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Sri
Lanka, a pioneer in economic liberalization in the South Asian region,
has for more than two decades been pursuing free market policies,
introducing fundamental reforms in the broad areas of investment,
fiscal policy, tariffs and exchange rates. the progressive liberalization
of the economy since 1977 has resulted in a business friendly environment
in Sri Lanka.
 the
major objective of the present government's industrial strategy
is to develop a competitive and export-oriented market economy.
the industrial strategy has been specifically designed to create
a climate conducive to accelerated growth in the foreign and local
investment.
the economic
performance of the country has been encouraging despite the escalation
of separatist conflict in the Northern and the Eastern provinces
of Sri Lanka.
In 2000, Sri
Lanka's economy grew strongly, its inflation remained moderate and
unemployment declined further. these positive developments were
commendable as they were achieved against three major unfavourable
developments: a sharp increase in petroleum import prices, increased
national security expenditure and adverse weather conditions. However,
largely due to these unfavourable factors, the balance of payments
and the public sector deficit worsened. As a result, domestic bank
borrowings by the government and public corporations increased sharply
and external reserves declined, building up pressure on the rupee
to depreciate, while interest rates moved up substantially. Appropriate
policy measures were introduced to arrest this situation. these
measures included a rationalisation of public expenditure, revenue
enhancing measures, upward adjustments in administered prices, free
floating of the rupee and administrative measures to restrain speculative
activities. the foreign exchange market has now stabilised and measures
are being taken to reduce the public sector deficit. Interest rates
are expected to come down. A turnaround in the balance of payments
and external reserves has been projected during 2001.
TRADE
Sri Lanka and
China have a long history of trade relations between the two countries.
the period beginning 1952 marked a new chapter in trade relations
between the two countries with the signing of the Rubber and Rice
Agreement. In the following years, two Joint Commissions were established
to deal with economic co-operation and trade between Sri Lanka and
China. In an agreement signed in 1984, these two Joint Commissions
were merged into one to deal with economic and trade co-operation
matters. Since then, the Commission has met several times to work
on the strategies concerning the development of trade and economic
co-operation between the two countries.
the trade between
China and Sri Lanka continues to register a steady growth. However,
the trade balance has constantly remained in favour of China. In
the year 2000, the total trade turnover registered US$ 457.8 million.
Sri Lanka exported US$12.8 million worth of goods to China, while
imports from China recorded US$ 445million. Sri Lanka's imports
from China constitute an average of 3% of its total imports, whereas
Sri Lanka's exports to China has recorded less than .05% of China's
imports.
| Year |
Imports |
Exports |
Balance
of trade |
total
trade turnover |
| 1996 1997 1998 1999 |
8,187.8 10,013.8 14,540.5 11,367.6 |
616.4 435.5 586.9 236.0 |
7,571.4 9,578.3 13,953.6 11,131.6 |
8,804.2 10,449.3 15,127.4 11,603.6 |
Sri Lanka's
exports to China:
Natural rubber,
tea, shrimps prawns,
Imports from
China :
Knitted and
crocheted fibre, articles of iron and steel, machinery, cement,
toys etc.
trade Agreements:
Sri Lanka concluded
an agreement with the People's Republic of China on 11th July 1997
to facilitate the latter's accession to the Bangkok Agreement. Under
this agreement China granted tariff concessions on several lines
of products, which are of export interest to Sri Lanka.
In January 2000,
Sri Lanka signed a bilateral agreement with China in supporting
the latter's accession to the WtO.
Sri Lanka
China Business Co-operation Council
the Sri Lanka-China
Business Council was established in Colombo in1994 with the primary
objective of promoting trade and investment between the two countries.
For further details concerning the functions and services offered
by the Sri Lanka- China Business Council please write to:
President
Sri Lanka China Business Co-operation Council
C/O National Chamber of Commerce of Sri Lanka
450, D.R. Wijewardena Mawatha,
Colombo
10 Sri Lanka
tel . 00 94 1 689805/ 689597
Fax. 00 94 1 989596
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