{"id":109054,"date":"2020-11-26T16:05:46","date_gmt":"2020-11-26T23:05:46","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=109054"},"modified":"2020-11-26T16:05:46","modified_gmt":"2020-11-26T23:05:46","slug":"the-pohottuwa-government-of-sri-lanka-part-2-c7b","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2020\/11\/26\/the-pohottuwa-government-of-sri-lanka-part-2-c7b\/","title":{"rendered":"THE POHOTTUWA GOVERNMENT OF SRI LANKA Part 2 C7b"},"content":{"rendered":"

KAMALIKA PIERIS<\/em><\/span><\/h2>\n\n\n

Economists\nagree that China has made a spectacular rise from a very poor nation in 1949 to\nvery rich one in 2019. Chinese banks are among the largest cross border lenders\nin Asia, said Economist in 2019. Seven of the\ntop 20 equity underwriters in Asia In 2018 were Chinese. Warren\nBuffet\u2019s Berkshire Hathaway had invested USD 232 million in BYD, a Chinese\nenergy products company, in 2008.  In 2019, China had the world\u2019s\nlargest high-speed rail network of 29,000 kilometers. This is about two thirds\nof the world\u2019s total high-speed rail network. <\/p>\n\n\n\n

China is now\ndue to become the biggest economy in the world, ousting the US from that\nposition, analysts said in 2019.     In 2020, China had become the world\u2019s largest economy\nin terms of Purchasing Power Parity (PPP). China\u2019s economy had reached a stunning\n25.4 trillion USD in 2020, said analysts. By 2030 China will be the leading\neconomy. By 2030 China will also have the largest navy and the most powerful\naircraft carrier, they said. <\/p>\n\n\n\n

China\u2019s Belt\nand Road Initiative is a massive global network of ports, railways, roads and\nindustrial parks spanning Asia, Africa, the Middle East and Europe, with\ntrillions invested in new infrastructure. \nChina\u2019s B&R is supported by a bank, unlike other similar ventures. Sri\nLanka is a member. <\/p>\n\n\n\n

More\ncountries are joining it. Iraq announced in September 2019 that Iraq will join\nChina’s “Belt and Road” project. \nIraq is grateful to China for its valuable support and is willing to\nwork together in the ‘One Belt, One Road’ framework,\u201d said the Prime Minister\nof Iraq during a state visit to China. \nBeijing is Baghdad’s biggest trade partner, while Iraq is China’s second\nbiggest oil supplier.<\/p>\n\n\n\n

This November (2020) China and 14 other Asia-Pacific countries\nsigned the world\u2019s largest trade agreement, the Regional Comprehensive Economic\nPartnership. (RCEP). China has joined forces with more than a dozen countries\nacross the Asia Pacific region to sign a huge\nfree trade deal<\/a> nearly a decade in the making, said analysts. <\/p>\n\n\n\n

 The Regional Comprehensive\nEconomic Partnership spans 15 countries and 2.2 billion people, or nearly 30%\nof the world’s population. Their combined GDP totals roughly $26 trillion and\nthey account for nearly 28% of global trade based on 2019 data. The deal includes several of the region\u2019s\nrichest countries, China, Japan, South Korea. It also includes New Zealand,\nAustralia, Indonesia, Thailand and Vietnam.<\/p>\n\n\n\n

The trade agreement was first proposed <\/strong>in\n2012 as a way to create one of the world\u2019s largest free-trade zones. Tariffs\nand quotas would be eliminated on 65% of the goods that are traded in the\nregion.  The economic benefits are modest\nand would take years to materialize but this was a coup for China, said Citi\nResearch analysts.<\/p>\n\n\n\n

The Communist\nParty intends to keep a firm grip on its capitalist economy.  Keeping big business in check is part of that\nplan, said analysts. There was a crackdown on global spending. Anbang Insurance\nwas nationalised, putting the Waldorf under the ownership of China\u2019s Ministry\nof Finance. Baoshang was taken over by the state. Acquisitions of European\nfootball clubs by Chinese groups came to an end. HNA,<\/em> an airlines and\nlogistics group that bought a large stake in Deutsche Bank and Hilton\nWorldwide, faced difficulties. . (Economist)<\/p>\n\n\n\n

 China\u2019s overextended financial conglomerates\nand China\u2019s tech billionaires were brought to heel. Six of China\u2019s 20 most\nvaluable listed companies are tech firms with billions of users.  In addition, firms were asked to launch Party\ncommittees that will oversee corporate decisions. Also set up monitoring units\nthat would allow the Party to audit company managers. (Economist)<\/p>\n\n\n\n

