Sri Lanka says it may take legal action against a Chinese company for not halting work on a 1.5-billion U.S. dollars luxury real estate project.
The project itself is a planned port city on reclaimed land in Sri Lanka's capital, Columbo.
Sri Lanka's new government is reviewing the awarding of the project to China Communications Construction Company amid allegations the previous government breached laws and sidestepped environmental rules to push the deal forward.
The Chinese government has since responded, saying it understands and respects the desire of Sri Lanka's new government to improve its investment environment.
Chinese Foreign Ministry spokesperson Hua Chunying.
"We believe that Sri Lanka will take into account the overall picture of friendly bilateral ties and the basic interests of Sri Lanka's national development to appropriately resolve the relevant issue to maintain the confidence of Chinese companies investing in Sri Lanka."
The Chinese side says the disputed development, along with another port under development in southern Sri Lanka, will create thousands of local jobs.
