China woos Sri Lanka with FTA and business deals
China
and Sri Lanka are exploring a free trade agreement (FTA) as Beijing continues to strengthen economic and military ties with India's neighbours.
A high-level Chinese delegation led by its commerce minister Wang Wentao will attend the Sri Lanka-China Trade and Investment Forum in Colombo on May 30, according to persons familiar with the development.
The 115-member business delegation representing 77 Chinese companies will engage with potential Sri Lankan business and investment partners at the forum hosted by The Ceylon Chamber of Commerce and Sri Lankan commerce department.
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The forum will offer 'a platform to strengthen bilateral commercial ties, facilitate business matchmaking, and identify new trade and investment avenues, in a diverse range of sectors,' the chamber said.
Apart from discussing the China-Sri Lanka FTA, the countries are expected to sign two memoranda of understanding (MoUs) – for establishing a working group on promoting trade, and strengthening economic cooperation in industrial and supply chains, according to Colombo-based sources.
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The development comes at a time when the international community is monitoring the
China-Pakistan military axis
after Beijing provided military and economic support to Islamabad during the recent India-Pakistan conflict.
Chinese delegates visiting Sri Lanka will represent four major chambers representing various industries including textiles, machinery, electronic products, food stuff, native produce and animal by-product, sources cited above said.
Wang would co-chair the eighth session of the China-Sri Lanka Joint Committee on Economic and Trade Cooperation with his counterpart Wasantha Samarasinghe, it has been learnt.
Following up on the discussions held during the seventh session in 2021, both sides would review MoUs on (i) formulation of rules and regulations on Hambantota Free Port Act, (ii) strengthening investment cooperation in the digital economy, and (iii) promoting investment cooperation in green development.
The Sri Lankan foreign ministry has expressed apprehensions on the MoU on the digital economy because it encourages exchanges and cooperation at the local level that needs careful consideration due to constitutional limitations, sources said on the condition of anonymity. Moreover, the MoU warrants broader stakeholder consultations in view of the sensitivity of the subject.
The Chinese delegation will also participate in the inaugural meeting of the China-Sri Lanka Working Group on Investment and Economic Cooperation, set up in accordance with an MoU signed during President Anura Kumara Dissanayake's visit to China in January.
The highlight of the visit was Sinopec agreeing to invest $3.7 billion to construct a 'state-of-the-art oil refinery' with a capacity of 200,000 barrels in the southern Hambantota region.
It is relevant to mention that in Dec 2017, China secured the strategic Hambantota port in the Indian Ocean on a 99-year lease as a debt swap. China has also secured a long-term lease to build an economic zone at Hambantota. Incidentally, Dissanayake was a critic of the Hambantota port deal for its long-term lease while he was in the opposition.
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