The Republic of China celebrated its   70th<\/sup> anniversary with a very impressive,\nvery long parade which included an \u2018awesome display\u2019 of military equipment. In the\nmilitary parade in 1949, only 70 planes could be found so they had been ordered\nto fly past twice. In 2019 there were 160 aircraft and 580 pieces of military\nequipment on display. China has developed military abilities that can\nreach potential adversaries across the globe, said experts.  <\/p>\n\n\n\n

The military parade was broadcast live, so everybody now knows\nthat the China has invented powerful new weapons. China has no recent\nexperience in sea or air battles, observed critics, but they are developing\n<\/p>\n\n\n

[effective]<\/p>\n\n\n\n

missiles and asymmetric systems. \n\n<\/p>\n\n\n\n

The military\nparade showed off China\u2019s most advanced weapons, some being shown for the first\ntime.  They included the following.  The J-20 supersonic stealth fighters,  the H-6N with an aerial refueling probe\nadded,  that could be used to deter US\naircraft carriers venturing into the South China Sea  and the DF-26 ballistic missile which, fired\nfrom land bases, is believed to have the accuracy to strike at US Navy’s\naircraft carriers. <\/p>\n\n\n\n

Also on\ndisplay was the DR-8 or WZ-8 supersonic drone, a reconnaissance drone that that\ncould potentially be deployed by aircraft, to infiltrate\nenemy airspace and gather intelligenceincluding\ndetermining the damage done by China’s missiles. It could be used to spot\ndistant targets on very short notice and hit them with a conventional ballistic\nstrike.<\/p>\n\n\n\n

The Dong Feng  41, or DF-41,\nis an intercontinental ballistic missile with a range of 15,000 kilometers, allowing it to reach anywhere in the United States in about 30\nminutes.  It is capable of hurling multiple nuclear warheads all over the\nUnited States, said experts.” It could be moved around by road and fired\nquickly.<\/p>\n\n\n\n

 Its range of up to 15,000 kilometers would make it the\nworld\u2019s longest-range military missile.\nSome analysts say it can travel up to 25 times the speed of sound. It could carry as many as 10 independent\nwarheads, which can hit 10 different targets over a wide area.” <\/h2>\n\n\n\n

One of the most closely-watched weapons was the Dongfeng-17, a new\nhypersonic ballistic nuclear missile believed capable of breaching all existing\nanti-missile shields deployed by the U.S. and its allies. Experts say\nit can breach any defence system.  The\nDF-17 missile is thought to be able to travel at more than five times the speed\nof sound.\n<\/strong>It\u2019s designed to bypass enemy missile defense systems by traveling\nat speeds more than 3,400 miles per hour at low altitudes.  <\/p>\n\n\n\n

DF-17 is a nuclear-capable glider that is designed to maneuver at\nhigh speed to evade anti-missile defenses. The glider is believed to be able to\ncarry conventional and nuclear devices. The emergence of such a system would\nhave a considerable impact, highlighting China’s progress in designing\nhypersonic non-strategic gliders, a segment in which Russians and Americans are\nlagging behind, said experts.” <\/p>\n\n\n\n

China kept up\nits contact with Sri Lanka during the USA-controlled Yahapalana rule of\n2015-2019. Tianjin Symphony orchestra played at Nelum Pokuna in 2017, to a full\naudience. Ceylon Chamber of Commerce and the Beijing Chamber of International\nCommerce signed an MOU to promote trade and commerce between the two countries\nin 2015. <\/p>\n\n\n\n

 In 2014 Beijing Foreign Students University\nsigned two memoranda with University of Colombo to set up a China Sri Lanka\nstudy Centre and a Confucius Institute. China said that there is a high demand\nfor Sinhala degree courses at the Beijing Foreign Students University, due to\nthe increase of Chinese investments and business groups. The university has\nfacilities for PhD programs in Sinhala too. Chinese international broadcasting\nservice had a Sinhala channel, they added. <\/p>\n\n\n\n

China did not relax once Pohottu came to power. China remained\nwatchful. Two criticisms of Port City were made. China replied. CHEC Port City\nColombo (Pvt) Ltd wishes to draw your attention regarding, a misleading\nreference about Port City Colombo, in an article, titled \u2018Did Expert Committee\nuse similar standards in evaluating MCC and Port City loans\u2019, by Harim Peiris,\npublished on  09\/07\/2020, and\nsubsequently another opinion article titled \u2018Saving nation from Chinese loan\nstrategies\u2019 by G.A.D Sirimal, on \n11\/07\/2020. <\/p>\n\n\n\n

