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Last updated: 18 January, 2011 - Published 15:57 GMT
 
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China, the biggest lender
 
China which has two trillion dollars of foreign exchange reserves is reported to have overtaken the World Bank as the biggest lender to developing countries.

China has also become Sri Lanka's top bilateral lender up to September 2010, displacing Japan both in commitments and disbursements.

Chinese money

According to research by the Financial Times newspaper, China's Development Bank and Export Import Bank agreed loans of at least one hundred and ten billion dollars in the past two years, which is about ten per cent more than the World Bank.

Strategic objectives

Analysts say China is using its financial strength to fund loans which help promote its strategic objectives notably its drive to secure access to natural resources.

Chinese deals in the period included major loan-for-oil agreements with Venezuela, Russia and Brazil.

The conditions for the loans are also much more flexible than the World Bank, say the analysts. Often World Bank loans try to influence human rights and other issues of the receivers of aid.

Flood aid to Sri Lanka

Reports from Beijing revealed that China has decided to provide emergency humanitarian aid to Sri Lanka to help the flood hit areas, Foreign Ministry spokesman Hong Lei had told Xinhua news on Tuesday.

"China will offer emergency humanitarian aid worth 10 million yuan (about1.52 million U.S. dollars) to Sri Lanka," Hong told a news briefing, adding that Chinese Foreign Minister Yang Jiechi extended condolences to his Sri Lankan counterpart.

Highest ever commitment

“Sri Lanka has racked up 2,481 million US dollars in bi-lateral and multi-lateral financing up to September 2010, the highest ever volume of foreign financing commitments, with China leading the way with 668 million US dollars of export credits” say Lankbusiness online.

 
 
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