Sri Lanka's President Asks China To Restructure Its Debt Repayments And To Access To More Loans For Imports Of Essential Goods

Chinese Foreign Minister Wang Yi visits Sri Lanka

 Reuters: Sri Lanka's president asks China to restructure debt repayments 

COLOMBO (Reuters) - Sri Lanka's President Gotabaya Rajapaksa asked China to help restructure debt repayments as part of efforts to help the South Asian country weather a worsening financial crisis, his office said in a statement on Sunday. 

Rajapaksa made the request during a meeting with Chinese Foreign Minister Wang Yi in Colombo on Sunday. 

Sri Lanka has benefited from billions of dollars in soft loans from China but the island nation is currently in the midst of a foreign exchange crisis placing it on the verge of default, according to analysts. 

"The president pointed out that it would be a great relief to the country if attention could be paid on restructuring the debt repayments as a solution to the economic crisis that has arisen in the face of the COVID-19 pandemic," Rajapaksa's office said in the statement. 

China is Sri Lanka's fourth biggest lender, behind international financial markets, the Asian Development Bank (ADB) and Japan.  

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Update: Sri Lanka seeks Chinese debt restructuring amid crisis (AP) 

 WNU Editor: The official reason why Chinese Foreign Minister Wang Yi is in Sri Lanka is to discuss "Belt and Road" projects. The real reason why he is in the country is because Sri Lanka cannot pay-off its debts. A crisis that was predicted by this blog and others last year .... Analysis-Debt-hobbled Sri Lanka risks running out of options (Reuters). This is what the China "debt-trap" looks like.

My prediction. 

China will probably do something to help Sri Lanka in the short term, but the price is going to be very steep.