China, the leading development partner of Sri Lanka

Prime Minister tells CIFIT 2011:

Prime Minister D.M. Jayaratne took part in the inauguration of the China International Fair for Investment and Trade (CIFIT) in Xiamen, China recently. Here is the keynote address he made at the inauguration of the event.

“It gives me immense pleasure to be present at the inauguration of the China International Fair for Investment and Trade (CIFIT) 2011 in the beautiful city of Xiamen. I appreciate the good work of the Provincial Government of Fujian and the organisers. I congratulate the Provincial Government of Fujian, and the organisers on the success of the International Investment and Trade Forum 2011.

I take great pleasure to be associated with the timely international investment forum at which many countries from around the world have come together to share their experiences and potential in the field of investment and trade. The principal organiser of the event - the Ministry of Commerce of China and the co-sponsors, namely United Nations Conference on Trade and Development (UNCTAD), United Nations Industrial Development Organisation (UNIDO), the World Association of Investment Promotion Agencies (WAIPA) and the World Bank International Finance Corporation (WBIFC) had made a collective effort to make it a big success.

If not for the untiring efforts of the Governor of the Fujian Province, the Vice Governor and officials of the Ministry of Foreign Affairs of the Fujian Province, this major event would not have been so successful.

The CIFIT provides a window for an extensive dialogue on global economic issues, trends of international capital flows, new investment priorities and emerging industries such as alternative energy, energy conservation and environment protection, electronic information creative culture, and service outsourcing in China, offering participants the most authoritative and up-to-date information, on investment in China and beyond.

Since the CIFIT is poised to become the world’s most prestigious international investment exposition, Sri Lanka would like to engage with the Forum, having in mind the long-term prospects in terms of promotion of trade, tourism and investment between our countries.

If I may refer to Sri Lanka’s relations with China, our relations are as old as the nation’s history, which goes back even beyond the fourth century BC.

The earliest authenticated reference to Sri Lanka’s links with China is made by the Roman historian and naturalist Pliny. He spoke of stalwart men of light complexion, blue slit eyes, coarse voices and lacking a common language, who called for trade at the port of Mantota in the Mannar coast, a flourishing trade entry point at that time in the island.

Fa-Xian, the celebrated Chinese Buddhist monk who travelled to Sri Lanka to acquire Buddhist scriptures between the years 399 and 412 AD, records that he was greatly moved to find silks in the island from his native China.

Contemporary Chinese records maintain that Persia-bound vessels from China traded in gems, spices and ivory at the flourishing port of Mantota. Ivory was highly valued in China, where expert Chinese craftsmen turned out exquisite carvings from it.

Ancient missions

In 527 AD, King Silakala had sent an Ambassador to the Chinese Emperor’s Court. Although this Mission had been of a purely religious nature, the establishment of political relations and securing closer trade contacts would, no doubt, have been its other motives.

With the installation of the Tang Dynasty in China (in 618-907 AD), closer ties were established with Sri Lanka. Several Chinese monks visited the island in search of the Dhamma, in addition to the many Sri Lankan Buddhist monks who travelled to China.

A large collection of Chinese coins, in total 1,352, were found almost a hundred years ago in Yapahuwa, the early 13th century stronghold of King Buwanekabahu the First.

Three of the coins analysed had been from the Tang Dynasty while all the others were from the Northern and Southern Song Dynasties. More collections of coins and artefacts had been discovered in places such as Buttala and Nagapatnam, suggesting that relations with China dated back hundreds of years.

The strategic location in the Indian Ocean has, from time immemorial, earned a reputation for Sri Lanka as a destination for entrepot trade and there is evidence that merchants from the East including China, traded with merchants of the West in Sri Lanka.

A Chinese Admiral, Zheng He undertook an expedition to this country in the 15th century AD, which was another landmark event in the history of our relations. It is also indicative that he had come to Sri Lanka on three consecutive occasions.

Modern day ties with China accelerated with the Rubber-Rice Pact signed between the two countries in 1952 even before Sri Lanka established diplomatic relations with China. Diplomatic relations with the People’s Republic of China and resident embassies in each other’s capital were established in 1957. Since then China has stood firmly as a close friend and ally of Sri Lanka.

Sri Lanka appreciates China’s understanding of the situation in the island and its positive approach towards supporting Sri Lanka in its efforts to overcome adverse propaganda launched by anti-Sri Lanka elements with vested interests. China’s open support for safeguarding Sri Lanka’s sovereignty and territorial integrity is well acknowledged by Sri Lanka with a deep sense of gratitude.

Bilateral relations

During the past five years, under the leadership of President Mahinda Rajapaksa, we have developed unprecedented strong bilateral relations not only with the Central Government, but also with the Provincial Governments of China. The relations have been consolidated by regular high level exchange of visits between the two countries. In that context, I consider my visit to the Fujian Province this time as an important landmark in the history of our relations.

Having eliminated terrorism from our soil, Sri Lanka is on a fast track approach to develop its infrastructure for a solid and sustainable economic and social development. In that context we appreciate the unreserved support and assistance extended by friendly countries including China.

China has become the largest development partner and an important investor in Sri Lanka especially in infrastructure projects. There are plenty of opportunities and areas that we can exploit for mutual benefit.

Sri Lanka’s exports to China have, in the recent past, increased tremendously reaching US$ 102 million in 2010 from a mere US$ 37 million in 2006. The structure of Sri Lankan exports to China has changed substantially, adding more products to the basket of exports. There has been a significant shift towards the export of tea, coir, fibre, gems and jewellery, rubber-based products and fish products to China in the recent period.

Sri Lanka mainly imports tractors, vehicle spare parts, machinery, fabrics and chemicals from China.

The Asia Pacific Trade Agreement (APTA) among a number of South Asian and East Asian countries has given us a framework to expand bilateral trade through a Preferential Trading Agreement.

Investment opportunities

Sri Lanka offers a wide variety of investment opportunities and incentives to foreign investors. In fact, China has also invested in Sri Lanka in a number of development projects such as food processing, deep sea fishing, rubber and rubber products, manufacture of motorcycles and bicycles, mini hydro power generation plant and apparel and textile manufactures.

We invite investors in such sectors as infrastructure, electronics, light engineering, textiles, garments and fashion accessories, rubber, computer software, tourism, recreation and leisure.

Sri Lanka is also a very attractive destination for leisure travellers. Businessmen who may initially come as tourists could also get a glimpse of the business opportunities in Sri Lanka to return later.

The International Investment Forum 2011 has given us a good opportunity to further strengthen the cooperation between our countries in the field of investment, trade, tourism and various other areas of interest. We should therefore strongly support and actively participate in the CIFIT in the years to come, with the view to exploit its full potential.

In conclusion, I would like to express my sincere gratitude to the organisers for giving me this opportunity to deliver the keynote address at this important forum. I wish the International Investment Forum in 2011 great success!”