China invests US $ 240m in Sri Lanka

By Uditha Kumarasinghe

China, one of the major investment promotion partners of Sri Lanka, invested US$ 240 million in 2013 in Sri Lanka's major development projects.

China was Sri Lanka's second largest importer followed by India which accounted for 21 percent of Sri Lanka's total imports in 2013. In addition, China was the Sri Lanka's eleventh export partner in 2013, an Investment Promotion Ministry spokesman told the Sunday Observer yesterday.

Chinese FDI inflows as at June 2014 have been appropriated under 65 key sectors which includes services (18 projects), hotels and restaurants (16 projects), manufacture (14 projects), health (nine projects) and construction (eight projects).

In the manufacturing sector, China has invested in apparel, food processing, automobiles, electronic and electrical, iron and steel, construction materials, plastics, coconut-based products and machinery and instruments, he said. The spokesman said in the recent past, China and Sri Lanka entered into many investment-related agreements and Memoranda of Understanding. The Central Bank of Sri Lanka and the People's Bank of China entered into a Bilateral Investment Agreement on Bond Investment on August 25, 2014. In 2009, an Investment Facilitation Agreement was signed between the China Development Bank and the Central Bank of Sri Lanka. In addition, China-Sri Lanka Investment promotion agreement was signed in 2007. Sri Lanka has also signed Double Taxation Avoidance Agreement with China in August 11, 2003.

The construction of Southern Expressway, Colombo-Katunayake Expressway, Nelum Pokuna Mahinda Rajapaksa Theatre, Norochcholai coal power plant and Hambantota Port Development Project were some of the China-Sri Lanka mega projects launched during the tenure of President Mahinda Rajapaksa.