CHINA TO CONTRIBUTE USD 905.11 MN FOR SRI LANKA DEVELOPMENT
To learn from China
By Cheranka Mendis
The ties between China, one of the world’s fastest growing economies and the leading Asian exporter of textiles and garments to the US and EU, and Sri Lanka have always been strong, even prior to the bilateral agreements that started off in 1952.
But while China has boomed up the ladder, Sri Lanka is lagging behind; mainly due to the internal conflict which existed for a number of years and due to the political undercurrents of the country. Finally out of the black period, Sri Lanka is now ready to lunge forward and seize the missed opportunities, and would do well to learn from our ally, China.
“China modified its strategies from time to time, keeping in tune with the ever changing patterns and trends of the world. These policies have helped us to keep abreast, and to modulate new policies and planning methods,” Ambassador for China in Sri Lanka, Yang Xiuping, asserted at the ‘Sri Lanka-China Business Forum’ organised by the Ceylon Chamber of Commerce, the Sri Lanka - China Business Council and the Sri Lanka China Friendship Foundation, held yesterday.
“With a nominal GDP of USD 4.4 trillion when measured in exchange rate terms. China is now positioned as the third largest economy in the world, after US and Japan. We also contribute 19% to the world’s economic growth,” Ms. Xiuping said.
“During the last 30 years, China’s economy has changed from a centrally planned system to a more market-oriented economy - one that practises two economic systems - with a rapidly growing private sector. China became a major player in the global economy and is now called the factory of the world. In 2009, even amidst the global financial credit crunch, China’s growth rate is expected to be 8.2 per cent (source: ADB) and is expected to go even higher in 2010 to 8.9 per cent,” added Guest Speaker, Secretary General, Colombo Plan Secretariat, Dato’ Patricia Yoon.
“In restructuring its economy, China executed gradual price liberalisation, fiscal decentralization and increased autonomy for state enterprises. It laid the foundation of a diversified banking system, developed the stock markets, promoted rapid growth of the non-state sector and opened the economy to foreign trade and investment. These reforms led to huge efficiency gains. China’s GDP has increased tenfold since 1978,” said Ms. Yoon.
Sri Lanka too needs proper planning and well placed strategies to overcome the economical challenges in the future.
Giving an overview of the China - Sri Lanka economic relationship, Executive Director of the Institute of Policy Studies, Saman Kelegama stated that the total trade between the two countries has grown steadily and has almost doubled since2005. Trade between the two countries was recorded at USD 660 in 2005, which increased to USD 1138.3 in 2008. “Sri Lankan exports to China have grown over the last 5 years, while imports from China have grown at a faster pace than the exports. This has resulted in an expanding trade deficit of USD 1044.7,” Mr., Kelegama said. China and Hong Kong provides Sri Lanka’s largest source of imports, a recorded USD 1786.1, exceeded only by India with USD 3443.
Raw coconut coir, apparel items, flavoured and non flavoured tea, natural rubber, diamonds and other precious stones, titanium ore and concentrates and bicycles and other cycles were identified as Sri Lanka’s major exports to China. Sri Lanka’s major imports from China include electrical machinery, fertilizers, railway locomotives, inorganic herbals and many more.
China is also one of Sri Lanka’s major investors. In 2008, the total Chinese Foreign Direct Investment (FDI) to Sri Lanka was an approximate Rs. 1.9 billion. “When investment by Hong Kong is also added, the total FDI into Sri Lanka in 2008 has been recorded to be Rs.11.69 billion,” Mr. Kelegama said.
“Presently 16 Chinese businesses have invested in garment, leather, telecom and electronics manufacturing. Entrepreneurs from China have been provided with an exclusive EPZ at Mirigama, and depending on its progress, additional space will be provided at Godagama, Matara and the Eastern Province.”
The projects funded by China currently are many. USD 27.2 Mn was spent in 2008 for the procurement of 100 railway carriages for Sri Lanka. The Puttlam Coal Power Project (USD455 Mn), Supply of 15 Nos. Diesel Multiple Units (USD38.68 Mn), National Performance Art Theatre (USD10.86Mn) and Maintenance of BMICH (USD 7.20 Mn) are also being implemented as at date.
“On August 13 this year, the two countries signed two key development projects, the Colombo- Katunayake expressway and the Hambantota bunkering project. This would pave the way for infrastructure requirements which will have an immense impact on the future socio-economic development of Sri Lanka,” assessed Mr. Kelegama.
Key projects to be initiated include the Colombo-Katunayake expressway for USD 248 Mn, Phase 2 of Hambantota Port Development Project for USD 100 Mn, Hambantota Bunkering Facility and Development Project for USD 75 Mn; along with Phase 2 of Puttlam Coal Power Project worth USD 373 Mn, USD 81.14 Mn worth of Commercial aircrafts to SL, housing projects for public servants for USD 22,50Mn, repairing and refurbishing the Supreme Courts complex for USD 0.36 Mn. These are all set to take place in the near future.
This is on top of the USD 1 Mn humanitarian aid promised for civilians affected by the conflict and other related aid and educational links that have been given to Sri Lanka.
“Prospects for the future seem to be good and after many years, China has opened its borders for SL tea imports. The Sri Lankan tea company ‘Heladiv’ opened three exclusive tea boutiques in the Fujian province and Beijing in August this year and aims at opening 100 in China by 2011 with 20 by the end of this year,” he further said.
“China has also been recognized as an important potential source for tourism and steps have already been implemented to improve the air connectivity between the two countries,” he said.
Moreover, he stated, that while many see China as a threat, Sri Lanka should embrace the opportunities created by the socio-economical ties between the two nations.
DAILYMIRROR.LK
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