Posted on November 16th, 2016


Sri Lanka has had cordial links with China from ancient times. The Sinhala kings had continuous diplomatic links with the Chinese emperors, from Anuradhapura times to the medieval period. In the post independence period too, there were good relations between the two countries. The Peoples Republic of China was established in October 1, 1949 and Sri Lanka recognised it soon after on January 6, 1950.  Then came the Ceylon-China trade agreement of 1952, known as the ‘Rubber – Rice pact’.   J.B.Kelegama said that this Pact was undoubtedly the most useful trade agreement negotiated by Sri Lanka and one of the most successful and durable trade agreements in the world, having been in operation for thirty years.

Rohan de Soysa recalls that his father Terence de Soysa had with the help of a consortium bought C.W. Mackie & Co in 1946 or so, the first major British company to be Ceylonised. He had come to office one morning and found a telex on his desk from a Hong Kong agent offering to pay more than the market price if he would ship rubber to China. The other rubber producing countries were refusing to do so. Ceylon also was a friend of America so my father was in a quandary.”

Having ascertained it was not a joke; he met Prime Minister D.S. Senanayake, and asked him what action to take as China was at war with America in Korea.  D.S. had asked him, is it good for our country?” Upon being told it was very good, D.S. told him to go ahead. After making the first shipment, my father called a meeting of all the rubber shippers, and informed them of the situation. He proposed to divide the shipments among all of them according to their percentage of shipments abroad in the previous year, reserving a slightly higher percentage for Mackie & Co, to which all agreed. This was the foundation stone of the Rubber-Rice pact” concluded Rohan.

In the 1950s there was a rice shortage in Sri Lanka. The price of rice in the world market was high and Sri Lanka, then Ceylon, did not have the money to buy. Sri Lanka was facing a serious foreign exchange crisis at the time too. The rubber boom had ended with the   Korean War and the rubber price had crashed.   ‘Communist’ China was also having its own troubles. UN had imposed a resolution prohibiting countries like Malaya exporting their natural rubber to China.

R.G. Senanayake, Minister of Trade and Commerce   found that China was willing to sell rice to Sri Lanka in   exchange for rubber. This was probably conveyed through Susanta de Fonseka, Ceylon’s ambassador to Burma.  Susanta de Fonseka has been sent to Beijing in 1952 by Prime Minister D.S.Senanayake on an ‘important diplomatic assignment ‘which, we are told led to the Rubber-Rice pact. ’  Fonseka led the second delegation and was part of the first delegation to Beijing to discuss the   agreement.

The two officers who accompanied Senanayake to China, M.F .de S Jayaratne, Permanent Secretary and C.E.P. Jayasuriya, Director of Commerce, had told Kelegama   that Senanayake must be given the full credit for negotiating this Pact and that possibly no one else could have done it.  Senanayake told Parliament that political ideologies need not stand in the way of trade.  He said that China was a country of 500 million people with a unified and cohesive government. It is bound to be a major factor in world trade [someday].  He was anticipating the emergence of China as a world power.  He also pointed out that Sri Lanka had tried for four years to negotiate a loan of 50 million dollars from USA   and failed.

The Pact came into force in 1953. China agreed to pay a premium price for rubber well over the world market price.  China bought rubber at Rs 1.74 per pound when the average world market price was Rs 1.05 per lb. China also paid the handling charges for the rubber in Colombo. China supplied rice at Rs 720 per ton, well below the market price.  In Sri Lanka, Senanayake reserved the export of rubber to China and the import of rice to Ceylon, exclusively for Ceylonese traders. The foreign traders, particularly the British managed agency houses strongly objected.

China was a generous trade partner. On one occasion when China could not provide rice, it had sent rice purchased from Burma, at the price paid to Burma. ‘Not a cent more though they were entitled to add value.’  From   1958 to     1968 China gave a grant of Rs 125 million to meet part of the cost of rubber replanting. Thousands of acres of uneconomic rubber land were replanted thereby revitalising our rubber industry, said Kelegama.

