Trade agreements between Sri Lanka and China have been in place for many years now, with both countries benefiting from the mutually beneficial relationship. Sri Lanka is an island nation located in the Indian Ocean, while China is a landlocked country in East Asia. The two countries have a strong trade partnership that continues to grow with time.
The two countries have signed a number of trade agreements aimed at promoting commercial activities, boosting economic growth, and supporting each other’s development goals. These agreements cover a wide range of sectors, including agriculture, textiles, tourism, and infrastructure. For instance, in 2013, the Sri Lankan government signed a Memorandum of Understanding with China to establish a joint economic and technical cooperation committee. The committee aims to promote trade and investment between the two countries.
One of the significant trade agreements between Sri Lanka and China is the China-Sri Lanka Free Trade Agreement (CSLFTA). The agreement came into effect in 2018 and allows for duty-free access to over 90% of goods traded between the two countries. This has led to an increase in trade volumes between the two countries, benefiting both economies.
Under the CSLFTA, Sri Lanka is allowed to export various products to China, including tea, rubber, coconut, and apparel. China, on the other hand, is allowed to export a wide range of goods to Sri Lanka, including machinery, electronics, vehicles, and steel products. The agreement also covers services such as healthcare, education, and tourism, among others.
The CSLFTA has brought many benefits to both countries. For instance, Sri Lanka’s tea exports to China increased significantly in the year following the agreement’s implementation. Chinese tourists visiting Sri Lanka also increased by over 20%, contributing to the growth of Sri Lanka’s tourism sector. On the other hand, China has benefited from increased exports of machinery and other goods to Sri Lanka.
Another significant trade agreement between the two countries is the Hambantota Port agreement. This agreement involves China Merchants Port Holdings Company (CMPort) taking over the operation of the Hambantota Port in Sri Lanka on a 99-year lease. The agreement has faced criticism from some Sri Lankan politicians and activists who argue that it gives too much control to China, but proponents of the deal argue that it will bring much-needed investment and infrastructure development to Sri Lanka.
In conclusion, trade agreements between Sri Lanka and China have brought many benefits to both countries. The CSLFTA has increased trade volumes and allowed for duty-free access to goods, leading to economic growth and development. The Hambantota Port agreement, while controversial, has the potential to bring much-needed investment and infrastructure to Sri Lanka. As the two countries continue to cooperate on trade and investment, both are set to benefit, and the relationship is likely to grow stronger with time.