Both articles say “the issue that arises is whether the SLPP\nand its experts use the same criteria and standards when evaluating the MCC\ngrant with Port City loans and project.\u201d \nPort City Colombo is not a Chinese loan. Port City Colombo is purely a\ncommercial trade agreement and a 100% direct investment.<\/p>\n\n\n\n

After the\nEelam victory of 2009, Mahinda Rajapaksa wished to embark on a development progamme.\nThe only country that came forward to invest in Sri Lankan infrastructure in a\nbig way was China. Therefore, it wasn\u2019t a foreign policy shift but an economic necessity,\nsaid Colombage. West had boycotted us on the grounds of human rights\nviolations. So China filled the vacuum. <\/p>\n\n\n\n

China became\nthe biggest foreign investor in Sri Lanka, dwarfing foreign inflows from other\ncountries by a significant margin. According to a March 2020 study by the\nLondon-based Chatham House think tank, Chinese infrastructure investment in Sri\nLanka amounted to $12.1 billion between 2006 and July 2019.  Beijing is the largest foreign source of\ninvestment in Pakistan, Myanmar, Sri Lanka and Maldives<\/a>, according\nto a 2018 study by Mumbai-based Gateway House think tank. Although the US is Sri Lanka\u2019s biggest\nexport market and a major development partner, it has been unable to match the\nChinese economic might. <\/p>\n\n\n\n

Since the\nelection of Gotabaya Rajapaksa as the President last year, the government has\nonce again deepened its relationship with China.  We have always had excellent relations with\nChina, said President Gotabaya.  Sri\nLanka relations with China is mainly economic, he observed. <\/p>\n\n\n\n

China has\noffered to help mitigate the financial crisis faced by Sri Lanka. Pohottu asked\nfor a $700 million loan. China gave\nUS$500 million  on a 10-year\nconcessionary loan. China also provided generous support towards controlling\nCovid-19.<\/p>\n\n\n\n

Pohottu has\nbluntly pointed out to its pro-US, anti-China critics that it is China that has\nthe most amount of cash now\u201d. In\ndifferent times in world history, different countries have had the most amount\nof cash. And now it happens to be China, Pohottu explained.  However, Sri Lanka is exploring different\noptions to repay its debt, in addition to loans from China, currency swap\nfacilities with India and China, and Samurai and Panda bonds, Pohottu added. <\/p>\n\n\n\n

Despite the\nfact that Chinese loans to Sri Lanka remain below 10 percent of our overall\ndebt burden, and those loans are concessionary loans with an interest rate\naround two percent, Pompeo and other US officials have tried to portray that\nChina has Sri Lanka in a \u2018debt trap\u201d, complained Pohottu. <\/p>\n\n\n\n

Pohottu\ndismissed the accusation that China is setting up “debt traps” in\ndeveloping countries. China is Sri\nLanka\u2019s largest creditor but Sri Lanka is not caught in a China debt trap. 90\npercent of Sri Lanka’s debt is in fact owed to western and multilateral\nfinancial institutions,   Pohottu said.<\/p>\n\n\n\n

This statement has received support from abroad. Min Ye, Professor\nof International relations at Boston University has stated that studies\nconducted by scholars and researchers at US-based institutions have disproved\nthe charge of a debt entrapment policy by China, whether it refers to Sri Lanka\nor Pakistan, or elsewhere. <\/p>\n\n\n\n

China\u2019s\nsupport was to enable Sri Lanka to pay off debt to other lenders. This could\nleave Sri Lanka completely in the hands of China, said . Mick Moore. At any moment, China could decide not to\nextend further loans to Sri Lanka.  On\nthe other hand China could agree to give very large, low cost loans to enable\nthe government to pay its debt to other lenders, he added.<\/p>\n\n\n\n

Epithets like\nTrojan Horse\u201d and Greeks bearing gifts\u201d have been used to refer to offers of\nassistance by China to Sri Lanka. \nPohottu has ignored these warnings\u201d. Analysts observe that Pohottu\nhas pulled the plug on a light rail transit system that was to be\nfinanced and constructed by Japan. It is believed that the construction of the\nproject will now be handed over to a Chinese company. (Continued) <\/p>\n","protected":false},"excerpt":{"rendered":"

KAMALIKA PIERIS Economists agree that China has made a spectacular rise from a very poor nation in 1949 to very rich one in 2019. Chinese banks are among the largest cross border lenders in Asia, said Economist in 2019. Seven of the top 20 equity underwriters in Asia In 2018 were Chinese. Warren Buffet\u2019s Berkshire […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[104],"tags":[],"class_list":["post-109054","post","type-post","status-publish","format-standard","hentry","category-kamalika-pieris"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/109054","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=109054"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/109054\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=109054"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=109054"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=109054"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}