Sri Lanka granted clearance to the Chinese vessel weeks before newly-appointed President Ranil Wickremesinghe took office, according to The Sunday Times of Sri Lanka.
The crisis-hit nation has initiated diplomatic talks with both India and China to reach “an amicable solution” regarding the arrival of the ship to avoid any potential clashes.
Arindam Bagchi, a spokesperson for the Indian foreign ministry, commented on the proposed docking of the Chinese ship, which is expected to be in the port from Aug. 11 to Aug. 17.
“Let me just say that government carefully monitors any development having a bearing on India’s security and economic interests and takes all necessary measures to safeguard them,” Bagchi told reporters.
China has said the Yuan Wang 5 ship is a “research vessel” that will conduct “satellite control and research tracking of China’s satellites in the northwestern part of the Indian Ocean region through August and September.”
The Sri Lankan government leased the entire Hambantota port to China for 99 years in 2017 after failing to repay $1.4 billion in loans to Beijing, resulting in tens of thousands of protesters rallying against the deal.
Debt Restructuring Talks With China
This came after the International Monetary Fund (IMF) urged cash-strapped Sri Lanka to start debt restructuring talks with its bilateral lender China, while it seeks loan packages from the IMF to offset the country’s economic crisis.
Krishna Srinivasan, director of the IMF’s Asia and Pacific department, said that Sri Lanka must “engage with its creditors, both private and official bilateral, on a debt workout to ensure debt sustainability is restored.”
“China is a big creditor, and Sri Lanka has to engage proactively with it on a debt restructuring,” Krishna said in an interview with Reuters.
Sri Lanka defaulted on its debt in May. The country has $51 billion in outstanding foreign debt, $6.5 billion of which is owed to China.
The country owes $3.8 billion to India and at least $3.5 billion to Japan, according to the IMF.
Wickremesinghe declared Sri Lanka bankrupt on July 5 and said the government would need to submit its debt restructuring and sustainability plan to the IMF by August.
Reuters contributed to this report.