China-Sri Lanka should enhance economic relationship
China and Sri Lanka have had a relationship that has extended over a
thousand years into the past. 1400 years ago, the Chinese Scholar monk
Fa Xian spent two years in a Buddhist Monastery in Sri Lanka studying
Buddhist scriptures. There have also been trade and economic exchanges
from ancient times. This year China celebrated 600 years of the voyages
of the Chinese navigator Zhang He. He visited Sri Lanka at least five
times, and on most of these voyages, the economic nexus was the most
In modern times, shortly after Sri Lanka received her independence
and the People's Republic was established, within one year of each
other, the two countries signed what is known as the Rubber-Rice Pact. I
understand that this was the first trade agreement that China signed
with a non-Communist country.
That was in 1952 and symbolized both the economic as well as
political ties between the two countries.
Five years later, during my father's term as Prime Minister, the two
countries established resident Embassies in each others capitals.
Today, I am happy to therefore be here to help carry forward our
economic relationship. Just four months ago, in Colombo, H.E. Premier
Wen Jiabao and I witnessed the signing of the China-Sri Lanka Agreement
for Further Strengthening of Economic Relations. Economic relations is
not merely a matter of buying and selling.
As that Agreement implies, there are diverse areas of economic
cooperation. These include joint ventures, contractual and consultancy
services for various mega infrastructure projects including power,
transport and communications. They include tourism which is a major
growth industry for both our countries.
We have commenced discussions under the Agreement to work out
modalities to facilitate trade and economic relations including joint
ventures. I come here today with a group of very senior businessmen from
Sri Lanka who cover such products as tea, gems and jewellery, rubber
products, coir products, garments, food and vegetables, agricultural
machinery, building materials and household items. They include people
involved in services such as tourism and shipping.
Yesterday, I had friendly and fruitful discussions with H.E. Hu
Jintao, the President of the People's Republic of China. During those
discussions we have mapped out means to advance our economic cooperation
The Minister of Tourism and the Chairman of the Board of Investment
will be addressing you on the opportunities that exist to build up a
strong win-win situation in the economic field. You will have the
opportunity of seeking clarifications from them.
You will also personally be able to have close encounters of the
profitable kind with the businessmen individually. We may not have
always had time to establish prior linkages well in advance of this
visit. However, I am sure that in the days to come, you will be able to
link up personally with potential partners for our mutual benefit.
On my part what I can assure you is that Sri Lanka welcomes you as a
partner. Many of you have already visited Sri Lanka and know the esteem
and friendship with which Sri Lankans look at China. Our Production
Zones or Free Trade Zones which include many foreign partners were the
earliest to be set up in South Asia.
In fact, your former President Jiang Zemin visited Sri Lanka around
the 1970s to study what was then called the Greater Colombo Economic
Zone, one of the first to be set up in South Asia. China can utilise our
Concessions can be negotiated on an individual basis to suit your
Since Sri Lanka liberalised its economy in the seventies, it has
followed a consistent, liberal, free market economic philosophy. We are
a democratic country in which successive Governments maintain the
strongest of relations with China - its Government and enterprises of
different forms of ownership.
Sri Lanka's trade and tariff policy is moving towards and
increasingly lower tariff regime. Sri Lanka is a signatory to the South
Asian Preferential Trading Arrangement (SAPTA), the Bangkok Agreement,
the Generalised System of Preferences (GSP), and the Global System of
Trade Preference (GSTP).
Sri Lanka has also entered into Free Trade Agreements with India and
Pakistan, which are two of the largest markets in the South Asian
region. Indo-Lanka FTA bilateral trade has grown over 250 per cent to
approximately US$ 1.3 billion by early 2004.
Negotiations are already under way to expand the Indo-Lanka Free
Trade Agreement into a Comprehensive Economic Partnership Agreement (CEPA).
Sri Lanka's admission to GSP+ from July 1st, 2005 provides eligibility
for zero tariff entry, inter-alia, for over 90 per cent of Sri Lanka's
exports to the EU market. A Trade and Investment Framework (TIFA) has
also been entered into with the USA. We can discuss links with third
Sri Lanka's strategic location in the Indian Ocean, lying midway on
the sea route between East and West, linking China and Southeast Asia
with the Near East and the Mediterranean world could easily serve as a
gateway to the lucrative South Asian market and beyond towards Africa
and the Middle East, as it had done during era of the Silk Route.
The Southern Port of Hambantota is being developed in association
with Chinese enterprise. China's own economic performance has been
dazzling. Its welfare and development are part of global welfare and
We would very much like to enhance and deepen our economic
I would like to end with the words of the late Foreign Minister
Lakshman Kadirgamar who during a visit undertaken last year to China
said: ".....Sri Lanka wishes China to succeed, and trusts China to
exercise responsibly and constructively the enormous power and influence
that will necessarily accompany great economic success."