As we know, Sri Lanka is facing a deep economic crisis and is literally bankrupt as the country cannot settle local and international loans. Within this background, the government of Sri Lanka is trying to secure an IMF bailout. However, to get the IMF bailout, Sri Lanka needs favorable responses from lender countries who have provided major loans to Sri Lanka.
China is one such major lender nation to Sri Lanka, and the assurance /promise from China is more helpful to Sri Lanka in convincing IMF that the background for debt restructuring is on the correct path.
With such background, a letter has been circulating for weeks on social media. The letter says China cannot amortize Sri Lanka’s loans as China is also suffering from economic problems due to the consequences of Covid 19 pandemic.
Let’s look at the claim in detail.
Social Media Posts
A letter is being spread on WhatsApp, trying to convince that the letter was issued from the Chinese Embassy, Colombo, addressed to President Ranil Wickremesinghe.
The area highlighted on social media posts is read below.
“The Chinese Economy is still recovering from the shocks of the Covid-19 pandemic, which is pushing up the inflation levels of the country. Further, our banking sector is already stressed due to the slowdown in the real estate sector. Therefore, we regret to inform that China would not be able to amortise the outstanding debt. However, we are ready to relax the repayment schedule by offering a 5 year moratorium on bilateral and commercial loan repayments.”
Here is a Facebook post with the same purported letter. Archived
We searched whether any international media/local media had reported the stance of the Chinese government as stated by the viral letter. However, there were no such reports.
Then, we checked the Chinese government-based web media and other diplomacy-based communication tools like the official Twitter accounts of the Chinese government and the Colombo-based Chinese Embassy. But, again, there were no any letter or stances like this.
After that, to check the authenticity of this letter, we contacted the Chinese Embassy in Colombo on the 24th of January. Luo Chong, Spokesperson/Chief of the Political Section of the Chinese Embassy in Colombo, Sri Lanka. He said that the letter was clearly forged and had fabricated details.
Consequently, the Chinese Embassy in Colombo released a statement. It rejected the letter’s content, which had been created by misusing the official letterhead of the Embassy, and urged the public to follow official channels for verified information.
And also, the President’s Media Division of Sri Lanka denied the letter and said the letter was fake.
Meanwhile, the Criminal Investigation Department (CID) of Sri Lanka initiated a probe to investigate the beginning of the virally spreading letter in social media. Media reports about the probe can be read here and here. Archived& Archived
China’s Statements On Debt Restructuring plans of Sri Lanka
Meanwhile, Reuters reported that the Chinese state-owned ExIm bank had written a letter to the Finance Ministry of Sri Lanka on the 19th of January and promised two years debt moratorium and would support gaining 2.9 billion dollars in IMF bailout. However, the actual letter has not been published so far by any media agency or diplomats. Reuters report can be found here. Archived.
The topic was recently fueled as US diplomat Nuland diplomat stated, “China has not done enough on Sri Lanka debt restructuring.” However, China was soon to China respond to Nuland’s remarks.
Chinese Foreign Ministry Spokesperson Mao Ning says, “What was said by the US side does not reflect the truth. The Export-Import Bank of China has already provided Sri Lanka with a letter to express support for its debt sustainability. Sri Lanka has responded positively and thanked China for that. Rather than jabbing fingers at China’s close cooperation with Sri Lanka, the US might as well show some sincerity and actually do something to help Sri Lanka weather through the current difficulties.” Full report here
Furthermore, Mao Ning adds that China is willing to extend Sri Lanka’s debt maturity in 2022 & 2023 to help alleviate the pressure of short-term debt and is also willing to negotiate with Sri Lanka on the disposal of medium & long-term debts and do its best to promote Sri Lanka to achieve debt sustainability as reported here during a press conference on 3rd February. Full report here
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According to our investigation, we found out that the viral letter on social media claiming to be China’s stance on the debt restructuring of Sri Lanka is fake and forged. Along with the Chinese Embassy in Colombo, the Sri Lankan government also rejects receiving such a letter.
Title:The letter claiming that China is not ready to amortize the Outstanding Debt of Sri Lanka is Forged – Chinese Embassy in ColomboFact Check By: Kalana Krishantha