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President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa with the high-level Chinese delegation[/caption]
Sri Lanka and China have agreed that the export basket of Sri Lanka offered to China needs to be reviewed in order to boost exports to China and improve the trade balance, which has long been in favour of China.
This was agreed in principle when President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa met a high-level Chinese delegation on 9 October in Colombo, in the presence of Foreign Minister Dinesh Gunawardena, Ministry Secretary Admiral Prof. Jayanath Colombage, and other government ministers and dignitaries.
The Chinese delegation consisted of a key Communist Party political bureau member and diplomat Yang Jiechi, along with China International Development Co-operation Agency Chairman Wang Xiaotao and Chinese Foreign Ministry official Cheng Song.
The Sri Lankan Government requested the Chinese delegates to facilitate market access to some of Sri Lanka’s unique commodities that could find demand in the Chinese domestic market towards increasing the trade turnover.
In 2017, China was the sixth largest export destination for Sri Lanka. The total export value from Sri Lanka to China was just $ 414.7 million in 2017 and total imports from China to Sri Lanka for the same period was a much higher $ 4,189.8 million. However, Sri Lanka’s exports had increased by that time from $ 121.4 million in 2013.
Both parties also agreed on the need to resume negotiations on the stalled talks on the Sri Lanka-China Free Trade Agreement (FTA).
China is the world’s second largest economy and an FTA with it has been coveted by Sri Lanka for many years. Negotiations on this FTA finally commenced in 2016, but had come to a virtual standstill by 2018. This was due to Sri Lanka’s insistence on reviewing the agreement every 10 years, to which China was strongly opposed due to its willingness to have longer-term stability, according to Sri Lanka’s then Chief Trade Negotiator K.J. Weerasinghe, as reported by Reuters in May 2018.
The massive difference in bargaining power between the two nations also meant that China insisted on a zero-tariff regime which would have overwhelmingly benefited them due to the bilateral trade relationship being dominated by China’s exports to Sri Lanka.
Sri Lanka’s pushback on these proposals is also believed to have contributed to the breakdown of talks in 2017.
President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa with the high-level Chinese delegation[/caption]
Sri Lanka and China have agreed that the export basket of Sri Lanka offered to China needs to be reviewed in order to boost exports to China and improve the trade balance, which has long been in favour of China.
This was agreed in principle when President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa met a high-level Chinese delegation on 9 October in Colombo, in the presence of Foreign Minister Dinesh Gunawardena, Ministry Secretary Admiral Prof. Jayanath Colombage, and other government ministers and dignitaries.
The Chinese delegation consisted of a key Communist Party political bureau member and diplomat Yang Jiechi, along with China International Development Co-operation Agency Chairman Wang Xiaotao and Chinese Foreign Ministry official Cheng Song.
The Sri Lankan Government requested the Chinese delegates to facilitate market access to some of Sri Lanka’s unique commodities that could find demand in the Chinese domestic market towards increasing the trade turnover.
In 2017, China was the sixth largest export destination for Sri Lanka. The total export value from Sri Lanka to China was just $ 414.7 million in 2017 and total imports from China to Sri Lanka for the same period was a much higher $ 4,189.8 million. However, Sri Lanka’s exports had increased by that time from $ 121.4 million in 2013.
Both parties also agreed on the need to resume negotiations on the stalled talks on the Sri Lanka-China Free Trade Agreement (FTA).
China is the world’s second largest economy and an FTA with it has been coveted by Sri Lanka for many years. Negotiations on this FTA finally commenced in 2016, but had come to a virtual standstill by 2018. This was due to Sri Lanka’s insistence on reviewing the agreement every 10 years, to which China was strongly opposed due to its willingness to have longer-term stability, according to Sri Lanka’s then Chief Trade Negotiator K.J. Weerasinghe, as reported by Reuters in May 2018.
The massive difference in bargaining power between the two nations also meant that China insisted on a zero-tariff regime which would have overwhelmingly benefited them due to the bilateral trade relationship being dominated by China’s exports to Sri Lanka.
Sri Lanka’s pushback on these proposals is also believed to have contributed to the breakdown of talks in 2017.