China allays ‘public fears’ on loans provided to Sri Lanka



by Sanath Nanayakkare


Li Jiming, Director General of the Foreign Affairs Office of the Yunnan Provincial Government of China told the foreign media recently that there is no reason for Sri Lankans to fear their country falling into a debt trap because of the Chinese infrastructure loans.


He made this remark in response to a question asked by Indian journalist Venket Narayan who also contributes to The Island newspaper, at the first China-South Asia Cooperation Forum held in Yunnan, China.


"I know that South Asian countries lncluding Sri Lanka are concerned about this. I have seen a number of media reports to this effect. Chinese loans can be characterised into two types; government to government (G2G)loans and business loans. G2G loans are provided at a very low interest, so it can hardly put any pressure on the national economy.


"And business loans are given at a relatively higher interest rate. But both these loans have undergone a thorough feasibility study and all the parties have agreed upon the repayment framework. In fact, it is not China that decided on this framework. The recipient parties decided on it, he said.


 
 
 
 
 
 
 
 
 
 
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