‘China was large minded and forthright in their dealings, said Senanayake in Parliament.  There was no bargaining and haggling on small points. Kelegama who had participated in later dealings with China   agreed.  China bought our rubber at a premium even when other countries were prepared to sell for less, during the long period of this agreement, he said.   Sri Lanka therefore had an assured market for its rubber and an assured source of supply for her rice and this helped insure her from the vagaries of the world market.

This Pact was heavily opposed by some members of Parliament, including J.R. Jayewardene, Minister of Finance. Newspapers virulently opposed to any dealings with Communist China joined in. This opposition is given in detail in S.P. Amarasingham’s ‘Rice and Rubber, the story of China- Ceylon trade ‘.

The Pact was greeted with considerable dismay in the US. USA promptly cut off aid to Sri Lanka, under its rule of not giving aid to countries that sold strategic materials to communist countries. USA also stopped the sale of its sulphur fungicide, needed by Sri Lanka rubber plantations.  Sri Lanka came under great pressure. But the Pact was not abrogated. This showed, said Kelegama, Sri Lanka’s independent attitude to external relations and her capacity to withstand pressure from western powers. The Pact was renewed every five years, in 1958, 1962, 1967, 1972 and 1977. It was wound up thereafter as it was no longer needed.

Bandu de Silva, of the Foreign Service, recalled that attempts were   made by certain parties in Colombo to sabotage the   Pact when it came up for renewal in 1957. The prominent name was J.R. Jayewardene. Secret communications sent by the Ceylonese delegation to Colombo appeared in the Colombo press and it was suspected that the source was “Yankee Dickie”.  In the meantime, Ceylon’s ambassador Wilmot Perera it appears, had advised the Chinese not to pay the premium charge of five US cents per pound as handling charges for the rubber. Negotiations nearly broke down because of this, but China offered foreign aid in place of the premium,  despite China not being in a position to such aid. Sri Lanka  then asked for railway wagons, but China did not rush to provide them.

Sri Lanka has long since forgotten this Pact, but, fortunately for Sri Lanka, China has not. China remains forever grateful to Sri Lanka for giving it rubber when other countries, particularly Malaysia had refused to do so.  In 1964 when N.M. Perera, Minister of Finance asked China for money, China said it had no money to give but ‘when China becomes a fully developed rich country we will gave you all you need’ .

The positive benefits of this Ceylon-China agreement exceeded expectation, observed Kelegama. In addition to trade, China gave grants and interest free loans. They gifted the textile mills at Veyangoda and Pugoda, helped the Gin Ganga scheme,   restoration of Abhayagiri Dagoba  and renovated the Supreme Court complex  The  Bandaranaike Memorial Conference Hall (1973) was an outright gift. China said it wanted to give Sri Lanka a gift and Prime Minister Sirimavo Bandaranaike asked for a conference hall. China, in turn, sent persons to  the University of Ceylon at Peradeniya, to learn Sinhala. Subsequently, a Sinhala department was created in the University of Shanghai and a Sinhala broadcasting service    was started at Beijing.

In 1957, Prime Minister S.W.R.D. Bandaranaike established full diplomatic relations with China. Wilmot Perera, who had accepted the ambassadorship for a brief period to please SWRD, established good relations with Chairman Mao, Prime Minister Chou en Lai   and other leaders.  He  had good relations with Vice President Liu Shao Chi,  vice Premier Marshal Ho Lugn , Muo Mo Jo who was a leading cultural figure at the time and Pen Zhen  who had much influence in the Communist Party.  Chou en Lai   and Ho Lung were guests when  Perera  gave a dinner in honor of a visiting LSSP delegation.

Chou en Lai visited Sri Lanka in  1957 itself, followed soon after  by the Beijing Opera. Madame Soong Ching Ling vice chairman of Republic of China came and  gave a talk  at Sri Palee, Horana on February 1962. In 1986,  President Li Xiannian paid a visit.  Chinese Premier Li Peng visited  in 1990  and offered Rs 375 million in economic assistance. Chinese Premier Zhu Rongji  visited in 1996. Chinese Premier Wen Jiabao visited in 2005 and the ‘China-Sri Lanka All-round Cooperation Partnership of Sincere Mutual Support and Ever-lasting Friendship’ was signed. When President Rajapakse  visited China, in 2013, this was upgraded to ‘China-Sri Lanka Strategic Cooperative Partnership of Sincere Mutual Support and Ever-lasting Friendship.’

