Govt. eyes crucial investment talks during Chinese President visit

Saturday, 6 September 2014 00:18 - - {{hitsCtrl.values.hits}}

China largest source of FDI to Sri Lanka in 2013
Infrastructure, food processing, pharmaceuticals, alternative energy, tourism, IT and BPO key sectors
14 Chinese companies operating under BOI, 2500 jobs

By Uditha Jayasinghe The Government is hoping to attract key investment during Chinese President Xi Jingping’s upcoming visit, with special focus on infrastructure, tourism and logistics. China was the largest source for Foreign Direct Investment (FDI) to Sri Lanka in 2013, accounting for $ 240 million of the island’s total $ 1.42 billion. In addition, the two countries continue to have huge loan-based economic engagement estimated at over $ 4 billion, including a $ 1.2 billion coal power plant and a new harbour as well as numerous road and railway projects. Investment Promotion Minister Lakshman Yapa Abeywardene confirmed to the Daily FT plans to attract significant investment from China with special focus on China’s 21st Century Maritime Silk Route policy. “We are looking at sectors such as infrastructure development, high technology manufacture, food processing, the manufacture of pharmaceuticals, alternative energy, tourism, IT and BPO projects,” he said. Other areas are tied in with the Government’s five-hub strategy that focuses on utilising Sri Lanka’s geographical location. This would encourage Chinese companies to invest in warehousing and logistics centres and establish regional headquarters in line with the Government’s aviation and shipping hub scheme. “We are also going to improve in research and development, to promote Sri Lanka’s capacity in the hub strategy. Chinese enterprises are welcome to invest in these sectors.” Abeywardena also noted there are currently 14 Chinese companies operating under the Government’s investment arm, the Board of Investment (BOI). These enterprises have created 2,500 jobs, mainly for local workers. There are engaged in port development, deep sea fishing, manufacturing, power, textiles, assembly of bicycles and the processing of fruits and vegetables. Chinese companies are also involved in large-scale projects such as the land reclamation and development of Colombo by the China Harbour Corporation to build a new business district for Colombo worth $ 15 billion. Another massive venture is the Northern Expressway and the Colombo-Kandy Expressway, an investment of $ 2.5 billion by China Merchant Holdings, which will connect the southern and northern regions of Sri Lanka. The same company is building and operating the Colombo South Terminal, which is a $ 500 million project in Sri Lanka’s main sea port. Multinational Shangri-La Hotels based in Hong Kong has already pledged $ 800 million to build a seven-star luxury hotel in Colombo and a golf resort in the southern town of Hambantota. “These projects are proof China has an important stake in Sri Lanka’s economic growth and future prosperity,” the Minister added. Abeywardena is also upbeat of China’s 21st Century Maritime Silk Route policy, insisting he is “convinced” of its benefits to Sri Lanka given the country’s strategic location. “Sri Lanka does have a policy of becoming a hub in aviation, maritime, energy, knowledge, commercial and tourism areas. These objectives will be strengthened by our country becoming a central part to Chin’s 21st Century Maritime Silk Route policy.” Earlier this month Abeywardena expressed optimistic views of signing a crucial Free Trade Agreement (FTA) with China during President Xi’s visit. The FTA has been in the works since early last year. “While it is unlikely that a relatively small country such as ours can match the range of goods that China exports, we are hopeful that through investment, new industries can be set up to meet the demand of Chinese markets.” The Government hopes the FTA will improve exports to China that still make up only around 1%. “I am very pleased that there is now a very strong relationship between Sri Lanka and China. I would like to see a greater quantum of Chinese investment in Sri Lanka in the future and to assure Chinese entrepreneurs that they are most welcome to invest in Sri Lanka.” Sri Lanka has targeted $ 2 billion in FDI for 2014 and attracted $ 817 million for the first half of the year. The bulk of investments are to the tourism industry that has boomed since the end of a three-decade war in 2009. Tourist arrivals from China have also increased impressively during the past three years. The Government estimates Sri Lanka will have to attract an average of $ 4 billion or more per annum to meet targeted growth rates of 8%. This year the country is expected to grow by 7.8%, according to the Central Bank.

China enthusiastic on partnering gem industry

By Shabiya Ali Ahlam The Chinese gem and jewellery industry yesterday expressed keen interest in establishing a long-term partnership with Sri Lanka for the sourcing of high quality stones. Head of the Coloured Gemstone and Jewellery Chamber of Commerce Guangzhou and Guangdong Golden Jewellery and Jade Industry Association, who separately led two delegations of a total of 80 members for the FACETS 2014 exhibition, expressed that the main purpose of their visit to Sri Lanka was to establish business relationships with local players. Pointing out there is significant demand for coloured stones in China and they are always on the lookout for suppliers, Coloured Gemstone and Jewellery Chamber of Commerce Guangzhou Executive President Wang Hai Jin said: “Since Sri Lanka is one of the main coloured stones producing countries, we find it will be an excellent partner since it can give us very good sources of raw materials. It is the link for us to deal with people in the coloured stone business from mining to eventually selling stones to us.” Jin added that within the following days his team is keen on finding partners who can provide high quality stones at the best prices. Sharing similar sentiments, Guangdong Golden Jewellery and Jade Industry Association President Yang Zhao Guang noted that while the nation not only produces the best gemstones in the world and also creates a trading channel, it is a “first class” platform and has excellent terms and an environment that is appealing to the Chinese gem business segment. “We strongly believe that between our countries this is an excellent beginning to work together to achieve our common goals, complementary of our advantages, communication and sharing of our information and mutual developments of our business,” expressed Guang.