Sri Lankan exports to China show remarkable increase
Sri Lankan exports to China has increased remarkably during the past
three years from US$ 37 million in 2006 to US$ 70 million in 2009.
This impressive growth, within a span of three years, came despite
the world economic down turn and China showing a negative export growth
to Sri Lanka in the year 2009.
The structure of Sri Lankan exports to China changed substantially
during 2007-2009 adding more products to the basket of exports.
Sri Lanka, during this period undertook a focused promotional
strategy in introducing a basket of targeted export products to the
Chinese consumer market.
Earlier, most of the exports were in the form of raw materials such
as zirconium ores and titanium ores accounting for more than 40% of the
total exports.
As a result of this targeted promotional campaign there has been a
significant shift towards the export of tea, rubber based products, coir
fiber, gems and jewellery, activated carbon and fish products to China
in the recent period. As a main tool for promotion of these products,
the policy makers for trade and development in Sri Lanka together with
the Mission in Beijing after careful scrutiny identified a selected
number of trade fairs held in China to showcase Sri Lanka products.
Upon closely working with the Chinese Business Support Organizations
and inking with them over 12 Memorandum of Understanding the Embassy was
able to gain concessionary facilities for the participation at these
Chinese trade fairs obtaining the exhibition space free or at very
nominal rates in a number of occasions.
As such during the three year period Sri Lanka participated in a
record number of trade fairs, totalling 52 out of which 25 trade fairs
were singularly for 2009, with a large number of exhibitors showcasing
Sri Lanka potential products in many provinces in China.
The two South Asia Trade Fairs held in 2007 and 2009 stand out
significantly where Sri Lanka participated with 53 and 60 exhibitors
respectively.
The Sri Lanka Mission's efforts of proposing to have this trade fair
as an annual event has finally paid off as from 2009, Commerce Ministry
of China has announced the holding of this event in conjunction with the
Kunming Fair each year.
Further the cooperation between Business Support Organizations of Sri
Lanka and Chinese counterparts were improved to a greater extent in a
variety of areas mainly using the MoUs signed as a basis in promoting a
number of two-way trade and investment delegations, in enhancing trade
and investment relations and facilitating the exchange of technical
know-how in many areas for the development of targeted industries in Sri
Lanka.
With the increase of the average income of the middle income group of
China, the concentrated efforts taken by the Mission in Beijing for the
development of an export destination for Sri Lanka gems in the Chinese
consumer market has yielded productive results by September 2009,
elevating Sri Lanka to the 19th position from that of the 32nd position
which prevailed in 2006 as availed of by the statistics of the Gem and
Jewellery Authority of Sri Lanka. December statistics is expected to
further elevate this position due to very successful participations at
the Gem and Jewellery Fairs both in Beijing and Shanghai in November.
A record number of 20 companies from the gem and jewellery industry
participated in the Beijing show. Apart from this Sector Sri Lanka tea
exports to China grew at a swift pace during the past three years thus
exceeding 1 million kg for the third year in succession from 700000 kg
in 2006.
Although a huge demand for imports from China is visible, which has
hitherto caused a trade imbalance for Sri Lanka, an analysis of the
structure of imports will show that Sri Lanka has mainly imported
fabrics, tractors, vehicle spare parts, machinery and chemicals and that
a large portion is concentrated in the investment and capital goods
segment thus bringing in further benefits indirectly to Sri Lanka due to
the competitive pricing structure of such goods.
On a more substantive level The Mission in Beijing has also organized
together with the Department of Commerce the Joint-Economic Commission
in April 2008 after a lapse of eight years.
The Mission has also actively joined hands with the Department of
Commerce in promoting further tariff concessions to Sri Lanka export
products in the Chinese market under the negotiations on Asia Pacific
Trade Agreement (APTA). China as a member of the Asia Pacific Trade
Agreement has granted duty concessions to Sri Lanka products including
tea, gems and jewellery, coconut based products, fruits, spices,
electrical parts and accessories.
The corridor is open for many other top 50 Sri Lanka exports items to
the international market to seek further concessions.
The Business Support Organizations ought to create awareness among
the Exporters of Sri Lanka about the unexploited market opportunities in
China especially the concessions granted under the APTA.
The reduced duty structure has given a distinct advantage for Sri
Lanka exporters and in utilizing this advantage, it is important that
all consignments (APTA Concessions list) to China include the rules of
origin certificate issued by the Department of Commerce in Sri Lanka.
Further, APTA also paves the way for promotion of investments and
joint ventures with China.
Based on the cumulative rules of origin many joint venture
opportunities are available for the manufacture of light industrial
products including household electrical appliances, leather goods,
agricultural machinery, motorcycles, marble, copper items, aluminum
products, garments and footwear.
With the fourth round of negotiations coming into effect from 2010 it
is expected that Sri Lanka would get more concessions for potential
exports to the Chinese market.
The year 2007, glow in letters of gold in the history of bilateral
relations of Sri Lanka and China as the two countries had witnessed the
celebration of the 50th Anniversary of the establishment of diplomatic
relations. Since his visit to mark the occasion, President Mahinda
Rajapaksa, visited China on two other occasions during the past three
years giving a higher political impetus to the existing friendly ties
between the two nations closely followed by the visit of Prime Minister
Wickremanayake on two more occasions.
The visits by both the Minister of Foreign Affairs and the Minister
of Export Development and International Trade in 2009 further
consolidated the existing ties, thus taking, the partnership between Sri
Lanka and the PRC, to greater heights.
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