China wants consistent policies for investment

Thursday, 17 November 2016 00:08 - - {{hitsCtrl.values.hits}}

By Devin Jayasundera

Outspoken Chinese Ambassador Yi Xianliang said yesterday that if Sri Lanka was to reap the benefits of China’s massive outbound investment drive the country should have the right policies in place and ensure consistency at all levels of Government.

China, the world’s third-largest overseas investor, is experiencing diminishing opportunities and sluggish growth in the domestic market. In 2015 Chinese outbound investment exceeded inbound investment thus making it an economy with a net capital outflow. According to the Ambassador, Chinese outward foreign direct investment is to reach $ 150 billion this year. “If Sri Lanka could attract merely 1% of that $ 1.5 billion will come to your country,” said Xianliang.

“You have this potential but at present you don’t have the policy. I believe that such policies would come out soon,” he professed.

China is Sri Lanka’s second-biggest trading partner, contributing almost 16% of the total imports to the country. In the period of January to July in 2016, Chinese investment to Sri Lanka rocketed up to 130% compared to the same period last year, according to the China Council for the promotion of international trade.

Xianliang also lamented over past misunderstandings with the Government regarding the much-debated Port City Project. “I have made it clear to the Sri Lankan President and Prime Minister that this should not happen again,” he said.

Chinese tourists are also another major growth driver for countries looking for high potential foreign exchange revenues streams. Xianliang points out that Sri Lanka has not taken advantage of this prospect. “The number of outbound Chinese tourists reached 130 million last year. However, the number going into Sri Lanka was a mere 220,000. This year the number of Chinese tourists could reach 300,000. That number could exceed 1 million in the next five years. This in my view could be the greatest business opportunity for you.”

Addressing the Chinese business community present at the gathering, Xianliang said Sri Lanka was a larger economy than it was given credit for. “Sri Lanka is not any small country it is a medium-size country. Its territory is the size of two Taiwan provinces of China. That is about 65,000 square kilometres. Also under its jurisdiction there is 560,000 square km of sea. Even Poland is two-thirds the size of

Sri Lanka.”

In reference to the oft-quoted strategic geographic advantage attributed to Sri Lanka, Xianliang remarked that that alone would not help Sri Lanka develop its economy without effective government systems. “The geographic location is important but as I said to the Prime Minister you should not emphasise too much on that otherwise your officials and government departments will sit there and do nothing until others come to you. I found out that even when I go to those departments I cannot find anyone. That is a problem.”