Third South Asian Commodity Fair in Kunming :

Sri Lanka reaps harvest

by our Special Correspondent in Beijing

Bilateral trade between China and South Asia has developed vigorously in the last few years, with two-way trade volume jumping to 66 billion U.S. dollars last year which stood at mere 5.2 billion USD in year 2000.

This was disclosed at the Third South Asian Countries Commodity Fair (SACCF) held at the International Convention and Exhibition Centre in Kunming, the city of 'Eternal Spring' in China recently.

The SACC Fair also provided an economic cooperation platform which links the traders from South Asian Countries and ASEAN countries to the traders from China.

The Fair was opened by Deputy Prime Minister of China, Wang Qishan, in the presence of the Deputy Minister of Commerce of China and leading officials of the Yunnan Province CCPIT and related agencies. Sri Lanka Deputy Minister of Finance and Planning and the Senior Advisor to the President, Dr. Sarath Amunugama also graced the occasion together with other Government delegations from South Asian countries as well as their Ministers of International Trade, Ambassadors and Commercial Counsellors.

The Fair was held alongside the 18th Kunming imports and exports fair and covered an area of 5,000 square metres with 380 standard booths, increased from 300 last year promoting services for cross-border trade, investment, and economic and technological cooperation from the South Asian Countries. The fair was jointly hosted by the Chinese Ministry of Commerce, seven of China's provincial governments - Yunnan, Sichuan, Guizhou, Guangxi, Tibet, Chongqing and Chengdu and the trade ministries of Afghanistan, Pakistan, India, the Maldives, Bangladesh, Nepal and Sri Lanka.

The enthusiasm for participation among the Sri Lankan exporters was visible. Sri Lanka participated with a record number of participants totalling more than 80 enterprises/companies displaying their products ranging from tea, coir products, gems and jewellery, spices and rubber-based products, ayurvedic products, handicrafts and light industrial products such as cables and solar power equipment at the Sri Lanka pavilion, attracting a whole host of opportunities. The success of participation at two previous events encouraged Sri Lanka to be the largest exhibitor this time, bringing in much admiration from the Chinese officials for the optimism showed by the Sri Lanka exporters to step into the Chinese market. Sri Lanka exports to China has increased from 34 million USD in 2006 to 70 million USD in 2009.

For Sri Lanka, this event was also timely for exploring export opportunities in the context of the Asia Pacific Trade Agreement (APTA). It was evident that Sri Lanka exhibitors reaped many positive responses during the trade fair. The Embassy of Sri Lanka together with the Sri Lanka Tourism and Export Development Board had information booths at the venue in which publicity material on Sri Lanka were displayed and distributed to the business visitors. Besides this, the samples of Sri Lanka tea products collected from member-exporters were also attractively displayed and the opportunity was given for visitors to taste the distinct flavour of Ceylon Tea.

China and South Asian Countries have been friendly neighbours and cooperated closely on many international and regional affairs for decades, with the dimension of economic and trade cooperation expanding and bilateral trade volume growing rapidly. China is now determined to boost imports from South Asia, and during the past few years have been taking a series of measures to improve trade with the South Asian countries, including cutting down tariffs, aiding import and export, and encouraging imports from South Asian countries. Holding such a trade fair dedicated to South Asian products was one such important measure taken by China to promote fruitful trade and economic cooperation between China and South Asian countries and to expand China's imports from South Asian countries.

At a time both Chinese and South Asian economies were being hit by the global financial crisis, which featured plunging exports, deceleration of economic growth and factory closure, the fair is the Chinese government's contribution to South Asia providing means to import more from South Asian nations and create opportunities for these countries to overcome the negative effects of the financial crisis.

To encourage a large number of small and medium scale enterprises from South Asia, the fair organisers provided participants with free exhibition facilities and met all transportation costs within China, as well as assisting with customs clearance and product promotion.

Window of opportunity

Under these circumstances, the China Export and Import Fair, popularly called Kunming Fair is the window of opportunity created by the Yunnan province to reach out to South and South-east Asia. The origins of the fair dates back to June 1993. It attracts about 5,000 overseas business persons from around 40 countries. There are over 2,000 booths at each session, which include many international joint venture companies and companies from other Asian and Southeast Asian countries. It is also categorised as one of the top ten trade fairs in China. Therefore having the third SACTF fair in conjunction with the Kunming Fair for the second successive year paves the way for a wider interaction and business opportunities for South Asian business community to reach out to the region.

The Chinese Ministry of Commerce and the People's Government of Yunan Province warmly welcomed the Sri Lanka government delegations headed by Dr. Sarath Amunugama, Deputy Minister of Finance and Planning and the Senior Advisor to the President that also included Ambassador Karunathilake Amunugama, Director Export Development Board, Madhawa Waidiyathilake, the Commercial Counsellor Alexi Gunasekera and officials from the Sri Lanka Consulate in Chengdu.

In parallel with the fair, there were three international events held: the First GMS Economic Corridor Forum, the Sixth 'Introduction of Projects in Southwest China, for Chinese Entrepreneurs in ASEAN', and the fourth China-South Asia Business Forum. There was also another event of interest - the fourth "Kunming-Fair-Cup" International Business Golf Invitational Tournament'. This was in keeping with the 'One Fair, Three Forums, One Cup' theme of the event.

