China calls for policy consistency

Chinese Ambassador Yi Xianliang backed Sri Lanka’s involvement in the Belt and Road Initiative (BRI) yesterday but called on the Government to have stable and consistent policies to encourage investment and warned that if swift steps were not taken investor appetite may fade.   

Speaking at the ‘Growing with Giants’ forum, he encouraged Sri Lanka to change its vision as a “small country” and noted it has achieved significant growth as a middle income country.  

“You are not a tiny island country. This is number one. Number two is you can produce more infrastructure. You would save so much foreign currency by producing what you would have to buy. This is why the Chinese President suggested that you set up your own industrial system. This is also my duty as Ambassador to Sri Lanka. So last year I spent a lot of time to set up an industrial zone in Hambantota. Things are progressing but there are still some problems,” he said. 

The Ambassador sent a clear message to the Sri Lankan Government, even giving specific examples of Chinese investment failing to materialise on the ground despite years of effort. He also focused on the fragmented Government institutions that made approvals a cumbersome process and called for clearer policy.    

“Be consistent with policy. That is most important for a country. You can change or make a small adjustment but not a fundamental change. Last year I talked with banks and companies and they were interested with FDI but this year less and less. The land is Sri Lankan land, the site depends on investment. It could be a small investment. It could be an apartment or hospital. What you would like to do? If Sri Lanka does not have a basic infrastructure system, if it spends money on what it can produce, how can it develop?

“I have talked with the Prime Minister many times on how to address this issue. We need help from the Government to address this issue. Chinese companies have set up investment zones around the world. I try my best as Ambassador but I am just the Ambassador. It is up to the Government. We need policies that are FDI friendly; have a long-time strategy and a board map of implementation. Right now we have so many issues to talk about. We say it is a good plan but who is the implementation team. What is the connection between talk and implementation? We need to know what the most efficient and best way is to carry out our tasks, not just for China but for other countries as well. They also have the same concern. “

Ambassador Xi also called on the Sri Lankan people to “open their heart and minds to welcome FDI”, hinting that the public had mixed sentiments about foreign investment and their impact on the ground. 

Making a presentation titled ‘The China-Sri Lanka economic relationship’ the Ambassador gave a rundown of China’s economic power in trade and innovation. He pointed out that China is working hard to reduce its carbon footprint and promote sustainable energy. 

“How can a country maintain economic growth while becoming more sustainable? I believe it is possible. In 2015 Sri Lanka grew by 5.5% and last year it was less. So what is the problem? Innovation is most important for the world economy. On Tuesday the Chinese Government published its innovation paper for 2016. Over the last five years China was number one in the innovation field. Also R&D is not only the Government’s task but also the job of the business community, universities and others. In the past five to 10 years the sum of new technology has created a new economy. This new economy already covers more than 1% of Chinese GDP. I just came back from Beijing and no one goes to the road anymore to sell food. They use WeChat. So this is not just for Alibaba but for everyone. So innovation is a major contribution to the Chinese economy.”

The Ambassador, in an extensive speech which spanned nearly an hour, also spoke of the grant programs initiated by the Chinese Government and the assistance given during the recent floods.   

“We have more than 60 million people who are below the poverty line, according to the UN. But we still try to help your Government without any conditions. First, from the end of the conflict the Government and the companies at the request of the Sri Lankan Government have worked to construct your basic infrastructure. Right now the coal power plant contributes more than half of Sri Lanka’s energy. Ports, airports and roads are also there. Why did China do so much in this island? Because China has more than 1,600 years of relations with this island.” 

He also dismissed concerns that Sri Lanka could become diplomatically entangled in Chinese foreign policy, insisting that China maintained cordial relations with all countries including India and as such local governments would not need to be concerned about regional conflicts of interest. 

“Perhaps people have doubts about China’s involvement. In the past we did not, we do not today and absolutely we will not in the future, because it is not necessary. We consider every country, including India, as our good friend. We can cooperate with any country for Sri Lanka to get development. I do believe all politicians, diplomats and others should work for peace and cooperation. Sri Lanka is the land of Sri Lankan people. Any Chinese companies or even Chinese warships are for cooperation and friendship and I also wish and request people from other countries to do the same.”