Sri Lanka and China to negotiate free trade deal, expressway funding

May 28, 2013 (LBO) – Sri Lanka and China will negotiate a free trade deal and Chinese support has been pledged for a planned expressway to the north of the island following a state visit by President Rajapaksa to Beijing. During bilateral meetings, agreement had been reached to set up two committees that will work towards a free trade deal the presidents media office said. A target to attract 100,000 Chinese tourists to Sri Lanka has been set.

“This would give Sri Lankan products such as apparel, gems and jewelry, tea and rubber wider access in the Chinese market,” the statement said.

Last year Sri Lanka imported 2.66 billion US dollars of goods from China and exported only 113 million US dollars in 2012.

Chinese imports and the overall trade deficit of Sri Lanka have expanded in recent years because the Treasury has borrowed heavily from China’s Export Import bank in particular which generate imports from the country.

President Rajapaksa is on a four day state visit to China, accompanied by senior officials and his son Namal Rajapaksa, his seventh to the country.

Chinese President Xi Jinping, who took over in March this year had said that the frequency indicated the strength of bilateral ties.