Sri Lanka is negotiating free trade agreements with two Asian economic powerhouses, India and China, with an aim to become a financial hub of the continent, Prime Minister Ranil Wickremesinghe has said.
Addressing a function at the opening of the Bank of China branch here, he said that several projects, funded by China, were underway in the country while agreements on several others have been reached.
China is investing in various infrastructure projects in Sri Lanka which has signed the Beijing’s ambitious “One Belt, One Road” (OBOR) initiatives.
Sri Lanka, in December last year, formally handed over the strategic southern port of Hambantota to China on a 99-year lease, in a deal dubbed by the opposition and trade unions as “a sell-out” after.
Under the lease agreement, two Chinese firmsHambantota International Port Group (HIPG) and Hambantota International Port Services (HIPS) managed by the China Merchants Port Holdings Company (CMPort) and the Sri Lanka Ports Authority will own the port and the investment zone around it, officials said.
The port, overlooking the Indian Ocean, is expected to play a key role in China’s Belt and Road initiative, which will link ports and roads between China and Europe.
The Sri Lankan government had signed a USD 1.1 billion deal in July last to sell a 70 per cent stake in the Hambantota port to China. The island nation received USD 300 million as the initial payment under the 99-year lease agreement.
The Prime Minister said that Sri Lanka’s economic relationship with China is growing with agreements reached on several projects.
He said that Colombo was already fast developing with the Chinese funded port city being constructed and once completed will be a financial city.
Wickremesinghe said that by the end of the decade Sri Lanka will have a good infrastructure network between Hambantota and Kandy.
“Sri Lanka is looking to be the financial hub of Asia as China becomes the powerhouse of Asia. For this reason, Sri Lanka is now working with China on a Free Trade Agreement (FTA).
“The FTA with China will be in addition to the FTA Sri Lanka is discussing with India resulting in the country having economic trade deals with the two major countries in Asia,” the Prime Minister said, it is important for the country’s economy to grow.
He also said there has been much progress in building the Chinese funded port city, a pet project of former President Mahinda Rajapaksa regime which was halted after the unity government came to power in 2015.
It was, however, restarted notwithstanding statements made by the Wickremesinghe’s party when in opposition against the project.
He said that the opening of branch of the Bank of China, the world’s fourth biggest in terms of assets, will help bring Chinese investments to Sri Lanka.