Dr Amunugama was accorded the honour of delivering the keynote address at the 5th South Asia - China Business forum. During his speech entitled "Strengthening China-South Asia Cooperation on the Road to Global Economic Recovery" he expressed the fair acted as a catalyst providing a mechanism to establish firm linkages between the Chinese and the SAARC industrial and commercial circles to strengthen collaboration in the background of ever-increasing shared trust drawing lessons from the economic downturn that affected the countries the world over in the last two years.

In adding to these factors, he said that we have been provided with a conducive environment to advance greater cooperation - favourable geographical conditions linkages and networks are in place and most importantly, support from our people. China is South Asia's biggest neighbour and our good-neighbourly relations are deep-rooted. With a combined population that account for over 40% of the world's total, both these regions put together is a sizeable market component. As responsible stakeholders we all face the task of developing our economies to improve living standards of our people. Dr. Amunugama also elaborated on the conducive environment that has been created in Sri Lanka for investments from China and the world after successfully wiping out terrorism.

Addressing the forum, Ambassador Karunathilake Amunugama presenting his views on Government Stimulation Policies said one factor to be noted was that economic growth depends on continuous high investments and innovations leading to improvement in productivity and not temporary increases in consumption. It should facilitate the private sector to invest more and have policies to make people work harder. He further said Asia must look at boosting domestic demand amongst the Asian nations as a first measure of overcoming the drawbacks of the global financial crisis. Elaborating further he said that Asian countries themselves have a big enough market to generate the expected demand. What is required is for countries to make concerted efforts under regional co-operative platforms. He then referred to Sri Lanka being at the epicentre of opportunity - having already laid the foundation for an era of economic development with the defeat of terrorism. He noted that coupled with Sri Lanka's strategic location point in the Indian Ocean, Sri Lanka is now poised to take off.

Yunnan and foreign trade

During the visit, the Sri Lankan Minister and the delegation had meetings with Qin Guangrong, Governor of Yunnan Province, Wan Jifei, Chairman, China Council for the Promotion of International Trade where matters related to Trade and Investment Promotion between Sri Lank and China, especially in the Yunnan province was discussed. Governor of Yunnan province has already scheduled a visit to Sri Lanka in August 2010 subsequent to the fact-finding mission of Yunnan province that took place during the latter part of last year with the visit by Vice Governor.

Due to the geographic location, Yunnan is an important place in China to develop foreign trade. Yunnan is the only way to combine the East, Southeast and South Asian regions as well as link the Indian Ocean and Pacific Ocean. The strategic station is irreplaceable, and the combination of China and the South Asian market via Yunnan will form an emerging market significantly impacting the world economy.

Sri Lanka and China Trade & Investment Forum was also held during the fair where Commercial Counsellor highlighted the encouraging Business and Investment Environment for Chinese investor that is being formed especially after the defeat of terrorism. He also pointed out that China has become the leading development partner for Sri Lanka in the year 2009 and the significant increase of Sri Lanka's Exports to China from 34 million USD in 2006 to 70 million USD in 2009. However he pointed out that there is plenty of opportunity for Chinese investors to locate in Sri Lanka which will then complete a very productive economic cooperation partnership between the two countries. He further said that all the parts of the country are now being open for development with the advent of peace. The key sectors of electricity, highways, irrigation, water supply, ports and airports, transport facilities, cities and investment zones have been prioritised for development throughout the country and urged the Investors who were present to make the maximum use of the opportunity.

Sri Lanka presentation was commended by many participants for having a Chinese version simultaneously thus giving a clear picture of what peaceful Sri Lanka could offer for the Chinese Investor.

The fair also provided the opportunity for a high level meeting between China and officials from the South Asian Association for Regional Cooperation (SAARC). The meeting focused on the global economic situation, enhancing cooperation, removing trade protectionism, and poverty reduction. The Second meeting of the Senior Commerce Officials was held alongside the fair and the Commercial Counsellor attended the meeting. He stressed the importance of having the fair on an annual basis and with the same facilities provided in order to encourage the small and medium sector exporters to achieve greater results and also urged the officials to encourage more Chinese investors to invest in Sri Lanka and to organise a fact-finding mission. During the meeting the Chinese officials suggested of a probable China-South Asia Free Trade Agreement in the future for more closer Economic Cooperation.

Yunnan is the only province adjacent to so many countries of ASEAN and has the longest land boundary and the most landways to the GMS and ASEAN countries. When the west route of the Pan-Asian Railway and the channel of China and Myanmar through land and water transport opens, the transportation cost will be further lessened and the hinterland will be further enlarged. Yunnan also possesses outstanding advantages of historic culture, infrastructure and industry structure as well as years of regional economic cooperation experiences.

At the end of the Fair it was evident that the exhibitors of all sectors has made the full use of this platform to strengthen exchanges, increase mutual understanding and enhance fruitful cooperation, create market opportunities for Sri Lanka products and made new contribution to China-Sri Lanka business cooperation.

The Sri Lanka Export Development Board (EDB) in collaboration with the Sri Lanka Embassy in China organised Sri Lanka's participation at the Third South Asian Countries' Commodity Fair.