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Friday, 19 September 2014 00:18 - - {{hitsCtrl.values.hits}}
Global giant HSBC Sri Lanka and Maldives CEO Patrick Gallagher yesterday said the record 27 agreements signed with China during President Xi Jinping’s visit would be a major boost for Sri Lanka.
Noting that the historic visit, first by a Chinese leader in 28 years, places bilateral ties on an incredibly strong footing, Gallagher said HSBC was highly impressed by the developments.
“It is great to see the level and depth of the engagement and the meaningfulness of the set of agreements signed on Tuesday to strengthen future bilateral cooperation between China and Sri Lanka. The contracts signed weren’t meaningless or wildly worded MOUs about potential future cooperation,” the HSBC Sri Lanka CEO said.
“The amount of cooperation and hours of work it took from both sides to have 27 agreements ready is impressive and signals very significant cooperation. So we are very excited. The agreements will be a major enhancer of GDP growth in the medium term in Sri Lanka as it has been since post war,” emphasised the local boss of HSBC, which has 160 branches in over 50 cities in China.
Among the 27 agreements signed by Sri Lanka and China were concerning economic and technical cooperation, power and energy, agriculture, healthcare, urban development, highways and road development, maritime and marine research, media and arts and science and education.
Gallagher said one of the agreements signed between Central Bank of Sri Lanka and the People’s Bank of China partnering for a $ 1.7 billion SWAP was significant from a financial services industry and trade financing perspective in addition to bilateral trade.
The Head of by far the largest foreign bank in Sri Lanka in terms of assets also said explicit commitment to fast track the proposed Free Trade Agreement (FTA) between Sri Lanka was another major boost.
According to National Chamber of Exporters in Sri Lanka, trade between Sri Lanka and China has tripled in recent years, reaching $ 3.6 billion in 2013 from $ 1.1 billion in 2006.
“In this background the proposed FTA between Sri Lanka and China offers an ideal platform for Sri Lankan business, especially export-oriented enterprises, to harness the Chinese market for optimum benefit,” said Gallagher. “The FTA will turbo-charge the true potential for bilateral trade and inflows,” he added.
Given its unparalleled reach in China, HSBC is well placed to support both Chinese and Sri Lanka companies to maximise from the benefits of the FTA. “Companies in both countries can leverage our network to access expertise and local knowledge to trade effectively for mutual benefit,” Gallagher added.
Given the growing ties and the vast potential, HSBC has set up a dedicated China Desk in the bank to serve its customers. China has also become a major development partner of Sri Lanka especially in the field of infrastructure projects. HSBC has been the predominant transaction bank for most of these large projects.
The two Central Banks of China and Sri Lanka on Tuesday entered into a bilateral Currency Swap Agreement which provides an opportunity to exchange Sri Lanka’s National Currency (LKR) with the Chinese National Currency (CNY) for trade-related activities and other purposes agreed upon by both parties.
The Swap Agreement facilitates the exchange of a maximum of Rs. 225 billion and CNY 10 billion for a three-year tenure. This Swap Agreement is also expected to facilitate the rapidly-growing bilateral trade and investments between the two countries, as well as contribute towards the further enhancement of the financial cooperation between the two Central Banks.
