China Courts Sri Lanka with FTA and Business Agreements

China and Sri Lanka are exploring a free trade agreement (FTA) as China strengthens ties with India’s neighbors. A Chinese delegation led by Commerce Minister Wang Wentao will attend a forum in Colombo.

Key Points

• China and Sri Lanka are discussing a free trade agreement (FTA) to enhance economic collaboration. A Chinese delegation, led by Commerce Minister Wang Wentao, will attend the Sri Lanka-China Trade and Investment Forum in Colombo on May 30, engaging with local businesses. The forum aims to strengthen commercial ties and explore new trade and investment opportunities.

• The two countries plan to sign MoUs for promoting trade and strengthening industrial and supply chain cooperation. Concerns have been raised about the digital economy MoU due to constitutional issues and the need for stakeholder consultation. The Chinese delegation will also attend the China-Sri Lanka Working Group on Investment and Economic Cooperation.

• Sinopec’s $3.7 billion investment in a new oil refinery in Hambantota highlights the visit. The Hambantota port, leased by China in 2017, remains significant in regional geopolitics. President Anura Kumara Dissanayake, who previously criticized the port deal, underscores the strategic importance of these developments.

China and Sri Lanka are considering a free trade agreement (FTA) amidst China’s efforts to bolster economic and military connections with India’s neighboring countries. A Chinese delegation, led by Commerce Minister Wang Wentao, will attend the Sri Lanka-China Trade and Investment Forum in Colombo on May 30. This delegation, comprising 115 members from 77 Chinese companies, will collaborate with Sri Lankan businesses and potential investment partners. Hosted by The Ceylon Chamber of Commerce and the Sri Lankan commerce department, the forum aims to enhance bilateral commercial ties, facilitate business matchmaking, and explore new trade and investment opportunities across diverse sectors.

During the forum, China and Sri Lanka are expected to discuss the FTA and sign two memoranda of understanding (MoUs) focused on promoting trade and strengthening economic cooperation in industrial and supply chains. This development occurs as the global community closely observes the China-Pakistan military collaboration, with Beijing having provided significant military and economic support to Islamabad amid tensions with India.

The Chinese delegation represents major industry sectors such as textiles, machinery, electronics, and food. Wang Wentao will also co-chair the eighth session of the China-Sri Lanka Joint Committee on Economic and Trade Cooperation with his Sri Lankan counterpart, Wasantha Samarasinghe. They plan to review previous MoUs, including those related to Hambantota Free Port Act regulations, digital economy investment cooperation, and green development.

The Sri Lankan foreign ministry has expressed concerns over the digital economy MoU due to constitutional constraints and the need for broader consultations due to the subject’s sensitivity. Additionally, the delegation will attend the first meeting of the China-Sri Lanka Working Group on Investment and Economic Cooperation, a result of an MoU from President Anura Kumara Dissanayake’s January visit to China.

Notably, Sinopec has agreed to invest $3.7 billion in building an oil refinery in the Hambantota region, which China had secured in 2017 on a 99-year lease. This strategic port’s long-term lease has been contentious, especially for Dissanayake, who previously criticized the deal while in opposition.

Source link : China woos Sri Lanka with FTA and business deals