By Colombo Telegraph “Although Sri Lankan President Rajapaksa trumpets the importance of Sri Lanka,s friendship with China, the relationship is verylopsided in terms of trade. For example, in 2008 Chinese exports to Sri Lanka constituted 96% of total bilateral trade. In terms of investment, Hong Kong has become a key source of foreign direct investment to Sri Lanka, while China proper focuses on direct government aid. In contrast, Sri Lanka investment in China consists of a few tea shops. Though at times the Government of Sri Lanka (GSL) asserts it does not need the U.S. and the West since it can turn to new friends such as China, there is no indication that China can replace Western export markets. In terms of investment and trade importance, Sri Lanka’s new friends cannot compete with her old ones in the United States and EU.” the US Embassy Colombo informed Washington.
Under the subheading “SRI LANKAN-CHINESE TRADE TILTS HEAVILY TOWARD CHINA” the ambassador wrote “China remains one of Sri Lanka’s fastest growing trading partners. Trade between the two countries almost doubled from 2005 to 2008, rising from US $660 million to US $1.138 billion. While Sri Lankan exports increased from US $29.4 million in 2005 to US $46.8 million in 2008, imports from China have grown even more. In 2008, Sri Lanka imported US 1.091 billion from China resulting in a net trade deficit of US 1.044 billion. China is one of Sri Lanka’s largest sources of imports, second only to India, which totaled more than US 3.4 billion in 2008. Sri Lanka’s primary exports to China include raw commodities, apparel items, and tea. Sri Lanka primarily imports various types of machinery and equipment, raw materials, and chemicals from China. Sri Lankan imports from China accounted for a significant portion of total Sri Lankan imports while Sri Lankan exports to China comprised a very small portion of total exports in 2008.” Read Mor
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