The Chairman at
the Export Development Board (EDB), Prabhash Subasinghe, recently met with
Chinese Embassy Economic and Commercial Advisor Yang Zuoyuan to explore
opportunities for increased trade between the two countries. The discussion
centred on the importance of further improvement of ties between the two
countries to make full use of the mostly untapped trade potential, and the
conference highlighted both countries' early recoveries following the COVID-19
pandemic.
Corresponding to
the International Monetary Fund (IMF), China expects its post-pandemic economic
growth to be 8.2 per cent, which would open up vast opportunities for its
trading partners. Also addressed at the meeting were advantages that could be
gained by preferential market access, where such instruments could use to
reduce the existing trade gap between the two countries.
The reactivation
of the negotiation phase of the proposed China-Sri Lanka Free Trade Agreement (FTA)
was highlighted in this context, as this would serve as a catalyst to improve
trade between Sri Lanka and China by leveraging the opportunities available on
the market. The discussion continued to grow on China International Import Expo
(CIIE), where the EDB arranged the participation of Sri Lanka since its
inception in 2018. It noted that the EDB was making preparations to coordinate
the involvement of Sri Lanka at CIIE 2020, as well.
This event was a
significant move by China to open up its economy and encourage trade. It was a
forum for all countries to exhibit their development achievements and address
global economic and business issues. Also addressed was the value of Chinese
investment in Sri Lanka taking advantage of both countries' regulatory
structure.
It pointed out
that this would also result in increased regional exports using existing FTA
concessions and speeding up trade relations. China is Sri Lanka's principal
trading partner. In 2019, overall trade in goods between the two countries
stood at $4.3 billion. Being Sri Lanka's biggest import destination, total
imports from China to Sri Lanka last year amounted to $4 billion, representing
21 per cent of total imports. In 2019, Sri Lanka exported $229 million in full
goods to China that included tea, activated carbon, electronic and electrical
devices, coir fibre, clothing, mineral sands, petroleum products, pneumatic and
withdrawn rubber tires, and tubes. Sri Lankan exporters thus have an excellent
opportunity to explore this lucrative market, particularly for those involved
in apparel, spices, fresh fruits, and other food and farm products.
OSL Take: The
Belt and Road Initiative expects to possibly become the most significant
infrastructure project ever involving 68 countries around the world,
resurrecting the old "Silk Road" that uses to link Europe and Asia. The
initiative primarily aims to develop economic and trade activities along the
route dynamic and vigorous, once again establishing it as the world's most
dominant trading area. The Belt and Road Initiative will accompany the
government of Sri Lanka's aim of establishing Sri Lanka as a global hub and
also open avenues for innumerable opportunities.
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