China, India sign loan deals with Sri Lanka
- Source: Global Times
- [01:52 March 12 2010]
- Comments
By Yu Miao
Both China and India opened their checkbooks Wednesday to grant massive support to Sri Lanka.
In a deal signed in Beijing last week, China agreed to loan $290 million to the Sri Lankan government to build an airport and expand the island's railway network, the foreign ministry in Colombo said Wednesday.
Beijing will provide a $190 million loan through its funding arm, Export-Import Bank, to construct the island's second airport and $100 million to boost the capacity of the Sri Lankan railway, the ministry said in a statement.
Two countries also discussed more funding for highways in the island's war-ravaged Jaffna peninsula, the statement said.
"He (Sri Lankan President Mahinda Rajapaksa) appreciates China assisting Sri Lanka at a very crucial stage of her social-economic development, which shoulders a major portfolio of the financial requirements," the statement added.
China was the largest foreign funding source for Sri Lanka in 2009 with $1.2 billion, followed by the Asian Development Bank with $424 million.
Meanwhile, India and Sri Lanka on Wednesday signed a Line of Credit agreement for $67.4 million to fund the sec-ond phase of upgrades for the Southern Railway Line from Colombo to Matara, a city on the southern coast of Sri Lanka, according to The Hindu newspaper.
The Indian government, through the Export-Import Bank of India, had earlier provided a $100 million Line of Credit to Sri Lanka under an agreement signed in July 2008, the newspaper added.
Although both countries pledged support to the pearl of the Indian Ocean, the BBC quoted some Indian officials as saying that they "fear Beijing is trying to undermine New Delhi's influence in the region through its economic assistance," indicating a possible rivalry behind those supports.
Hu Shisheng, a researcher at the China Institutes of Contemporary International Relations, told the Global Times that such conspiracy theories are unnecessary.
"Sri Lanka's strategic importance in the Indian Ocean is indisputable. However, in terms of influence on Sri Lanka, China is incomparable to India, which sits right next to Colombo," Hu said. "China and India are growing powers in Asia, so an overlap of influence may happen occasionally. Both countries just need to adapt to new situation; suspicions won't bring any benefits."
Wang Dehua, director of the South Asia and Central Asia Department at the Shanghai Institutes for International Studies, pointed to China's long-term relations with Sri Lanka.
"The Sino-Sri Lankan relations can trace back 600 years to the famous Eunuch Sanbao to the Western Ocean in the Ming dynasty. As an old friend of Colombo, China will continue developing this sound relationship and bring harmony to the Indian Ocean."
Agencies contributed to this story
