Sri Lanka’s President Anura Kumara Dissanayake met with Chinese leader Xi Jinping on Wednesday, following his first overseas trip to India last month.

Sri Lanka needs support from India and China to recover from its worst economic crisis, which led to political changes and Dissanayake’s rise to power.

China was once Sri Lanka’s largest lender, but India stepped in with financial aid after the crisis, providing food, fuel, and medicines.

Sri Lanka’s strategic location off India’s coast makes it a key area in the India-China rivalry. Dissanayake’s visit to China reflects the country’s efforts to balance both powers.

Dissanayake assured India that Sri Lanka would not act in ways that were harmful to its interests.

Sri Lanka declared bankruptcy in April 2022, suspending payments on $83 billion in loans due to a foreign exchange crisis.

China holds 10% of Sri Lanka’s loans, and its support is essential to restructure its external debt.

Sri Lanka borrowed heavily from China for infrastructure projects, but many failed to generate enough revenue to repay loans, leading to leasing a port to China.

The crisis was worsened by economic mismanagement, COVID-19 disruptions, and terrorist attacks in 2019, which devastated the tourism industry.

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