Colombo: As Sri Lankan President Maithripala Sirisena begins his State visit to China on Thursday, both Lanka and China have indicated their willingness to settle issues bedeviling their relationship.
As part of its campaign to investigate irregularities and corruption under the Mahinda Rajapaksa regime, the Sirisena-Wickremesinghe government temporarily halted mega Chinese projects like the US$ 1.5 billion Colombo Port City project and the Northern Highway Project. The across the board disruption Chinese projects threatened to spoil Sino-Lanka relations. However, the Lankan government made it clear that it is not against China or Chinese investments, and that it only wants deals to be above board.
On February 27, at the height of the controversy over the Port City Project, Lankan Foreign Minister Mangala Samaraweera told Chinese Premier Li Keqiang in Beijing, that Lanka “will provide a sound legal environment for Chinese investment”, and invited Chinese firms to “make use of the new opportunities” in his country, especially in the railway sector.
Writing in the journal Caixin on March 20, Chinese legal expert Ren Qing described Samarawera’s remarks as “warm words, fresh in everyone’s minds,” reflecting the Chinese interest in making up with Lanka.
President Sirisena’s delegation, which includes ministers from the relevant line ministries, will get a chance to hear the Chinese case from the horse’s mouth. Liu Jianchao, China’s Special envoy to Lanka, told visiting Lankan journalists in Beijing on Tuesday, that China will not renegotiate the loans given .But he was quick to add that it is ready to discuss the issue with the Lankan government. Thus, adjustments are on the cards.
Only now is China becoming aware of the problems of investing abroad, especially the political risks. In 2014, China had pumped US$ 191.8 billion in overseas infrastructure projects. While many of these are sailing smoothly, the high speed rail project in Mexico; the Mecca-Medina light-rail project in Saudi Arabia and an expressway project in Poland, had run into trouble.
Legal expert Ren Qing urges Chinese investors to take into account political risks. He advices them to transfer risks to insurance providers and be ready to use the local legal system and international arbitration to resolve disputes. .
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