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Belt and Road

Sri Lanka sinks deeper into China's grasp as debt woes spiral

Colombo to borrow $1bn from China and issue $250mn Panda bonds before year-end

Sri Lankan Prime Minister Ranil Wickremesinghe shakes hands with Chinese President Xi Jinping before a meeting at the Great Hall of the People in Beijing on April 8, 2016.    © Reuters

COLOMBO -- Sri Lanka has again turned to China for a fresh injection of cash, which will come during the final quarter of 2018, as it prepares for a crippling debt repayment cycle that will begin in 2019. But the $1.25 billion in loans will push Sri Lanka deeper into Beijing's grasp.

China is already the largest lender to the South Asian island.

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