China records number 1 slot as Sri Lanka’s major partner in trade
China was reportedly able to surpass India in becoming Sri Lanka’s major trade partner in terms of both imports and exports despite disruptions caused to the supply chain due to the pandemic last year, according to the Central Bank of Sri Lanka’s (CBSL’s) annual report for the financial year 2020.
The US remains in third place as a trade partner to Sri Lanka, local news reports noted.
Although China has surpassed in total trade (exports and imports) to Sri Lanka, there is a considerable decline overall due to the impact of the pandemic, The Morning has reported.
According to reports, the total trade of China, India, and the US together was valued at US$ 12.6 billion in 2019, whereas it has shrunk to US$ 10.5 billion in 2020.
In 2020, country-wise, the notable trade surpluses were recorded from the US, UK, Germany, Belgium, Netherlands, and Italy, the news report has further stated.
Sri Lanka had reportedly recorded trade deficits from Asian region countries such as China, India, the United Arab Emirates (UAE), Singapore, Malaysia, and Japan. Thus, in order to improve trade balances, increasing export earnings from and reducing import expenditure to the Asian region countries appears to be a pragmatic approach.
Despite the decline of almost US$ 700 million in 2020, the US has remained the single largest export destination for Sri Lanka, with 42% of the latter’s garment exports going to the US in 2020, the news report has added.
OSL take:
Sri Lanka and China enjoy strong bilateral and trade ties. China is also a key development partner of Sri Lanka. All this has placed Sri Lanka prominently in China’s belt and road initiative (BRI). Sri Lanka’s geographical positioning in the Indian ocean and the many trade agreements as well as trade concessions enjoyed by the country have poised Sri Lanka as an up and coming business hub in the South Asian region. Chinese businesses/investors could therefore confidently explore business/investment opportunities in Sri Lanka and also look at forming joint ventures/partnerships with local businesses.
| Article Code : | VBS/AT/20210510/Z_4 |