Maldives to pull out of free trade agreement with China

Male: The Maldives’ new government will pull out of a free trade agreement (FTA) with China because it was a mistake for the tiny nation to strike such a pact with the world’s second biggest economy, the head of the largest party in the ruling alliance said.

“The trade imbalance between China and the Maldives is so huge that nobody would think of an FTA between such parties,” said Mohamed Nasheed, the chief of the Maldivian Democratic Party, which leads the ruling federal alliance. “China is not buying anything from us. It is a one-way treaty.”

It is the latest sign of a backlash against China in the Maldives, best known for its luxury resorts on palm-fringed coral islands.

Former President Abdul-lah Yameen signed the FTA during a visit to Beijing in December, and the same month his Parliament ratified the treaty despite protests in less than an hour without any debate. On Saturday, as he took office, the new President Ibrahim Mohamed Solih declared the coffers have been “looted” and warned that the country was in financial difficulty after racking up debt with Chinese lenders.

The Maldives is among a number of small countries where China has invested billions of dollars building highways and housing as part of its Belt and Road Initiative.

Maldives move to be a big setback to China
China’s embassy in Male did not respond to a request for a comment on the trade pact.

Critics in the Maldives say a China-led infrastructure boom has left the tiny country of a little more than 400,000 people debt-ridden, and a free trade pact would only make the situation worse given the lopsided nature of the relationship.

Between January to August this year, the Maldives’ imports from China were $342 million, while its exports to China were just $265,270, according to Maldives customs data. The island nation bought meat, agricultural produce, flowers, plants, electronics and toys from China among many other items.