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China’s massive OBOR hub for Asia bullish on Sri Lanka FTA

The South East Asian gateway province to mainland China’s ambitious One Belt-One Road (OBOR) initiative voiced its impatience to witness the historic Sri Lanka-China FTA’s take-off so that greater bilateral trade would soon become a reality.

“Currently total bilateral trade between Yunnan and Sri Lanka is only $ 18 million. The Sri Lanka-China Free Trade Agreement is a major step between both countries, and this FTA will open new trade potential for Sri Lanka with Yunnan as well as China,” said Gao Shuxun, a member of the Communist Party Committee of the Yunnan Provincial People’s Government and Advisor to the Yunnan Government, on 23 April in Colombo. Shuxun, who was once a Vice-Governor of Yunnan Province, was addressing Sri Lankan Industry and Commerce Minister Rishad Bathiudeen along with members of his official delegation to Colombo.

Shuxun is promoting this year’s 5th China South Asia Expo (CSAE) and 25th China Kunming Import Export Fair (CKIEF) to be held from 14-20 June in Kunming.

Also present at the meeting was Li Xinyu, the Third Secretary (Economic and Commercial) of the Chinese Embassy in Sri Lanka. At this meeting, Shuxun also extended official CSAE and CKIEF invites to Sri Lanka by handing them over to Minister Bathiudeen.

Yunnan is also the closest Chinese province to Sri Lanka and to the rest of South Asia.

“The Yunnan Government is also keen to partner Sri Lanka in the agro, bio-pharma and tourism sectors as well as cooperate in plant breeding and development,” said Advisor Shuxun.

The southern Yunnan Province, with a GDP of $ 235 billion, was China’s 23rd provincial economy in 2016. Yunnan is considered to be a fast growing economy and logistical hub, with Kunming’s connectivity. It is the closest Chinese province to Sri Lanka, reachable through just a four-hour direct flight.

Yunnan is also considered to be pivotal in China’s ambitious OBOR initiative and is said to be ‘the OBOR Gateway to South East Asia’ (as a result, activities of 2017’s CSAE and CKIEF had a major focus on OBOR). The OBOR land links from the mainland that terminate in Singapore are directed through the Kunming logistical hub.

Minister Bathiudeen praised Yunnan Government Advisor Shuxun’s interest in the Sri Lanka-China FTA.

“Both countries will benefit from this FTA. Under the leadership of President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe, we are now working to finalise the FTA. We believe there will be significant economic benefits to Sri Lanka from the FTA since China is a global trade power. Lanka-China total trade too has been on the rise, which is a positive trend. I and my officials will extend our fullest support to Yunnan investors to partner in the proposed sectors here,” said Minister Bathiudeen.

According to the Department of Commerce, Sri Lanka’s total trade with China in 2016 was $ 4.47 billion and in 2017 it increased by 3% to $ 4.60 billion.

Almost 95% of this annual bilateral trade consists of imports from China to Sri Lanka, something that Sri Lanka is keen to adjust through the new FTA.

(FT)

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