A senior government spokesperson yesterday said although Sri Lanka has taken steps to expedite the free trade agreement (FTA) with China, there has been no positive response from China for the proposed debt restructuring programme.
“China is still trying to provide refinancing facilities equal to another billion dollars for the maturing China Development Bank loan. But Sri Lanka has refused to receive the refinancing facility because all debtors are treated equally under the debt restructuring programme,” said the spokesman.
Apart from this, China has so far not responded well to Sri Lanka’s request to remove the conditions of the 1.5 billion dollar swap facility that China has provided to Sri Lanka.
One of the conditions was that in order to implement the swap facility, Sri Lanka should maintain foreign reserves for at least three months of imports.
But, So far, Sri Lanka’s foreign reserves have fallen to negligible levels.
Meanwhile, Sri Lanka has requested that the two sides resume Free Trade Agreement (FTA) negotiations which have been dormant for some time.
Chinese Premier Wang Yi during his visit to Sri Lanka in January encouraged the resumption of negotiations.
It is believed that the Chinese Foreign Ministry has been exerting pressure along the same lines.
“The sticking point is that China had been insisting that Sri Lanka relax its duties on a wider range of Chinese goods immediately. Given the comparative size of the two economies, this is unrealistic” the Government spokesman said.
China is the second largest economy in the world while Sri Lanka is just a minnow. Furthermore, a rapid opening up would be resisted by Sri Lanka’s struggling industry.
Sri Lanka which is desperate for foreign exchange needs access to the lucrative Chinese market on easy terms now.
Perhaps it may be mutually beneficial and politically advantageous to conclude a limited agreement which gives asymmetrical treatment to Sri Lankan goods and leave the conclusion of a comprehensive agreement to a later date.
When asked, the Sri Lankan Embassy in Beijing said that those countries with FTAs with China are doing extremely well in the Chinese market. China is awash with cherries from Chile, mangosteens from Thailand, durians from Thailand, prawns from Equador, milk from New Zealand, etc. Sri Lanka is seriously lagging behind.
Ambassador Dr. Palitha Kohona encourages Chinese tourists to visit Sri Lanka
Addressing the Asian Marine Tourism Conference 2022 in Ningbo, China, Ambassador Palitha Kohona made a ringing call for Chinese tourists to visit Sri Lanka and enjoy its unmatched range of attractions. It is expected that China will ease its Covid-related travel restrictions in the coming months.
In addition to Sri Lanka’s beautiful, palm fringed golden beaches, one could engage in diving around beautiful coral reefs and ship wrecks, kite surfing in a 40 km long lagoon, surfing at Arugam Bay, whale watching during the morning and mingling with majestic elephants in the afternoon, and also enjoy the island’s bounty of sea food and the legendary Sri Lankan hospitality.
Dr. Kohona also discussed the potential for Chinese cruise ships to visit Sri Lanka with the vice president of the Chinese Cruise and Yacht Federation. Three million Chinese undertake cruise holidays annually.
By Ishara Gamage