Sri Lanka has paid a Chinese company in millions despite rejecting its shipment of organic fertilizer as substandard, officials said Saturday, even though Colombo is in the throes of a foreign exchange crisis.
The state-run People's Bank of Sri Lanka said it paid Qingdao Seawin Biotech Group $6.87 million in connection with an out-of-court settlement over the shipment.
Fertilizer is one of the items in short supply in Sri Lanka, but authorities said in October tests had shown the shipment was contaminated and banned it from landing anywhere on the island.
China retaliated by blacklisting the bank and threatening international legal action against Colombo. Beijing is a key development partner of Colombo and has given billions of dollars in loans, raising concern that Sri Lanka may be heading for a Chinese debt trap, though both nations have rejected such worries.
The settlement comes ahead of a visit to the island by Chinese Foreign Minister Wang Yi later Saturday.
The state-run People's Bank of Sri Lanka said it paid Qingdao Seawin Biotech Group $6.87 million in connection with an out-of-court settlement over the shipment.
Fertilizer is one of the items in short supply in Sri Lanka, but authorities said in October tests had shown the shipment was contaminated and banned it from landing anywhere on the island.
China retaliated by blacklisting the bank and threatening international legal action against Colombo. Beijing is a key development partner of Colombo and has given billions of dollars in loans, raising concern that Sri Lanka may be heading for a Chinese debt trap, though both nations have rejected such worries.
The settlement comes ahead of a visit to the island by Chinese Foreign Minister Wang Yi later Saturday.
