Sri Lankan President Sirisena to renegotiate China deals on visit

Sri Lanka`s new president will use a visit to Beijing to renegotiate more than $5.3 billion-worth of Chinese deals signed by his predecessor, a minister said Tuesday, calling it a strategy of "economic self-defence".

AFP| Last Updated: Mar 24, 2015, 17:57 PM IST

Colombo: Sri Lanka`s new president will use a visit to Beijing to renegotiate more than $5.3 billion-worth of Chinese deals signed by his predecessor, a minister said Tuesday, calling it a strategy of "economic self-defence".

President Maithripala Sirisena has already suspended construction work on a major Chinese-funded land reclamation project commissioned by his predecessor Mahinda Rajapakse, who relied heavily on China to rebuild the country`s infrastructure during his decade in power.

On Tuesday, finance minister Ravi Karunanayake said Chinese companies operating in Sri Lanka were "corrupt", using unusually blunt language days before Sirisena`s first state visit to Beijing.

"What we want to tell the (Chinese) President is that the government of China is clean, but Chinese companies (operating in Sri Lanka) are corrupt," said Karunanayake, who will accompany Sirisena on the trip.

"We are basically saying, look at the costs these people have quoted and look at the internationally accepted rate," he told reporters.

Sri Lanka has already complained that it is paying too much interest on the Chinese loans funding its infrastructure development.

On Tuesday Karunanayake said it was also being overcharged by Chinese contractors undertaking the work.

"China understands that we are a small country and that we have a right to economic self-defence," he said.

"It is our taxpayers who will eventually have to foot the bill, that is why we will tell them (China) that we have a right to self-defence and to protect our people."

Sirisena, who starts his three-day China visit on Wednesday, has already suspended work on a $1.4 billion "port city" land reclamation project in Colombo. India considered the scheme a security risk since the island lies only around 30 kilometres (20 miles) off its southeast coast.

Sirisena has also ordered a review of other Beijing-financed projects and loans amid allegations of corruption.

Karunanayake said Sri Lanka`s new government was determined to stamp out corruption, accusing the Rajapakse regime of involvement.

Sirisena made India -- rather than China -- his first foreign trip after winning elections in January, seeking to rebuild ties with Delhi damaged by tensions over Beijing`s influence on the island.

Delhi was reportedly furious after Chinese submarines were allowed to dock in Colombo last year when Rajapakse was still in power.

Beijing has been accused of seeking to develop facilities around the Indian Ocean in a "string of pearls" strategy to counter the rise of rival India and secure its own economic interests.