Imports from China to Sri Lanka are expected to grow with the growth of construction and lifting of import ban on vehicles, as Chinese imports take 23% of overall imports in 1H24, Independent think tank Arutha said.

According to a report by Arutha, Chinese imports to Sri Lanka are likely to continue to grow parallel to Sri Lanka’s economic recovery as China continued to be the largest source of Sri Lanka’s imports in 2024, surpassing India.

It said that the growth of Chinese imports is due to the growth in Sri Lanka’s apparel exports which is linked to yarn and fabric imports from China, while the growth of household and electronic consumption is also linked to imports from China.

Furthermore, Arutha said that if the construction industry growth picks up, that will also increase imports from China as many construction materials and machinery are sourced from China.

It stressed that the restart of Chinese-funded infrastructure projects, like the Central Expressway, following the bilateral debt restructuring would boost the import of construction material from China.

“The expressway’s construction has been halted for two years. The Sinopec Hambantota refinery project, which is still in discussion, is also likely to boost Chinese imports next year,” Arutha said.

Moreover, it said two prominent Sri Lankan firms John Keells and David Pieris Automobiles have announced partnerships with major Chinese electric vehicle (EV) manufacturers to import and sell EVs in Sri Lanka.

Arutha states that with the restriction on personal vehicle imports to be lifted in 2025, Chinese EVs are poised to take up a share of the local vehicle market as globally Chinese EVs are more popular and affordable than others.