Sri Lanka president to visit China

Sri Lankan President Anura Kumara Dissanayake will travel to the island’s largest bilateral lender, China, for talks in January, he said on Saturday, days after completing a long-delayed foreign debt restructuring.

China accounted for more than half of Sri Lanka’s bilateral debt during the 2022 economic crash when Colombo ran out of foreign exchange to pay for essential imports such as food, fuel, and medicines.

Its economy is recovering after receiving an International Monetary Fund rescue package and imposing austerity reforms to repair the government’s ruined finances.

Leftist Dissanayake came to power in September on a pledge to fight corruption and tightened his grip after his party won a landslide in snap parliamentary polls.

“I will be going to China mid-next month,” he told reporters without setting an exact date.

Dissanayake’s first overseas visit as head of state was to India, where he received a red-carpet welcome from Prime Minister Narendra Modi on Dec. 16.

Regional powerhouse India competes fiercely with China for influence in the Indian Ocean region.

Sri Lanka sits astride the world’s busiest shipping route, which links the Middle East and East Asia, giving its maritime assets strategic importance.

New Delhi has been concerned about Beijing’s growing toehold in Sri Lanka, which it sees as within its geopolitical influence.

Fitch Ratings upgraded Sri Lanka’s long-term foreign currency issuer default rating to CCC+ on Friday.

Fitch said that while debt restructuring had “reduced the government’s debt service burden and liquidity risks,”
the “general government debt/GDP and the interest/revenue ratio are likely to stay high in the medium term.”