US to urge Lanka to make 'difficult' choices on relationship with China

The United States will urge Sri Lanka to make “difficult but necessary choices” on its economic relations when Secretary of State Mike Pompeo visits there next week, a senior US official said on Thursday, apparently refering to China’s deepening influence over Colombo.

Pompeo will also visit India, the Maldives, and Indonesia on an Asian tour whose main goal is expected to be garnering support in countering China.

His trip comes a week before the November 3 US election in which President Donald Trump has made being tough on China a key part of his campaign to secure a second term.

Pompeo and other US officials have kept up the harsh rhetoric on China, dismissing Beijing’s investments across the globe as “debt diplomacy” and alleging that it leaves poorer nations saddled with too much debt.

Briefing reporters, US officials warned the Sri Lankan government about who they team up with for their economic partnerships, without explicitly naming China.

“We encourage Sri Lanka to review the options we offer for transparent and sustainable economic development in contrast to discriminatory and opaque practises,” said Dean Thompson, the senior State Department official for South and Central Asian affairs.

“We urge Sri Lanka to make difficult but necessary decisions to secure its economic independence for long-term prosperity,” Thompson said.

China's foreign ministry spokesman dismisssed the comments as showing a “Cold War mentality.”

After the US official’s statement,  Sri Lankan government bonds fell heavily. Worries that this Covid-19 crisis could see the country struggle to pay its debts have already seen its bonds slump almost 40 per cent this year. On Friday its 2021 and 2022 dollar-denominated bonds dropped 5 cents or more, according to Tradeweb data.