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Published on Jul 27, 2022 Updated 16 Days ago
A negative sentiment prevails in China about the Sri Lankan crisis as they claim Sri Lanka is exploiting its position and employing the “victim rhetoric” to take “advantage” of China.
Chinese discourse on the Sri Lankan crisis From shock to sympathy, the recent economic, political, and humanitarian crisis in Sri Lanka has elicited strong emotions across global capitals. In Beijing, however, the sentiment has been somewhat different, mostly that of anger and indignation. There has been largescale condemnation on the Chinese internet, of what is being called Sri Lanka’s “victim rhetoric”. There are accusations that the island nation “took advantage” of China, used it as an ATM, and is now “publicly embarrassing China”. The words being used for Sri Lanka and its political class are far from flattering, which include “white-eyed wolf(白眼狼), “backstabber”, “ungrateful”, “capricious”, “completely untrustworthy”, “treacherous”, and so on and so forth, and therefore, “unworthy of China’s pity or assistance”. Instead, they say, that it is time for Sri Lanka to be taught a lesson and made to pay a heavy price.

The words being used for Sri Lanka and its political class are far from flattering, which include “white-eyed wolf(白眼狼), “backstabber”, “ungrateful”, “capricious”, “completely untrustworthy”, “treacherous”, and so on and so forth, and therefore, “unworthy of China’s pity or assistance”.

So, why is the Chinese strategic community so furious at Sri Lanka? Why is China unwilling to provide adequate assistance to the nation, whom it once called “an all-weather friend and partner”, particularly at the time of its dire needs? Various articles on the Chinese internet claim that when Sri Lanka encountered the economic crisis, China had originally offered to negotiate on China's debt, extend the repayment period, help in the “new debt to repay old debt” type of restructuring, and has even been willing to provide Sri Lanka's US$1 billion sovereign bonds, on condition that Sri Lanka steps up cooperation with China. What kind of cooperation? On 10 January, just before the upcoming 14th round of China–India military commander-level talks, Chinese State Councillor and Foreign Minister Wang Yi visited Sri Lanka, along with other Indian Ocean countries like Comoros and Maldives, etc. and floated the idea of holding a ‘development forum of Indian Ocean countries’, which aimed at gathering consensus, forming synergy, and thus “stringing the pearls together” in the Indian Ocean under Chinese leadership. This, he said, was a part of China’s ‘global development initiative’ proposed by President Xi Jinping in September 2021, especially meant to address the development needs of the Indian Ocean Island countries and their post-pandemic recovery and sustainable development. He further proposed that China–Sri Lanka make good use of the “dual-engine role of Colombo Port City and the Hambantota Port,” collaborate under the Regional Comprehensive Economic Partnership Agreement and discuss the re-start of the China–Sri Lanka Free Trade Agreement negotiations, to release important signals to the outside world (particularly to India ). Chinese analysts at that time argued that for China a few billion dollars in loan to Sri Lanka is nothing compared to the role it can play in containing India to South Asia, enhancing China’s influence in the IOR and successfully implementing the Belt and Road Initiative. However, in the following months, not only did the Chinese proposals make little headway, but China got further disappointed as Sri Lanka decided to suspend foreign debt payments in April, defaulted on its debts in May, declared bankruptcy in July, and went to the IMF for assistance. Sri Lanka’s decisions, the Chinese side argues, are detrimental to Chinese interests, as it will cause serious economic losses to China. China had wanted Sri Lanka to keep repaying its debts, while China helped it to secure better deals at the international financial institutions, which, in a way, would have also ensured that the money continued to make its way back into the Chinese coffers. But the course that Sri Lanka has taken “under Western/Indian influence”, the Chinese side stated, has positioned it as an “economic enemy” of China, forcing it (China) to offer debt relief to Sri Lanka, under unfavourable IMF conditionalities. The Chinese side has been opposing the IMF’s condition of debt haircut (平均剃头) (which requires all the creditors to voluntarily forgive an equal amount of debt) on grounds that it will be a bigger loss for a creditor of new debts like China, while most of Sri Lanka’s existing debt is “old debt”.

Sri Lanka’s decisions, the Chinese side argues, are detrimental to Chinese interests, as it will cause serious economic losses to China.

The growing chorus in Beijing is that Sri Lanka, like most other South Asian nations, is “scheming and opportunist”. It wants to benefit from China but remains highly vigilant against Chinese influence and refuses to carry out substantive and in-depth cooperation, as expected by China. It has a long history of flip-flops on the China issue and now even while getting bailed out, it is swinging between China, the West and India. Therefore, although Sri Lanka remains an important fulcrum of the Maritime Silk Road, it must not be allowed to hold the Belt and Road Initiative (BRI) to ransom, use it as a bargaining chip to force China to repay Sri Lanka’s debt to the West, India, US, Japan, and others. After all, the bankruptcy of Sri Lanka is not going to be the end of this crisis but is most likely just the beginning. And, the disposal of Sri Lanka's debt is most likely to set a precedent and affect the settlement of China's and other countries' debts vis-á-vis multiple nations. China, therefore, must not allow itself to be a “scapegoat”, but instead make active efforts to scuttle Sri Lanka’s bid to obtain IMF assistance. What has been further irking the Chinese side is that Sri Lankan leaders including ex-President Gotabaya Rajapaksa, Sri Lankan ambassador to China Palitha Kohona, among others, are publicly raising their concern from time to time over the lack of Chinese interest in helping Sri Lanka. This, they argue, is further strengthening the western/Indian discourse of Chinese culpability in Sri Lanka’s debt crisis as well as the economic crisis presently faced by several other developing countries and building up international pressure on China to align its stance with the Paris Club and re-consider its position on the ‘Common Framework for Debt Treatment’. All this, while China has been reportedly seeking to stall the G20 debt relief plan for distressed countries, on grounds that it wants to “cut its debt deals” with these nations before the G20 Common Framework for Debt Treatments process is fully implemented.

The disposal of Sri Lanka's debt is most likely to set a precedent and affect the settlement of China's and other countries' debts vis-á-vis multiple nations.

It is against this backdrop that one can see angry assertions on the Chinese internet claiming “China doesn’t owe Sri Lanka anything” and that “BRI is not free relief” for laggards or insincere partners. It is being argued that if Sri Lanka wants more money from China, it must repay the previously owed money, fulfil its obligation of ensuring the safety of Chinese investments in the country and not play the game of moral kidnapping. Not to mention, it must bargain from its position of a bankrupt country and not like some gold dust, trying to balance various forces, seeking to benefit from all. To sum up, for now, the popular discourse in China on the Sri Lankan crisis is that ‘Sri Lanka must pay back or face consequences’. As noted by some articles on the Chinese internet, with China's strength, it is now completely possible that for debt recovery Chinese warships sail over and take control of the Colombo port and make it yet another Chinese port in Sri Lanka. Even if China chooses not to take such drastic measures to avoid global backlash, it will double down on its negotiations with Sri Lanka on the interests that China cares about the most which include joint exercises between the Chinese and the Sri Lankan Navy,  Chinese Navy being allowed to use the Sri Lankan ports for supplies, Chinese maintenance for Sri Lankan warships, dedicated piers at Sri Lankan ports for Chinese warships, or better still, if Sri Lanka agrees to a Djibouti-like transfer of rights for construction of a military base in the island nation, among others.
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Author

Antara Ghosal Singh

Antara Ghosal Singh

Antara Ghosal Singh is a Fellow at the Strategic Studies Programme at Observer Research Foundation, New Delhi. Her area of research includes China-India relations, China-India-US ...

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