New Sino-Lanka ties :

Boost for business confidence

By Lalin Fernandopulle

The recent visit of the Chinese President opened new chapter in Sino-Lanka relations giving a fresh boost to trade and investment between the two countries.

The business community hailed the visit of Chinese President Xi Jingpin last week which will boost business confidence and the growth momentum of the country.

They said that the large number of agreements signed between the two countries for bilateral trade and investment and also mega development projects will benefit local industries.

Industrial Development Board, Chairman Nawaz Rajabdeen said that China is a true development partner of Sri Lanka and its support to accelerate development in Sri Lanka has no strings attached.

Sino-Lanka relations date back to 1952 with the Rubber-Rice pact and ever since, both countries have maintained cordial relations supporting each other with expertise and funding.

The Mattala Airport, the Hambantotala International Port, Norochcholai coal power plant, the Colombo-Katunayake Expressway, Southern Expressway extension to Matara and the Moragahakanda multi-purpose irrigation project are some of the projects funded by China.“Since 2005 there has been rapid industrial development and many industries have moved from micro to small industries.China has played a significant role in Sri Lanka's development which will trickle down to the grassroots,” Rajabdeen said. Ceylon National Chamber of Industries Chairman Gamini Gunasekera said that the visit of the President of China brings a lot of prospects for businesses such as enhancing trade and investment between the two countries.

It also shows the confidence placed on Sri Lanka by other countries specially with the growth of the stock market and doing business index.

There will be plenty of benefits especially for local industries with mega projects to be set up. It will take time for all these to be realised.

“The agreements signed will bring in large amounts of money to the country which could be used for development,” Gunasekera said.

The business community also hailed the steps taken to commence negotiations for the proposed Free Trade Agreement to be inked between Sri Lanka and China which will increase Sr Lanka's exports to China.

Although Sri Lanka's exports to China increased from US$ 28.39 million in 2005 to US$ 121.63 million in 2013, exports have not grown to reach its full potential. Bilateral trade reached US$ 3.62 billion in 2013.

The two countries signed a Memorandum of Understanding and agreed to set up a Joint Working Group on Trade to study the feasibility of a China-Sri Lanka Free Trade Agreement (FTA) and measures to enhance Sri Lankan exports to China.

Businessmen also said that the visit of the Chinese President after 28 years will expand cooperation and cement trade and economic ties between the two countries. The FTA will enable Sri Lanka to gain easy access to the Chinese market and gradually reduce its trade deficit with the world's second largest economy.