Sri Lanka and the People's Republic of China (PRC) accorded each other diplomatic recognition in January 1950. In April 1952 both countries entered into the historic Rubber-Rice Agreement, whereby Sri Lanka supplied rubber to China under a barter arrangement, receiving rice from China in return. this agreement was entered into at a time when certain countries had imposed a ban on the supply of strategic materials, which included rubber, to China. Following the electoral victory of the Mahajana Eksath Peramuna (MEP) led by the late Premier S.W.R.D. Bandaranaike in April 1956, the two countries established full diplomatic relations on 7th February 1957 and exchanged resident embassies in each other's capitals. Consequent to the establishment of diplomatic relations, both countries took a number of steps in the political, economic, trade and cultural fields to strengthen their bilateral relations.

Politically, Sri Lanka expressed unwavering support for the PRC's "One China" policy. It consistently supported moves at the UN to restore the right of PRC to occupy the seat of China at the UN. Both countries have been cooperating in multilateral fora on various bilateral and international issues. In 1996, Sri Lanka welcomed the transfer of sovereignty of Hong Kong to the PRC.

Economic cooperation between the two countries has also grown significantly since the establishment of diplomatic relations. Sri Lanka in the past has been the recipient of 7 grants totaling SL Rs. 130.4 million and 16 lines of credit totaling SL RS 394.8 million from China. the most prominent symbol of Chinese economic assistance to Sri Lanka remains the Bandaranaike Memorial International Conference Hall (BMICH), which is an enduring monument to Sri Lanka-China relations. China has also funded several other projects including the Supreme Courts Complex, the Central Main telecommunication Exchange, the Ginganga Flood Protection Scheme, the re-development of the Lady Ridgeway Children's Hospital, among others.

trade relations between the two countries were formalized by the signing of a General trade Agreement and trade and Payment Agreement in 1952. In 1982 both countries signed a trade Agreement with a view to setting up a Joint trade Committee. In 1984 an Agreement on Economic and trade Cooperation was signed. In 1991 the two Joint Committees formed under the Agreement of 1982 and 1984 were amalgamated to constitute the Sri Lanka-China Joint Commission for Economic and trade Cooperation.

Exchanges between political personalities between China and Sri Lanka further helped to strengthen the friendly relations between the two countries. Some of the important visits undertaken by Chinese political personalities include the visits of the Chinese Premier Zhou Enlai in 1957 and 1964; the Chinese Premier, Li Peng in December 1990; the Chinese Foreign Minister and Vice Premier, Qian Qichen in February 1994; Chinese Vice Foreign Minister, tang Jiaxuan in August 1995 and August 1997; the Vice Chairperson of the Standing Committee of the National People's Congress. Madam Chen Muhua in November 1997; and Chairman of the Chinese People's Political Consultative Conference, Li Ruihuan in 1999. the Chinese Premier Zhu Rongji visited Sri Lanka in May 2001.

Several high-level visits by Sri Lankan leaders to China have also been undertaken during the last 40 years. Prime Minister Sirimavo Bandaranaike paid her first official visit to China in 1962, and subsequently in 1972 and 1977. President J.R. Jayewardene and Prime Minister D.B. Wijetunga visited China in May 1984 and May 1989, respectively. President Kumaratunga paid a State Visit to China in April 1996. Foreign Minister A.C.S. Hameed visited in 1979. Mr. Lakshman Kadirgamar, Minister of Foreign affairs paid visits to China in 1995 and 1998. Minister Kadirgamar also represented Sri Lanka at the Hong Kong hand over in July 1997. Premier Zhu Rongji led a high level delegation to Sri Lanka on 18 May 2001,consisting of tang Jiaxuan,Minister of Foreign Affairs, Shi Guangsheng, Minister of Foreign trade and Economy Cooperation and Zhang zhigang,Vice Minister of State Economic and trade Commission.

In the cultural field, Sri Lanka signed a Cultural Cooperation Agreement with China in August 1979. this agreement has facilitated regular exchange of artistes between two countries. Annually, the Chinese Government offers approximately 20 scholarships to Sri Lankans in areas such as medicine, engineering, agriculture etc.

the Sri Lanka Embassy in Beijing is concurrently accredited to the Democratic People's Republic of Korea and Mongolia.