In recent years, Sri Lanka and China have developed increasingly closer economic and trade relations with China now having become the largest investor in Sri Lanka.
During President Mahinda Rajapaksa’s state visit to China in May 2013, the two countries signed a Memorandum of Understanding and agreed to establish a Joint Working Group on Trade to study the feasibility of a China – Sri Lanka free trade agreement (FTA) and measures to enhance Sri Lankan exports to China. The negotiations on the FTA will be launched during Chinese President Xi Jinping’s visit.
Sri Lanka’s exports to China have increased from US$ 28.39 million in 2005 to US$ 121.63 million in 2013. Some of Sri Lanka’s main export items to China include coir fibre, garments, tea, rubber and precious stones, among others.
Sri Lanka’s imports from China on a range of items have increased in recent years. Some of the main import items include cotton, textiles, iron and steel, vehicles and parts, and plastic products, among others.
The Sri Lanka – China Business Cooperation Council was established in 1994.
This private-sector initiative was initiated with the primary objective of promoting and enhancing mutual interaction between the private sectors of the two countries as well as enhancing bilateral trade and investments. The Sri Lanka Embassy in China together with the China Council for the Promotion of International Trade organised a 120-member delegation from China to participate in the Commonwealth Business Forum that took place in Sri Lanka in November 2013 during the Commonwealth Heads of Government Meeting (CHOGM) 2013.