EDB discusses ways to enhance trade with China

Export Development Board (EDB) Chairman Prabhash Subhasinghe recently met with Yang Zuoyuan, Economic and Commercial Counsellor of China Embassy in Colombo to discuss opportunities available to enhance trade between the two countries.

The discussions were mainly focused on the importance of further strengthening of trade between the two countries in view of fully utilising the trade potential that lies vastly untapped.

The discussion highlighted the early recoveries achieved by both the countries after the COVID 19 pandemic. According to the IMF, China’s economic growth after the pandemic was predicted, to be 8.2% which will give vast opportunities for its trading partners.

Benefits that could be accrued through preferential market access was discussed during the meeting where such tools could be used to narrow down the current trade gap between the two countries. In this regard, the activation of negotiation process of proposed China Sri Lanka FTA was highlighted as this will act as a catalyst to increase the trade between Sri Lanka and China by exploiting the opportunities available in the market.

Discussions were also had on China International Import Expo (CIIE) where the EDB organized Sri Lanka’s participation from its inception in 2018. Arrangements are being made by the EDB to organize Sri Lanka’s participation at CIIE 2020 as well. This event was an important move of China to open its market and promote trade, and was a platform for international cooperation for all countries to showcase their development achievements and discuss global economic and trade issues

Importance of Chinese investment into Sri Lanka was also discussed taking advantage of regulatory framework of both countries. This will also lead to increasing regional exports utilizing the existing FTA concessions and accelerate the commercial ties.

China is a very important trading partner for Sri Lanka. Total merchandise trade between the two countries stood at USD 4,261 Mn in 2019. Being the top import destination of Sri Lanka, total imports from China to Sri Lanka recorded as USD 4,032 Mn. in 2019 with the share of 21% of total imports.

China was the 11th export destination with the export value of US$ 229 Mn in 2019 for Sri Lanka with main export products of tea, activated carbon, electronic & electrical products, coir fibre, apparel, mineral sands, petroleum products, Pneumatic & Retreated Rubber Tyres & Tubes.

Sri Lankan exporters and producers mainly from sectors of apparel, spices, fresh fruits, and other food & Agriculture products expecting to explore this lucrative market where nearly 400 million people in China are considered as middle-class income earners which is expected to grow 70% by year 2030.