Colombo: Sri Lankan President Anura Kumara Dissanayake has announced plans to visit China, the island nation's largest bilateral lender, in mid-January for discussions. The visit follows Sri Lanka's recent completion of a long-delayed foreign debt restructuring process.

China held over half of Sri Lanka's bilateral debt during the 2022 economic crisis, a period when the nation faced a severe shortage of foreign exchange, crippling its ability to import essential goods such as food, fuel, and medicines.

Sri Lanka's economy is now on the path to recovery, bolstered by an International Monetary Fund (IMF) rescue package and austerity measures aimed at stabilizing the government’s finances.

President Dissanayake, who assumed office in September after campaigning on an anti-corruption platform, confirmed his trip during a press briefing, although he did not specify exact dates.

This will be Dissanayake’s second international trip as head of state, following his December 16 visit to India, where he received a red-carpet welcome from Indian Prime Minister Narendra Modi.

The visit underscores the geopolitical competition between India and China in the Indian Ocean region. India, a regional powerhouse, views Sri Lanka as part of its sphere of influence and has been wary of China's increasing presence in the strategically located island nation, which lies along one of the world's busiest shipping routes.

China's substantial investments in Sri Lanka, including port and infrastructure projects, have fueled concerns in New Delhi. The upcoming visit is expected to focus on economic cooperation and further easing Sri Lanka’s financial pressures.

On Friday, Fitch Ratings upgraded Sri Lanka's long-term foreign currency issuer default rating to CCC+, citing reduced government debt service burdens and liquidity risks following the debt restructuring. However, it also noted that "general government debt/GDP and the interest/revenue ratio are likely to stay high in the medium term."

President Dissanayake’s visit to China is anticipated to explore new avenues of cooperation and reinforce economic ties as Sri Lanka continues to recover from its worst financial crisis in decades.