By Yakuta Dawood Courtesy The Morning

• Discussions began after Chinese New Year

The Government of Sri Lanka (GoSL) is most likely to receive a helping hand from the Chinese Government in the upcoming months to overcome the present financial crisis faced by the country, Treasury Secretary S.R. Attygalle revealed. 

Speaking to The Sunday Morning Business, Attygalle stated that based on the request made by President Gotabaya Rajapaksa on 9 January, official discussions had begun after the Chinese New Year on finalising the loan amount scheduled to be granted to Sri Lanka. 

Discussions are ongoing and the final decision will be made soon,” Attygalle said. 

However, when asked about the amount that Sri Lanka was expecting from the Chinese Government to overcome the financial crisis, Attygalle refused to divulge information, stating that it was too early to comment on the amount without any finalisation. 

Last month, Attygalle told The Sunday Morning Business that if the Government of China were to extend its support to Sri Lanka, and given the existing supporting ally, the Government of India, other lenders would also be willing to help Sri Lanka restructure its debt repayment. 

India has supported us and similarly the Cabinet has requested China to restructure the debt. We will see how it goes; when these two Governments do so, certain others will also follow,” he added. 

On 9 January, President Gotabaya Rajapaksa put forward this request at a meeting held with Chinese Foreign Minister Wang Yi. 

The President pointed out that it would be a great relief to the country if attention could be paid to restructuring debt repayments as a solution to the economic crisis that has arisen in the face of the Covid-19 pandemic,” the President’s Office said.

The statement also said China was asked to provide concessional” terms for its exports to Sri Lanka, which amounted to around $ 3.5 billion last year, without providing further details.

Further, President Rajapaksa also offered to permit Chinese tourists to return to Sri Lanka provided they adhered to strict Covid regulations.

China is Sri Lanka’s fourth biggest lender, behind international financial markets, the Asian Development Bank (ADB), and Japan. According to official data, China has lent Sri Lanka over $ 5 billion (£ 3.7 billion) in the last decade for projects including roads, an airport, and ports.