China: We need immediate action to solve Sino-Lanka trade gap

As Sri Lanka–China trade and business cooperation grew to new levels, China announced that it is now determined to narrow the $2.4 Bn bilateral trade gap so that its trade partner Sri Lanka can reap bigger benefits. Sri Lanka meanwhile, hailed the forthcoming China-Sri Lanka FTA as one of the greatest international trade initiatives that the country has taken to-date. "From China’s perspective, our trade deficit with Sri Lanka is too large. Sri Lanka is an important South Asian partner for Sri Lanka. Sri Lanka will be much much more important to China in the future. We need immediate action to solve the trade imbalance between China and Sri Lanka!" announced a keen Wu Jianghao, Chinese Ambassador to Sri Lanka on 26 September in Colombo.

Jianghao was addressing the inauguration event of Sri Lanka-China Business Meeting at Cinnamon Lake Hotel in Colombo on 26 September. The event, jointly sponsored by Chinese Ministry of Commerce and Ministry of industry and Commerce of Sri Lanka and organised by the Trade Development Bureau of Chinese Ministry of Commerce with the Chinese Embassy in Colombo, hosted the 36 member strong trade, business and investment delegation to arrive from China to Sri Lanka led by Jia Guoyong, the Vice Director General of Chinese Trade Development Bureau (TDB). This is one of the strongest such Chinese delegations to arrive in recent Lankan trade history. The 36 strong member Chinese delegation consists of unprecedented Chinese private sector representation with 23 companies taking part from the sectors of glass manufacture, mining/minerals, agriculture, polymer/petroleum bi-products, chemicals, and real estate. Three of the firms are in Fortune 500 list- Sinochem Group ($49.5 Bn revenue), China Minmetals ($ 37.5Bn) and Sinosteel ($27.2Bn). Among other visiting firms are Anhui Light Industries International Co., Ltd. (ALIC), Zibo Top Arts, Zibo Honghan Trading, Shandong Hanbang Household Glassware, Zibo Unishine, XinHe Commerce and trade Refco Group, Hebel Kaifa Glassware, AVIC International Holding, CITIC International, Chinatex, China National Township, Sinosteel Raw Materials, Sinochem Guangdong, and Sinochem Plastics.

In 2012, as a result of 20% increase in imports from China, bilateral trade gap between China and Sri Lanka stood at $ 2459.89 Mn, in favour of China.

"Trade with Sri Lanka is one of the focal points of our Embassy in Colombo. From China’s perspective, our trade deficit with Sri Lanka is too large. China politically stands firm in its support to Sri Lanka. We need immediate action to solve the trade imbalance between China and Sri Lanka. This delegation is the start in addressing the trade balance issue. The companies present here today are very powerful in Chinese markets. They are here with high expectations. Sri Lanka is an important South Asian partner for Sri Lanka. Sri Lanka will be much much more important to China in the future!" Jianghao added.

Rishad Bathiudeen, Minister of Industry and Commerce, addressing the event, said: "Total trade between the two countries has increased to US $ 2676 Mn in 2012, showing a steady growth from US $ 659 Mn in 2005. It is important to note here that these improvements are reflected in both directions in our bilateral trade. Sri Lanka’s exports to China although still at a comparatively -lower levels, have increased from a mere $ 28 Mn in 2005 to US$ 108 Mn in 2012. We are also pleased to see that Sri Lanka is among the few Countries in the Asian Region, which recorded a positive export growth with China during last few years. We export various items including coir products ,apparel, minerals, tea, and rubber tyres, to China which are immediately used by Chinese manufacturers and consumers. Exports from Sri Lanka to China under the APTA also have shown huge increases during last few years. On the other side, Sri Lanka’s imports from China recorded a dramatic surge from US$ 630 Mn in 2005 to US$ 2568 Mn in 2012. Sri Lanka imports a range of products from China including capital goods, raw materials and consumer goods. These increasing trends are a clear indication of the huge potential that exists towards expanding our exports to the larger Chinese market. This is why that the proposed Free Trade Agreement (FTA) between Sri Lanka and China, the greatest trade initiative of our committed President His Excellency Mahinda Rajapaksa so far, is an unprecedented opportunity for the export and business communities of China as well as Sri Lanka. You may already be aware that the FTA is planned for this November ahead of the Commonwealth Heads of Government Meeting."

Inviting the Chinese business to make use of Sri Lanka’s various regional FTAs, Minister Bathiudeen voiced: "I wish to convey that the bilateral free trade agreements that we have with India and Pakistan, and several other regional agreements, such as South Asian Free Trade Area (SAFTA), and Asia Pacific Trade Agreement (APTA), provide duty free and highly preferential market access, for products manufactured in Sri Lanka. This is definitely an opportunity for Chinese investors who are looking for business opportunities in these markets through their investments in Sri Lanka and I invite you to partner with Sri Lanka."

"China-Sri Lanka trade in the first half of 2012 stood at $ 1.9 Bn. Bilateral trade has been increasing steadily and we see huge potential for future trade cooperation" said Jia Guoyong, the Vice Director General of Chinese Trade Development Bureau (TDB), addressing the event. He added: "China has formulated specified trade opportunities for all countries, especially Sri Lanka. We want to strengthen our import structure and processes to expand our international trade. This event can build a platform of cooperation and promotion of our bilateral trade."

The event also consisted of in depth presentations to the visiting Chinese delegation by EDB (by Mrs Sujata Weerakoone, DG-EDB), BoI (by Ms Renuka Weerakoone, Director), and Lanka-China Business Council (by Navindra Abeysekera - President).

The presenters stressed the importance of Sri Lanka’s strategic location for Chinese manufacturers and revealed that setting up Chinese manufacturing in Sri Lanka can strengthen their value and supply chains giving much faster access to the South Asian and Middle Eastern markets.

Anura Siriwardena (Secretary, Ministry of Industry and Commerce) addressing the event, said: "I am addressing you today after a successful completion of a trade, tourism and investment promotion programme held in Beijing recently. I would like say that the overwhelming reception we had there will certainly give us more and more strength to go for extra miles in our way forward. The friendship of our two countries has been elevated to its highest level with the recent visit of HE the President Mahinda Rajapaksa to China. The Presidents of both countries had a historical discussion to expand the breadth and the depth of the relationship in areas of political, economic, defence, security and cultural spheres paving the way to a strategic cooperative dialogue between two nations. The discussions lead to the constitution of a Free Trade Agreement, to enhance mutual benefits of bilateral trade. The FTA will definitely increase the market access to China for Sri Lankan products such as apparels, tea, coir based products, rubber based products, gems and jewelry and light industry products etc., while there will be an increase of market access in Sri Lanka for Chinese products such as heavy machinery and equipment."

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