China Deflects Blame for Bankrupting Socialist Sri Lanka

China’s state-run Global Times published an editorial piece on Monday in which it attempted to deflect Beijing’s share of responsibility for Sri Lanka’s current economic crisis, caused in part by Colombo’s recent decision to default on its massive foreign debt, including a large amount owed to China.

Arguing that China’s government was not to blame for Sri Lanka’s financial turmoil, the newspaper’s editors wrote on July 11:

Many research reports have repeatedly demonstrated that Sri Lanka’s current debt crisis is not directly related to Chinese-funded infrastructure investment. Bilateral foreign debt to China only accounts for 10 percent of Sri Lanka’s total outstanding foreign debt.

Western countries’ commercial creditors and multilateral financial institutions are responsible for Sri Lanka’s foreign debt. They sold the debt to so-called vulture funds, which really exploited Sri Lanka’s every penny. Therefore, discrediting China by accusing it of digging of the “debt trap” and even attacking the Belt and Road Initiative is not grounded.

The Chinese Communist Party-run Global Times referred to Beijing’s Belt and Road Initiative (BRI). The program provides Chinese government-funded loans to developing or lower-income nations so that they may build new infrastructure projects. Observers have criticized BRI loans for their propensity to push economically disadvantaged nations further into debt to Beijing. This predicament, observers argue, not only traps BRI participants in a vicious debt cycle but also makes their governments vulnerable to exploitation by China’s ruling Communist Party. BRI projects span the globe and are currently found across Southeast Asia, Central Asia, the Middle East, Europe, Latin America, and Africa.

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