China grants 300 million yuan loan to Sri Lanka amid economic crisis


China has decided to provide a 300 million yuan loan to Sri Lanka amid the unprecedented economic crisis in the island nation.

The total amount of emergency subsidies provided by China has risen to 500 million Chinese yuan, or $76 million.

The Chinese Embassy in Sri Lanka, in a tweet, said that to “support the people of Sri Lanka in these difficult times, China has decided to provide an additional 300 million RMB to Sri Lanka for medicine, urgently needed food and fuels, etc., bringing China’s total emergency grant to 500 million RMB (about $76 million).”

Currently, Sri Lanka is struggling with food and electricity shortages, affecting many people. Such an economic crisis has forced Sri Lanka to seek help from its neighboring countries to provide them with basic amenities.

As Sri Lanka faces its worst economic crisis since independence, many believe that China’s “debt trap diplomacy” is to blame for the crisis.

China has always kept its interests first and used smaller nations as its pawn, be it Sri Lanka or the Maldives. Beijing is known for selling the dream of a fast-growing economy and then trapping those countries in debt diplomacy, according to reports.

Writing in Channel News Asia (CNA), R Ramakumar, professor of economics at the Tata Institute of Social Sciences, pointed out that China’s “debt trap” policy is singularly responsible for Sri Lanka’s dire economic situation. Lanka.

Sri Lanka is currently experiencing its biggest economic crisis since its independence from British rule in 1948. The crisis is blamed on currency shortages caused by the travel ban imposed during the COVID-19 outbreak.

This has resulted in the country’s inability to buy enough fuel, leading to extreme shortages of food and essentials such as fuel oil and gas.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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