Sri Lanka wears the visage of beauty.

The monolith Sigiriya, turquoise waters in front of golden sand, the ruined city of Anuradhapura - all this attracted two million tourists a year to the island in the Indian Ocean before the outbreak of the pandemic.

After the Indians and the British, most flew in from China.

Henrik Ankenbrand

Economic correspondent for China based in Shanghai.

  • Follow I follow

Claudia Bröll

Political correspondent for Africa based in Cape Town.

  • Follow I follow

Manfred Schaefers

Business correspondent in Berlin.

  • Follow I follow

This week, however, Sri Lanka's ambassador showed what desperation is at his official residence in Beijing.

More people live in China's capital than on the island 5,000 kilometers away, where there is hardly any money left for food, medicine and petrol.

But the diplomat's plea that the Chinese should not only buy tea and sapphires to save his island state, but also travel to its beaches in the hundreds of thousands, seemed like a feverish dream in times of the plague.

Like everywhere else in the world, the number of Chinese tourists in Sri Lanka fell to practically zero with the outbreak of the corona virus and is likely to stay there for a long time.

After all, tens of millions of Chinese in the People's Republic, which has been riddled with lockdowns, are not even allowed to step outside their own front door - let alone cross the borders that have been tightly closed since 2020.

But China can definitely save Sri Lanka from catastrophe.

In 2014, Xi Jinping landed on the island.

The Chinese President enthused that it was a “magnificent pearl” and immediately signed twenty investment contracts.

Chinese state-owned companies should build roads, a power plant and an airport.

Financed with loans from Beijing's development banks.

Investment Treaties with Sri Lanka

Eight years later, Sri Lanka is insolvent and the president fled to the Maldives after mass protests.

China should help, demands the International Monetary Fund.

But not with tourism, but with a haircut.

The People's Republic is the island's largest creditor - just as it is the largest creditor of the developing countries of the world as a whole.

According to the International Monetary Fund, around 60 percent of them are currently having problems servicing their debts.

The rise in interest rates in the US, high energy costs and weaker growth are exacerbating the problems.

So far, China has usually been tough in such cases and insisted on repayment.

Because the country itself would not have an overview of where it has outstanding loans, the “next major debt crisis in the global South” is threatening as a result.

warns Germany's chancellor.

That would not only plunge China and the developing countries into a “major economic and financial crisis”, but would also “not leave the rest of the world unaffected”, according to Olaf Scholz (SPD).

After the most recent consultations in mid-July among the twenty important economic nations (G20), Berlin assumes that there is a risk of “debt stress” in thirty developing countries and sixty particularly poor countries.

The consequences of the pressing legacy are obvious: the higher the debt service, the less money is available for central tasks such as food security, infrastructure, education and health.

The federal government has long been trying to involve China more closely in solving the problem.

There are many indications that the country has become a major donor, but how much China is involved in which regions of the world is not known, and perhaps nobody knows.

This is also due to the fact that there are many lenders in the huge Middle Kingdom

who get involved in the big game of raw materials.

There is simply a lack of transparency.