Positive bilateral talks between Yunnan Province in China and Sri Lanka

Bilateral talks were held between the Leaders of the People’s Government of Yunnan Province led by Gao Shuxun, Member of the CPC Leading Group of the People’s Government of Yunnan Province and the Sri Lanka delegation led by State Minister of Development Strategies and International Trade Sujeewa Senasinghe 

The talks were as a follow up to the visit of the high level delegation to Sri Lanka in March to establish a bilateral cooperation mechanism and to promote investment, trade and tourism co-operation between the Yunnan Province and Sri Lanka.

The Chinese delegation also included Cui Zhitao, Adviser, People’s Government of Yunnan Province International Expositions Affairs, Bureau of Yunnan Province and other senior officials and the Sri Lanka delegation – the Ambassador for Sri Lanka in China Karunasena Kodituwakku, Sri Lanka Export Development Board Chairperson Indira Malwatte and Ruwanthi Ariyaratne, Counsellor (Commercial), Embassy of Sri Lanka in Beijing, China and other senior officials.

Both delegations were very keen on further strengthening the longstanding relationship between China and Sri Lanka that goes back to ancient times. Reference was made to the first major economic agreement between the two countries signed in 1952, the Sri Lanka-China Rubber Rice Pact Agreement. 

Shuxun warmly welcomed the Sri Lanka delegation and stated that China imports from Sri Lanka goods worth $ 296 million and China exports to Sri Lanka goods worth of $ 3,725 million with the balance of trade heavily towards China. It was stated that especially the Yunnan Province which is the closest province to Sri Lanka will extend its cooperation in expanding exports in the field of apparel, tea, rubber, coir, gems and jewellery and fisheries.

Inviting a large number of exhibitors from Sri Lanka to the 4th China – South Asia Exposition and the 24th Kunming Imports and Exports Commodity Fair is one way of reducing the trade gap by giving an opportunity to both sides to develop trade links.

Senasinghe stated that Sri Lanka is now ready to provide an efficient service in establishing industries in Sri Lanka particularly in the field of electronics, light engineering, automobile industry, food processing, accessories and trimmings for the developed apparel industry in Sri Lanka. He also stated that Sri Lanka is now open to being a part of the value chain and providing specialised services making use of our pool of talented educated youth with technical capabilities. 

With reference to exports, Senasinghe agreed with Shuxun that there was a great potential for developing gems and jewellery provided the import procedures are liberalised and duties lowered. He requested the apparel industry of Sri Lanka to be given a level playing field similar to ASEAN countries, making use of the Asia Pacific Trade Agreement which Sri Lanka is a party to, where the apparel exports to China can increase to $ 500 m in 2020.

Senasinghe invited entrepreneurs from the Yunnan Province to set up industries in Sri Lanka – which is a geographical crossroad of the world – to cater to the preferential markets that will be opening up soon. He stated that one-third of the labour force in Sri Lanka is engaged in the agricultural sector which contributes less than 10% to the economy and therefore there was a necessity for a structural shift in the economy to be actively promoting industrialisation.

He stated that with the cost of labour going up in China, it would be prudent to make use of the competitive wage rates in Sri Lanka to either relocate some of the Chinese industries or commence industries in the industrial zones in Sri Lanka taking advantage of the investment incentives extended by the Government of Sri Lanka.

Shuxun stated that tourism will be one of the best investment industries in Sri Lanka from a point of view of comparative advantage. Tourism can progress on a positive note especially with Yunnan Province as it is the closest province with air links to Sri Lanka. The total number of Chinese tourists visiting Sri Lanka was approximately 230,000 in 2015. By developing tourism between the countries from the Yunnan Province alone it could increase by 472,000 tourists if 1% of the tourists from Yunnan Province could be attracted to visit Sri Lanka. Both parties agreed that there should be a concerted effort and promotions undertaken for developing tourism between the two countries.

Senasinghe stated that it was important that both countries work very closely on the issuing of visas expeditiously. Both parties agreed that issuing of visas especially for business was also considered a restriction in developing closer business relations between the countries. Shuxun stated that investment in the mineral sector will be important as Sri Lanka is still at a very basic industry level and using Chinese technology, Sri Lanka can achieve a higher level where Chinese investors will be eager to extend technical cooperation. Senasinghe stated there is an excellent prospect for promotion of black tea as specially teas from different regions in Sri Lanka appears to be very popular in China and in recent years there is an upward trend among the Chinese connoisseurs of tea indulging in drinking imported black tea. It was proposed for the Government of Yunnan and Sri Lanka to work on a proposal of opening specialised tea saloons initially in Yunnan Province and thereafter to other provinces in China. The Chinese delegation reiterated the demand for seafood in China. 

With the current lifting of EU ban on seafood exports to the EU Sri Lankan seafood exporters would initially reconsolidate their position in the EU market and then look very positively at the Chinese market. From the Chinese side it was stated that assistance could be provided with reference to logistics related to the fisheries sector. 

The Government of Yunnan Province will continue to support Sri Lankan businessmen inviting regular trade delegations to China as well as support trade delegations from Yunnan to Sri Lanka.