China’s new ‘World Bank’ opportunity for Sri Lanka

• Successful Kunming brought bigger trade: EDB’s Egodage
• AIIB will open Silk Road for Sri Lanka: Chinese official Xiong  
• n2014 Sino-Lanka trade at $ 3.7 b
• “Just as exports, we want Chinese imports too”: Egodage

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EDB Chairman/CEO Bandula Egodage (left) addresses Yunnan Daily Press Group Director Xiong Yan (right side, second from right) on 2 July in Colombo

Just as Sri Lanka vies for China’s booming export market, the country also yearns for imports from China and Sri Lanka is an important location in China’s strategic Silk Road Economic Belt project and China’s new World Bank.

“Sri Lanka is an important link in China’s $ 40 b Silk Road Economic Belt, which is a mutually-beneficial project for both Sri Lanka and China. We are also pleased about Sri Lanka joining the Asian Infrastructure Investment Bank (AIIB) this June,” said Yunnan Daily Press Group International Communication Center Director Xiong Yan on Thursday in Colombo.

Yan, who was addressing EDB Chairman Bandula Egodage and officials at the EDB, is here leading a four-member Yunnan press delegation on a fact-finding mission.

“We are here on a fact finding mission to Sri Lanka. The Sri Lankan pavilion at the recently-concluded third China South Asia Expo was well received. We are trying to understand how things are shaping in Sri Lanka. We also want to assess Yunnan-Sri Lanka trade relations, cooperation mechanisms and how to further improve them,” said Yan.

He added: “AIIB will lead the way in our Silk Road Economic Belt project. This new international bank, proposed by China and expected to be operational by the end of this year, can greatly help in securing funds for priority Sri Lankan heavy infrastructure projects. During this visit, we are also keen to find out Sri Lanka’s investment priorities and what a bank such as AIIB could do for the country.” 

The new AIIB, touted as China’s ‘World Bank,’ will start with $ 50 b initial capital and was proposed by Chinese President Xi Jinping in 2013. On 29 June, Sri Lanka signed the articles of agreement to join AIIB–along with 57 other countries in Beijing. Sri Lanka is now considered a founding member of AIIB.

“We welcome China’s interest in the development of the Sri Lankan economy,” said Egodage. “Chinese investors and manufacturers can invest in Sri Lanka and using the India-Sri Lanka FTA, aim to penetrate the growing Indian market. We invite keen Yunnan investors to invest here. Minister Rishad Bathiudeen also led a strong Lankan business and trade delegation to the recently-concluded Kunming Fairm comprising 127 Lankan participating institutions. Some of them reported to us $ 1.2 m in confirmed spot sales, $ 850,000 confirmed orders and 728 business inquiries for future linkages. We are awaiting more evaluations from more participants.

“The export community in Sri Lanka, especially the SME sector, is looking forward to this annual event as it gives them an opportunity to gain overseas experience at a low cost and make spot sales. This event also provided a good platform to create awareness about investment possibilities in Sri Lanka among the Chinese business community. Sri Lankan exports such as apparel use a significant volume of Chinese imports as production inputs and therefore, just as Sri Lanka vies for China’s booming export market, it also yearns for imports from China.”

In 2014, Sri Lanka’s total trade with China stood at $ 3.7 b, of which $ 3.4 b were imports to Sri Lanka.