ECONOMYNEXT – The Chinese embassy in Colombo has taken umbrage at what it called the hypocrisy of US Ambassador Julie Chung for an alleged “China China China” mantra and for calling Beijing a “spoiler” in Sri Lanka’s negotiations with the International Monetary Fund (IMF).
In a statement issued in not-uncharacteristically scathing and borderline undiplomatic language, the Chinese embassy chastised their “US colleague” for remarks she had made in a recent interview given to the BBC on Sri Lanka’s ongoing currency crisis.
“Before her baseless accusing and lecturing, our US colleague should have at least asked herself: Who is the single largest shareholder of the IMF with a veto power over major policy decisions? Who is keeping printing US dollar, with more than $3 trillion in 2020 alone?” the embassy said.
“Who are those private creditors owning 40% of Sri Lanka’s total external debt stock with the highest interest rates? Who sued Sri Lanka in its federal court immediately after the island’s default?”
Ambassador Chung told BBC’s Newsnight on January 11 that the greater onus to move with regard to Sri Lanka’s debt restructuring, a prerequisite for an IMF bailout, was on China, as the biggest bilateral lender.
“We hope that they do not delay because Sri Lanka does not have time to delay. They need these assurances immediately,” she was quoted as saying by the BBC website.
“For the sake of the Sri Lankan people, we certainly hope China is not a spoiler as they proceed to attain this IMF agreement.”
The Chinese embassy, evidently not amused by Chung’s remark, said: “Isn’t it hypocrisy at its finest for our US colleague to play the blame game instead of a self-examination? After all, why didn’t the US take decisive actions in the IMF for a more comfortable solution for Sri Lanka or extend grant to the island with the rocket amount of US dollars they print every year, instead of sowing discord between China and Sri Lanka?”
“Both Chinese and Sri Lankan people are wise enough to judge without any foreign lecturing who is the spoiler of our development,” it added.
The embassy’s harsh statement came hours after another statement expressing China’s strong opposition to what it called a rumoured “sneaky” visit by the Dalai Lama to Colombo.
Tensions have been simmering between China and the West and regional power India over Sri Lanka, which all countries have expressed a strategic interest in, and all parties have made overtures to the island nation with regard to its worsening currency crisis since it blew up in early 2022.
Sri Lanka is desperate for the cooperation of China and India in restructuring its debt, a prerequisite for the eagerly awaited 2.9 billion US dollar extended fund facility (EFF) from the IMF, which is contingent upon debt sustainability and a successful restructure of external debt.
Colombo owes Beijing some 7 billion US dollars while India is owed up to a billion. China has reportedly been reluctant to write down Sri Lanka’s debt because of possible implications to loans it has extended to other developing countries.
President Ranil Wickremesinghe, however, told parliament on Tuesday that talks with China and India have been successful.
“We will have an answer very soon,” he said.
A high level delegation of China’s Communist Party (CPC), led by Vice Minister Chen Zhou, Head of the CPC International Department called on Sri Lanka’s Prime Minister Dinesh Gunawardena on January 16.
“Sri Lanka is a very special friend of China and we are considering how we could assist Sri Lanka to get over the current crisis,” Chen Zhou was quoted as saying.
“You will have some good news soon.”
However, one Sri Lankan legislator has been highly critical of an apparent reluctance to assist Sri Lanka in its hour of need. The MP, Shanakiyan Rasamanickam of the opposition Tamil National Alliance (TNA), controversially warned that Sri Lankans would take to the streets in a “go home, China” protest if China did not cooperate. (Colombo/Jan18/2023)