December 11, 2017

Debt-Trap Diplomacy: How China is recovering its loans made to developing countries

In a reminder of how Chinese loans are collateralized by strategically important physical assets, Sri Lanka today formally handed over the Hambantota port to China on a 99-year lease because it is simply not in a position to repay its onerous debt to Beijing.

Next is Pakistan?

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Sri Lanka on Saturday formally handed over the control of the southern deep sea port of Hambantota to the Chinese-led companies that will run its operations, and received its first payment on the 99-year lease, the Colombo Gazette reported.

The China Merchants Port Holdings company owns 85% stake in the Hambantota International Port Group Ltd, which will now restructure the port for an estimated cost of $794 million (Rs 5,119 crore). The total deal is worth $1.1 billion (approximately Rs 6,500 crore) and will help Colombo repay the money it owes Beijing. The Sri Lanka Port Authority controls the rest of the stake in the company.
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Read more at https://scroll.in/latest/860934/sri-lanka-hands-over-hambantota-port-to-chinese-company-on-a-99-year-lease

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