Lanka should not compete with China and India


Sri Lanka’s export sector is still struggling to recover as it depends on traditional markets of the west. But the island nation is in close proximity to two of the fastest growing economies of the world, China and India, and needs to explore these markets fully and create access for its exports.

The centre of gravity is shifting from the West to the East but 60 percent of Sri Lanka’s exports still find their way to European and US markets.

"Sri Lanka needs to trade more with China, India and the rest of South East Asia if its export sector is to grow. In this regard, there is a lot more that the private sector can do as much as the government," Dr. Anura Ekanayake, Chairman Ceylon Chamber of Commerce, told a business forum organised by the Institute of Chartered Accountants of Sri Lanka earlier this week

Dr. Yeah Kim Leng, Chief Economist, RAM Holdings noted that Sri Lanka had to diversify its export basket and also tap in the emerging Asian markets.

He said a bulk of Sri Lanka’s exports were to the G7 economies and this was why exports were slow to recover as these economies still face uncertainties about their recovery after the global financial crisis.

According to Dr. Leng, demand for exports to emerging economies, especially the BRIC nations (Brazil, Russia, India and China) are seeing a strong recovery and this is where Sri Lanka needs to concentrate its exports to.

"Sri Lanka should not compete with India or China but must find ways to complement these economies," Dr. Leng said.

He said stronger intraregional ties would not only boost trade but also mobilise investments.

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