COLOMBO (Reuters) - Sri Lanka’s President Mahinda Rajapaksa on Tuesday started a four-day state visit to China, with support against a Western war crimes push and deeper economic ties on his agenda.
Here are some facts about Chinese’s financial cooperation and investment in the Indian Ocean island nation:
China was Sri Lanka’s largest lender in 2009 and 2010, giving $1.2 billion and $821 million respectively. In 2009, that figure accounted for 54 percent of total foreign loans, and 25 percent in 2010.
In the first six months of 2011, trade between China and Sri Lanka was worth $1.28 billion, a rise of 39.5 percent on the same period in 2010, according to Chinese customs data.
China’s imports from Sri Lanka in the first six months of 2011 were worth $68 million.
Foreign investment of $1 billion will flow into a 500-room hotel by Honk Kong-based Shangri La Asia and a shopping mall by China National Aero Technology Import and Export Corporation (CATIC) in Colombo, the largest investments so far into a post-war tourism boom. [ID:nSGE70D0AI]
The latter has run into an issue, with the president questioning whether the land should be sold as first agreed by his brother, Economic Development Minister Basil Rajapaksa, or given on a long-term lease, according to local media.
CONTRACTS & TRANSACTIONS:
Sri Lanka has signed a $450 million deal with China Merchants Holdings and local conglomerate Aitken Spence to boost the Colombo port’s cargo-handling capacity.
Sri Lanka, with a tradition of strict foreign exchange controls, has allowed international banking transactions denominated in the Chinese yuan since June 29.
China Development Bank Corporation has agreed to provide $1.5 billion within three years for construction of roads, bridges, power plants and water and irrigation schemes.
China has lent $400 million for the first phase of the new port in Hambantota and its Exim Bank has lent $77 million for an oil bunkering facility, while another $810 million has been given for the second phase with China Communications Construction Company as the contractor.
China’s Exim Bank loaned Sri Lanka $455 million to build the first phase of first coal-powered generation station on the Indian Ocean island nation, and has offered an $891 million loan to build the second phase of 600 MW.
ROAD DEVELOPMENT: China has pledged around $760 million to the island nation’s road construction across the country, including $302 million for projects in the war-ravaged north.
A $310 million Chinese loan from its Exim Bank has been granted for the Colombo-Katunayaka express road, which will connect Sri Lanka’s only international airport and its commercial capital, Colombo. It is due for completion next year.
AIRPORT: China has also lent $190 million for Sri Lanka’s second international airport in Hambantota, which is on Sri Lanka’s southern tip and happens to be the president’s electorate.
RAILWAY: China’s Exim Bank has committed $102.5 million for Sri Lanka to buy 13 new diesel engines for its railways. The engines will come from Chinese manufacturers.
Editing by Bryson Hull and Sanjeev Miglani