Responding to the rejection of 20,000 tonnes of organic fertiliser by the Sri Lankan government, the Chinese company Seawin Biotech have successfully sued the government and are now putting pressure on the Chinese government to impose economic sanctions and trade restrictions on Sri Lanka.
The rejection of the import occurred in September and led to China blacklisting Sri Lanka’s second-largest state-owned bank and a lawsuit in which Sri Lanka agreed to pay USD $6.7 million in damages to a Chinese fertiliser company.
Sri Lanka initially claimed that the fertiliser was rejected due to issues of quality, but Seawin Biotech has rejected these claims and asserted that Sri Lanka’s actions have “damaged their reputation”. They have reputedly lobbied the Shandong provincial government to push China to impose economic sanctions which include restrictions on tea imports from Sri Lanka. The company is further planning to escalate the issue by lodging an official protest at several international institutions.
Seawin Biotech has reportedly also discouraged other Chinese firms from trusting Sri Lankans and even encouraged for firms to request payment in advance before undertaking transactions.
The spat between Beijing and Colombo comes as Sri Lanka’s economy continues to spiral with the US-based Fitch rating agency downgrading Sri Lanka’s sovereign rating to ‘CC' from 'CCC'.
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