The Chinese government has offered Sri Lanka a five-year debt moratorium for bilateral and commercial loan repayments.
In a memorandum addressed to President Ranil Wickremesinghe, they regretted their inability to amortize the outstanding debt.
At the same time, China has requested that the west, including the US and international organizations, help Sri Lanka overcome the current crisis.
Excerpts from the statement:
The People’s Republic of China expresses its sincere gratitude to the government of Sri Lanka. China is committed to supporting Sri Lanka in the best of its interests, including efforts from its local government, social groups, companies, and schools to overcome the current difficulties faced by Sri Lanka. During this hardship, China has provided the Sri Lankan government with close to 2.8 billion dollars in financial support. In order to help Sri Lanka overcome current difficulties, Chinese financial institutions reached out to Sri Lankan authorities and expressed their readiness to help them find a proper way to combat their matured debts.
The economic crisis and debt burden of Sri Lanka have deep structural roots and require financial support from international organizations. The Chinese economy is still recovering from the shock of the COVID-19 pandemic, which is pushing inflation levels in the country.
Under the circumstances, China regrets to inform you that China would not be able to amortize the outstanding debt. However, we are ready to relax the repayment schedule by offering a 5-year moratorium on bilateral and commercial loan repayments.
