Friday Nov 22, 2024
Friday Nov 22, 2024
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Chinese Ambassador Qi Zhenhong addressing the Sri Lanka Investment Forum
Sri Lanka’s biggest investor China this week recommended South Asia’s hub island for international companies, saying the time was right to harness opportunities even though the country needed to address several longstanding challenges.
“Despite existing challenges, the time has come to invest in Sri Lanka,” Chinese Ambassador Qi Zhenhong told global attendees of the virtually-held Sri Lanka Investment Forum in a presentation containing positives and constraints for doing business in Sri Lanka. From a bilateral perspective, the Ambassador said longstanding strong ties between Sri Lanka and China continue to be enhanced further. “Sri Lanka’s National Policy Framework ‘Vistas of Prosperity and Splendour’ is being embraced by the Belt and Road Initiative of China. As a result, more and more Chinese businesses are investing here in increasingly diverse areas, ranking first on the list of FDI stock in Sri Lanka,” said.
He expressed confidence in the strong commitments by the Government to address challenges and noted that with the wisdom of experienced investors, China was looking at an extremely promising future of its investment cooperation with Sri Lanka.
If attendees of SLIF expected a very rosy presentation from China, then they were in for a surprise. Ambassador Qi made a frank assessment of the pros and also the cons of investing in Sri Lanka.
Among positives were Sri Lanka’s strategic location within South Asia which unfolds opportunities as a key maritime hub between East and West with great potential for investments in logistics parks and overseas warehousing.
China also finds Sri Lanka enabling policy framework post-war as positive. He said the Government had strived to incrementally improve the regulatory framework for foreign investment, continuously better the investment climate, actively seek cooperation opportunities and negotiate trade agreements with its partners.
The third compelling factor Qi said was multiple welcoming platforms. “Sri Lanka has established 10 plus Government-led Export Processing Zones, industrial parks and other platforms dedicated to drive investments,” he said.
Through these platforms, the investors enjoy different types of benefits in areas such as review and approval, tax incentives, foreign exchange control, land leasing, and supporting services, and thus are more inclined to invest.
“The brand-new Colombo Port City and the up-and-running Hambantota Port project are also platforms of similar nature that the Sri Lankan Government strongly supports. I do hope our Chinese companies would seize this historical opportunity,” the Ambassador added.
Focusing on some of the challenges a global company or investor might encounter, Qi said that with Sri Lanka having a relatively small-scale economy, its industry was not strong. “Its development of the supply chain and supporting facilities is far from perfect.”
The second challenge was although the policies to attract foreign investment were in place, several problems still existed at the stage of implementation, which he listed. They are lack of concrete measures, cumbersome administrative procedures, lengthy coordination process among Government agencies and inefficiency in decision-making, etc. “Much remains to be done in terms of investment facilitation,” he added.
Qi also said Sri Lanka had a dynamic environment of public opinion, which he opined investors must take note of. “Among the diversified views, unfortunately, there are at times baseless accusations and attacks on Chinese businesses,” the Ambassador added.
He also used the SLIF platform to share some suggestions for Sri Lanka to further improve the investment environment, taking into consideration lessons learnt in China over 40 years reform and opening-up.
He said Sri Lanka needed to create a more favourable policy framework. “Only with the guarantee of the right policies can we expect foreign investment to take root and bear fruit. Therefore, it is important for the Sri Lankan Government to ensure the consistency, stability, transparency and effectiveness of its investment policies to the largest extent,” Qi said.
In that context he said China and Sri Lanka needed to continue joint efforts promptly to carry out the outline of the medium- and long-term plans for investment cooperation and development between the two countries signed in 2017.
At the same time, negotiations on the China-Sri Lanka FTA should be resumed as soon as possible. “If a timely agreement can be reached, it will surely further promote our bilateral trade and investment,” he added.
To better shape the friendly business environment, the Chinese Ambassador said creating an easy-to-do-business environment and providing favourable conditions for investors were critical. He said the host country could obtain an early advantage from the get go, in the increasingly competitive world to attract international investment.
“We count on the Sri Lankan Government’s efforts to further streamline its review and approval processes, promote digitalisation in the administration and improve the efficiency of Government services provided (for instance, to establish the electronic one-stop-shop for investors), with the view to minimising the cost of communication and coordination between businesses and authorities,” Ambassador Qi said.
The need to better cultivate the pro-business atmosphere of public opinions was also stressed.
“We note that in recent years there have been false attacks targeting Chinese businesses in the media while discussing the Colombo Port City and Hambantota Port from time to time. The accusation sometimes even labels the Chinese Government of creating a ‘debt trap’ and ‘colonisation’ in Sri Lanka,” recalled the Ambassador.
“Those groundless accusations have to some extent affected the healthy atmosphere for our extensive cooperation. As a matter of fact, those Chinese companies took on the projects at the request of the Sri Lankan Government in an hour of need, rather than ‘taking advantage’ as claimed by some,” he added.
He said the Belt and Road Initiative was guided by the principles of extensive consultation, joint contribution and shared benefits, with the view to achieving a win-win outcome, rather than being a “zero-sum” game.
“I believe, in order to properly address the difficulties encountered in bilateral cooperation, both sides should always keep in mind the mutually-beneficial nature of our cooperation and our strong partnership as a whole. We should neither overlook the prominent problems arising in key projects because of our friendship, nor can we allow anxiety to cloud our judgment over short-term gains and losses,” Qi opined.
“We need to avoid the mentality of feeling on the losing side when the projects are making progress with promising benefits or to throw blame around when projects are moving slow or temporarily hindered,” he added.
The Chinese Ambassador also said the SLIF was of great significance against the backdrop of Sri Lanka’s current combat against COVID-19 and noted it was timely and necessary in facilitating Sri Lanka’s economic recovery in the post-pandemic era.
