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by M.P. Muttiah

President Chandrika Bandaranaike Kumaratunga's visit to China marks another milestone in the 2000-year old relations between the two countries. Trade, cultural and other agreements that are to be signed would further strengthen the mutual ties between them.

Relations between the two countries date back to 206 BC when a mission from China arrived in Sri Lanka. According to Raja Rata University Vice Chancellor Prof. W.I. Siriweera, 13 missions had been sent to China by the kings of Anuradhapura between 131 AD and 989 AD. In 428 AD, King Mahanama sent a replica of the Sacred Tooth Relic Shrine to the Chinese emperor.

The famous Chinese pilgrim monk Fa Hien visited Sri Lanka in 411-12 AD. During the Ming Dynasty, Admiral Cheng-Ho visited Sri Lanka. In 1411 AD, this Admiral took the king of Kotte, Veera Alkeshwara, as captive to China. There were exchanges of missions between both the countries from 1416-1459 AD. During his second visit to Sri Lanka Cheng-Ho erected a trilingual inscription in Chinese, Persian and Tamil which is kept in the National Museum in Colombo. This stone slab was discovered by a British Engineer, H.F. Tomlin, in 1911 in Galle.

During Tang dynasty closer ties were established with Sri Lanka. Several Chinese monks visited the Island in search of the Dhamma and many Sri Lankan Buddhist monks travelled to China.

Michael Boyn, a Polish Jesuit missionary said in 1652: "There were to be seen in the Persian Gulf four hundred Chinese vessels laden with Zeilan (Sri Lankan) cinnamon, spices and other goods together with porcelain-ware from China."

Some years back a hoard of 6,000 fragments of Chinese ceramic ware was discovered at the ancient port of Allaipiddy in Jaffna. H.W. Codrington said that they were found in Polonnaruwa, Yapahuwa, Kurunegala, Matale, Kalmunai, Talaimannar and in Kurukkalmadam. The most recent find of a Chinese coin was in the village on the Buttala-Passara road found in a rock crevice.

Descendants of Chinese traders settled in the island and set up business in several parts of the country, especially in Galle where places such as China Section (Cheena Koratuwa) and China Bay in Trincomalee bearing evidence of Chinese presence in the country.

The first post-independent government of Sri Lanka was pro-western and anti-communist. Though the People's Republic of China and Sri Lanka accorded each other diplomatic recognition in 1950, the government at that time did not show any interest to expand ties with the giant Asian neighbour. However, Sri Lanka was compelled to sign the historic ``Rubber-Rice Pact" (Ceylon-China Trade Agreement of 1952), which was the foundation stone for the future relations between them.

Late Dr. J.B. Kelegama, who negotiated the Agreement and implemented it over a period of 12 years, in his keynote address at the BMICH on December 20,2002 at the 50th Anniversary celebrations of Rubber-Rice Pact, said: "The Ceylon-China Trade Agreement of 1952 was undoubtedly the most useful trade agreement negotiated by Sri Lanka and one of the most successful and durable trade agreements in the world, having been in operation for thirty years."

Sri Lanka faced a world shortage of rice. The government's commitment was to provide each adult two measures of rice per week at a subsidised price. But, rice was not available from the traditional suppliers- Burma, Thailand and Indo-China. The world market price of rice had risen by 30 percent between 1951 and 1952. Therefore, Sri Lanka was compelled to import 60,000 tons from the United States and 10,000 tons from Ecuador at high prices. Sri Lanka did not have enough foreign exchange resources to pay high prices. The foreign exchange crisis in 1952 caused a serious declining of Sri Lankan export prices. The significant reductions of commodity purchases by the western countries, in particular of natural rubber by the United States, was the cause to the fall of export prices by 23 percent.

The prices of natural rubber declined by 36 percent, of tea by 10 percent and coconut oil by 40 percent. Import prices increased by 8 percent. The trade surplus of Rs. 345 million in 1951 turned into a trade deficit of Rs. 200 million in 1952.

In this situation Sri Lanka attempted to get a loan of $50 million from the United States, but failed.

