China has offered Sri Lanka about $2.2 billion in loans for infrastructure projects and a free trade pact, the island nation said on Wednesday, moves that could stoke fresh unease in India about Beijing''s expanding influence in its neighbourhood.
Sri Lankan Foreign Minister G.L. Peiris, however, said the agreements with China including a separate one to enhance defence ties, should not be a cause for concern. "But it''s not at the expense of any other country, there''s no danger to any other country," Peiris said in answer to a question on fears in India about China''s deepening ties with Sri Lanka.
Peiris was speaking to journalists during an official visit to China by Sri Lankan President Mahinda Rajapaksa. Located just off India''s southern tips, the island of 21 million has become a visible front in the competition between the Asian giants, where mutual suspicion and commercial ambition have led to a race for construction projects. China and Sri Lanka agreed on $1.5 billion in private-sector investment in the northern express highway, which links Kandy in the central part of Sri Lanka, to Jaffna in the north, Peiris said.