Sri Lanka seeks stronger economic ties with China

Tuesday, 9 August 2011 00:37 - - {{hitsCtrl.values.hits}}

(Reuters): Sri Lanka’s President Mahinda Rajapaksa said on Monday he wants to increase economic cooperation with China, state news agency Xinhua reported, ahead of his four-day visit to China this week.

Sri Lanka looks forward to increasing cooperation in trade and investment from China as Colombo has already taken many steps to improve the investment environment with tax rebates and with no restrictions on the remittance of profits from investment, Rajapaksa told Xinhua in an interview.

“We also appreciate very much the understanding shown by China on the pressures of the post-conflict period, and the support extended to heal the wounds of war,” Xinhua cited Rajapaksa as saying.

China is Sri Lanka’s biggest bilateral donor and has financed billions of dollars worth of post-war infrastructure projects in Sri Lanka, including the massive Hambantota port on the southern coast, a power plant, airport and highway.

That has irritated India, which has long considered Sri Lanka within its sphere of influence and views the Chinese presence on its island neighbour as a potential security threat.

Rajapaksa will hold talks with Chinese leaders this week in China, where he arrives on Tuesday, Xinhua said. Sri Lanka said in late June that China has agreed to financially assist it with $1.5 billion for several infrastructure projects over the next three years.

The Indian Ocean island nation has planned over $6 billion worth of such construction including new air and sea ports, express highways, coal and hydro power plants, and a railway network.

China in May appeared to support Sri Lanka’s efforts to avert an international probe into allegations its soldiers committed war crimes, saying the Sri Lankan government could handle internal affairs on its own.