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International relations

US yanks $480m aid to Sri Lanka with eye on China

Grant cancellation seen pushing Indian Ocean nation closer to Beijing

Plans to upgrade roads in Sri Lanka and modernize its bus network were part of the U.S. aid package. (Photo by Makoto Okada)

TOKYO -- The U.S. abruptly withdrew $480 million in infrastructure aid to Sri Lanka in an apparent rebuke against the island's growing economic ties with China, but the recent move will likely bring the two Asian countries even closer together.

The grant was to be allocated over five years by Millennium Challenge Corp., a U.S. foreign aid agency, with a focus on tackling poor transportation and logistics infrastructure.

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