No less than six exhaustive sessions of official talks have been wrapped to-date in Sri Lanka’s pursuit of the coveted Free Trade Agreement (FTA) with the world’s second largest economy.
“Our talks with China are progressing smoothly” said an upbeat Minister of Industry and Commerce of Sri Lanka Rishad Bathiudeen on 14 July in Colombo.
Minister Bathiudeen was addressing the launch event of the first ever product exhibition in Sri Lanka by China’s Guangxi Zuang Autonomous Region at Colombo’s SLECC. The event was joined by Deputy DG of Department of Commerce of Guangxi, Xiong Jiajun and a 40-man strong trade and exhibition delegation of which 35 were event exhibitors from Guangxi. Also attending the event was Charge d’affairs of Chinese Embassy in Sri Lanka Ms Pang Xunshie.
“In recent years, China-Sri Lanka two way trade has grown faster than our trade with many other countries. Last year China became the largest import origin for us. 42% of our total imports from the world in 2016 came from China at a value of $ 4.2 billion. The result was that china is now the largest global supplier to Sri Lanka” said Minister Bathiudeen.
According to the Sri Lanka Department of Commerce (SLDoC) under Minister Bathiudeen, Sri Lanka’s top exports to China last year were Ceylon Tea, coconut, footwear parts, apparel, and rubber tyres. Sri Lanka’s largest export to China five years ago was ‘various types of fibres’ immediately followed by Ceylon Tea, but by last year, Ceylon Tea has crowned the exports list to be followed by ‘fibres’. Though Lankan exports declined somewhat in 2016 to $199 Mn from 2015 high of $293 Mn, in general, exports to China have been on an upward trend-surging more than 5 fold (568%) since 2007’s mere $35 Mn. Top imports from China last year were mobile phones, boats & vessels, handmade fabrics, and petroleum. Mobile phones remained as the largest import item from China to Sri Lanka during the last five year period.
Minister Bathiudeen added: “Also recently IMF and World Bank ranked China as the world’s largest economy based on Purchasing Power Parity. These factors show us that an FTA with such an economy would be beneficial for Sri Lanka. In fact I am pleased to say that our FTA talks with China are progressing smoothly. The sixth round of talks were successfully concluded this March in Beijing. We are working for the seventh FTA round next.”
The exhaustive negotiations by Lankan side, steadily shouldered by SLDoC, always move ahead after continued domestic stakeholder consultations and feedbacks are received.
According to the SLDoC, in 2016 Sri Lanka’s total bilateral trade with China was $ 4.4 billion, a huge 363% increase in comparison to a decade back in 2007 (at $965 Mn), and even an 11% annual YoY increase in 2016 -from 2015’s $ 4 Bn.