Sri Lanka, hit by the crisis, asked China to restructure its debt.

Sri Lanka's troubled president has asked China to restructure its debt payments to help the South Asian nation cope with its deteriorating financial condition. Gotabaya Rajapaksa revealed this on Sunday at a meeting with Chinese Foreign Minister Wang Yi.

Over the past decade, China has allocated more than $5 billion (£3.7 billion) to Sri Lanka for roads, airports, and ports. However, critics say the money is spent on unnecessary, low-yield programs. "The president said it would be a great relief for the country if attention could be paid to debt restructuring as a solution to the economic crisis after the Covid-19 pandemic," said Rajapaksa's office. .

The statement also said China had been asked to provide "preferential terms" for its exports to Sri Lanka, which last year amounted to about $3.5 billion, without giving further details. Rajapaksa also suggested allowing Chinese tourists to return to Sri Lanka, subject to strict coronavirus regulations.

Before the pandemic, China was the primary source of Sri Lankan tourists, importing more goods from China than any other country.

In recent months, Sri Lanka has experienced a severe debt and currency crisis, coupled with the loss of tourist income during the pandemic. After international financial markets, the Asian Development Bank, and Japan, China is Sri Lanka's fourth-largest lender.

The country has received billions in low-interest loans from China, but the island nation is embroiled in a currency crisis that some analysts say has brought it to the brink of bankruptcy.

Sri Lanka will repay about $4.5 billion in debt this year, starting with $500 million in international government bonds maturing on January 18.

The country's central bank has repeatedly reassured investors that all their debts will be repaid, saying funds to pay off bonds had been distributed this month. Sri Lanka is an integral part of China's One Belt, One Road Initiative, a long-term plan to fund and build infrastructure that connects China with the rest of the world.

However, several countries, including the United States, have called the project a "debt trap" for smaller, poorer countries. In response, Beijing has always denied the accusations and accused some in the West of promoting the story to damage its image.