Sri Lanka's request for favourable prices for rubber exports and rice imports too was turned down.

China came to the rescue. It said it was prepared to sell rice to Sri Lanka in exchange for rubber. It was in this context the "Rubber-Rice Pact" signed in April 1952.

According to Kelegama, "The Agreement was negotiated in the teeth of opposition from some of Commerce Minister R.G. Senanayake's own colleagues in the Cabinet. The Cabinet was advised by the newly established Central Bank with an American Governor. Opposition came from former Commerce Minister Henry Amarasuriya, from the US government, and from some of the local newspapers which carried virulent campaigns against any dealings with China. The US government invoked the Battle Act which prevented it from giving aid to countries selling strategic materials that include rubber, to Communist countries and cut off aid to Sri Lanka. In addition, she stopped selling sulphur needed by Sri Lanka's rubber plantations. This was the price that had to be paid for dealing with China."

Thus in 1953, Sri Lanka agreed to buy 270,000 tons of rice from China and Beijing consented to purchase 50,000 tons of rubber. China had also agreed to pay a premium price for rubber over the world market price and handling charges for rubber exports in Sri Lanka. China's export of rice to Sri Lanka below market price resulted in a benefit of Rs. 92 million in 1953. It had also sold rice at the same price as Burma sold to Sri Lanka.

As a result of the agreement, China granted Rs. 125 million during 1958-68 to meet part of the rubber replanting. This trade agreement was renewed every five years-in 1958, 1962, 1967, 1972 and 1977 and wound up in 1982.

Following the electoral victory of Late Prime Minister S.W.R.D. Bandaranaike, the two countries established full diplomatic relations on February 7, 1957. Both countries took many initiatives to strengthen their bilateral relations in the political, economic, trade and cultural fields.

Politically, Sri Lanka extended its full support for the People's Republic of China's (PRC) "One China" policy. It also consistently supported moves to restore PRC's lawful rights to occupy the seat at the United Nations. Sri Lanka played a pivotal role during Indo-China War in 1962. Late Prime Minister Sirimavo R.D. Bandaranaike took initiatives for a compromise between the two countries.

Sri Lanka also received 7 grants of Rs. 130.4 million and 16 lines of credit amounting Rs. 394.8 million. The most visible symbol of Chinese assistance is the Bandaranaike Memorial International Conference Hall. China has also funded several projects including the Supreme Court Complex, Central Mail Exchange, the re-development of Lady Ridgeway Children's Hospital and others.

Mutual visits of Chinese and Sri Lankan leaders further strengthened the relations between the two countries.

When President Kumaratunga visited China in 1996, several joint venture projects were initiated. China also provided assistance in the form of a long-term subsidised loan and a grant totalling Rs. 1.12 billion.

China was one of the first countries to provide assistance to recover from tsunami disaster. During the visit of Premier Wen Jiabo in April this year, agreement was reached to expand cooperation in various fields including resource development, housing, telecommunication and education.

Both countries agreed to support and promote participation of Chinese enterprises in the construction of the Hambantota Bunkering System and Tank Farm Project, the Nooraichcholai Coal Power Project, Katunayake Expressway Project, Colombo-Katunayake Airport link project, the Phosphate Mining and NPK Compound Fertiliser Project and the Kotte Sewerage System Project. During Wen Jiabo's visit China also provided preferential export buyers credit of US$ 300 million to support co-operation between the two countries. Series of agreements and MoUs were signed. He also inaugurated the reconstruction of the first fisheries harbour project at Panadura.

The Chinese Harbour Engineering Company has already commenced reconstruction of six fisheries harbours out of 10 destroyed by the tsunami, at an estimated cost of Rs. 1.5 billion. Premier Jiabo also pledged to assist Sri Lanka in setting up of Detection and Early Warning Systems for Disasters such as tsunami and earthquakes.

President Kumaratunga's visit this week will further enhance cooperation between the two countries since an agreement is to be signed to establish a Sri Lankan Consulate in Shanghai, the main business centre of China. She would also sign several agreements on trade, economic and cultural co-operation.

China had always proved that she was a friend in need, and friend indeed.

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