China has said "the ball is in Sri Lanka's court" as it avoided giving a direct reply to the island nation's request of restructuring its debt, according to a media report on Saturday.
Sri Lanka has been urging China to restructure its debt as the nation continues to reel under acute economic crisis. It is estimated that Sri Lanka owes debt payments of USD 1.5 to 2 billion this year to China. Overall China's loans and investments in Sri Lanka were estimated to be more than USD eight billion in the last few years.
But Beijing has not made a public commitment for debt relief assistance to Sri Lanka so far. Quoting a Chinese embassy spokesman, Daily Mirror news website reported that Beijing had communicated to the Sri Lankan Finance Ministry three months ago about its readiness to discuss how to address the debt issue with the Chinese banks.
China encouraged its banks to discuss it. The Chinese position was also communicated during the telephone conversation between Chinese Premier Li Keqiang and then Sri Lankan Prime Minister Mahinda Rajapaksa, he said. We sent proposals to the Finance Ministry. But, there was no response from them. Also, Sri Lanka insisted that it should complete the agreement with the International Monetary Fund (IMF) first. The ball is in Sri Lanka's court, the spokesman said.
Sri Lanka's total bilateral debt was estimated at USD 6.2 billion at the end of 2020 by the IMF. Japan and China hold the largest shares, the report said. India has provided around USD 4 billion to help keep Sri Lanka's economy afloat, mainly through credit lines and swaps this year. Sri Lanka also has USD 14 billion of international sovereign bond debt.