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Sri Lanka

Sri Lanka meltdown exposes China loan policy: 5 things to know

Beijing could complicate Colombo's IMF talks as other borrowers watch closely

Chinese Foreign Minister Wang Yi watches as bilateral agreements are exchanged with Sri Lanka in Colombo in January.   © AP

BANGKOK -- China's economic stakes in Sri Lanka are in focus as the bankrupt South Asian nation scrapes the last of its usable foreign reserves. By late April those funds had shrunk to $50 million, a government minister revealed to parliament in a rare moment of candor.

The admission by then Finance Minister Ali Sabry inadvertently exposed the strings attached to a Chinese financial lifeline the government of ultranationalist President Gotabaya Rajapaksa had hitherto concealed to boost the official reserve figures, which were hovering over $1.5 billion during the first quarter of this year.

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