has for the past couple of years been rethinking its external lending because their banks realised they were carrying a lot of debt with countries whose prospects of paying back were quite limited” Raffaello Pantucci, a senior fellow at the S. Rajaratnam School of International Studies at Nanyang Technological University told Bloomberg news.
The Daily Mirror reports a cordial phone conversation between Sri Lanka’s Prime Minister, Mahinda Rajapaksa, and China’s Premier, Li Keqiang.
“China feels for Sri Lanka for the difficulties and challenges you face, and we want to do our utmost to provide help to improve the peoples' livelihoods in your country,” Premier Li said to Prime Minister Rajapaksa.
Amongst the topics covered were reportedly fast-tracking negotiations on the free trade agreement, reducing Sri Lanka's trade deficit with China and attracting more Chinese tourists when the situation permits.