Sept 15, Colombo: Sri Lanka and China in recent years have developed increasingly closer economic and trade relations and a proposed free trade agreement (FTA) between the two countries will boost Sri Lanka's future development, according to the government of Sri Lanka.
Both Sri Lanka and China anticipate that Chinese President Xi Jinping's visit to the island tomorrow, a first by a Chinese head of state in 28 years, will expand cooperation and cement the ties in trade and economy between the two countries.
During President Rajapaksa's state visit to China in May 2013 both leaders agreed to elevate the bilateral relations to a 'Strategic Cooperation Partnership', by substantially expanding the mandate for engagement.
The two countries signed a Memorandum of Understanding and agreed to establish a Joint Working Group on Trade to study the feasibility of a China -Sri Lanka free trade agreement (FTA) and measures to enhance Sri Lankan exports to China.
During Chinese President Xi Jinping's visit to Colombo the two sides will launch negotiations on the FTA.
A joint feasibility study on the proposed FTA completed in March 2014 concluded that the building of an FTA will bring benefits to both countries.
Although Sri Lanka's exports to China have increased from US$ 28.39 million in 2005 to US$ 121.63 million in 2013, the exports have not increased up to its potential with the bilateral trade reaching US$ 3.62 billion in 2013.
Sri Lanka hopes the FTA will help the country to gain easier access to the Chinese market and gradually reduce its trade deficit towards the world's second largest economy.
Some of Sri Lanka's main export items to China include coir fiber, garments, tea, rubber and precious stones, among others.
China has become Sri Lanka's second largest trade partner and the second largest sources of imports to the island with imports from China on a range of items have increased in recent years. Some of the main import items include cotton, textiles, iron and steel, vehicles and parts, and plastic products, among others.
In addition to the enhanced trade cooperation, China has become the largest investor in Sri Lanka.
Loans and investments from China have played a significant role in Sri Lanka's post-war reconstruction. Major projects that have received Chinese assistance include the second international airport in Mattala, Hambantota international port, Norochcholai coal power plant, Colombo-Katunayake Expressway, Southern Expressway extension to Matara and the Moragahakanda multi-purpose irrigation project among others.
China has also become a major source of tourist arrivals to the island.
The government says in working toward Sri Lanka's goal to attract 2.5 million tourists by 2016, China will play an important role, particularly being the largest outbound tourism market in the world.
Sri Lanka has identified China as a priority market in its tourism promotion strategy and hopes to attract 100,000 Chinese tourists to the island in 2015 and 275,000 by 2016.
This year, Sri Lanka has already recorded more than one million tourists overall, and the number of Chinese tourists has increased drastically in recent years, from 9,668 tourists in 2005 to 81,682 this year.
The trend of incoming Chinese tourists continues to be positive, the government says. Arrival of Chinese tourists to Sri Lanka There increased 141.5 percent in the first eight months of this year compared to the same period last year.
Sri Lanka also hopes to continue attracting more Chinese tourists to Sri Lanka during upcoming years in reaching its goal of attracting 2.5 million tourists by 2016.