Sri Lanka asks for equity swap for China debt

Sri Lanka has asked China to swap some of the $8 billion it owes Beijing for equity in infrastructure projects and offered to sell stakes in its companies to Chinese ones, Colombo officials said on Saturday.

The ouster of President Mahinda Rajapaksa, who steered Sri Lanka toward China until his 2015 election defeat, was a setback for relations as his successor has reviewed projects to check if they were fair and legal.

Now President Maithripala Sirisena's government, faced with falling foreign reserves, a balance of payments crunch and few, if any, alternative investors, is heading back into China's embrace, albeit asking for better terms.

Speaking to reporters in Beijing, Sri Lankan Prime Minister Ranil Wickremesinghe said his indebted country was suffering because of global economic uncertainty.