China gave military equipment in huge quantities for the Eelam War, including aircraft, T56 assault rifles, RPGs, naval vessels, vehicles including wheeled workshops, and armour. They were sold to us at very nominal price barely covering the cost of production. In April 2007 Sri Lanka signed a classified USD 37.6 million deal to buy Chinese ammunitions and ordnance for its army and navy according to Janes Defence Weekly. China gave Sri Lanka, apparently free of charge, six F7 jet fighters, according to Stockholm International Peace Research Institute. China congratulated Sri Lanka on its success in defeating the LTTE and reiterated China’s support towards maintaining her independence, territorial integrity and sovereignty. China has also provided crucial diplomatic support in the UN Security Council blocking efforts to put Sri Lanka on the Human Rights agenda.

China also boosted financial aid to Sri Lanka, as western countries reduced their contributions. China’s aid to Sri Lanka jumped from a few million dollars in 2005 to almost 1 billion Dollars in 2008 replacing Japan as the biggest foreign donor. By comparison the USA gave USD 7.4 millions and Britain just GBP 1.25 million. After the War, President Rajapakse turned to China for assistance as most western countries were also doing. China responded and help fund the economic revival of Sri Lanka.

China funded Mattala airport, Hambantota port, Moragahakanda reservoir, Norochcholai power plant, and many trunk roads.  Sri Lanka’s modern road complex with super highways were possible due mainly to China.  China also gave a 1.2.billion US dollar soft loan for housing and township construction.  It carried 2% interest with further concessions in form of interest free construction period and a five year grace period in which only the interest on the loan can be paid.  There is a further period of 20 years during which the loan can be paid off. Observers noted that China has never pushed a debtor to the edge of the cliff or bankruptcy, unlike those who relied on noncommercial borrowings from the west.

Sri Lanka  was made a dialogue partner of  Shanghai Cooperation Organisation (SCO) in 2009. The SCO was founded in 2001 in Shanghai by China, Russia, Kazakhstan, Kyrgyz Republic, Tajikistan, and Uzbekistan to deal with threats of terrorism, separatism and extremism. It is  a security body with ‘real military dimensions’. This puts Sri Lanka under the umbrella of China and Russia. Although it is not spelled out, under article 14 of the SCO charter   a dialogue partner can request protection and defensive aid under such as relationship, said former diplomat K. Godage. (REVISED 27.3.2017)

(  to be  continued)


  1. S.Gonsal Says:

    Please visit
    “” you too can be a miilioner soon.

    It says

    We are looking for these foreign agents of partners who have close connection with President, Prime Minister, Power or electricity Ministers, Governors, Finance Minister, or other Industrial Ministers to work with us for infrastructure projects on government-to-government financing basis. If you these connection, please contact us at: ——- for billions USD projects, you as our local agents or partners, we are EPC contractor and financing arranger/facilitator from China.

    Is this the way to advertise “good intentions” ?

    Also read carefully about their loans.

  2. Ananda-USA Says:

    Well said, Kamalika!

    I remember the Rubber-Rice pact with China and the vengeful response of the USA, very well.

    Since then, China has remained the TRUE & TRUSTED FRIEND of Sri Lanka, despite the INSULTS hurled at China by the Yamapalana IDIOTS!

    After insulting our TRUE FRIENDS, who gave us all the weapons we needed to defend our countrycountry against foreign-supported enemies, and defended Sri Lanka many times at the United Nations, the Yamapalana IDIOTS had to CRAWL on their KNEES to China to restore the Chinese Mega Projects.

    The Yamapalanaya still has not learned the LESSON yet, as demonstrated by the recent tiff between the Foreign Misistry and the Chinese Ambassador.

    We Patriots of Lanka say to our Chinese Friends, please be patient, we the Patriots of Lanka will soon regain control of our country, and will resume our cordial ancient relationship with China!

  3. Ananda-USA Says:

    Sinhala place names in ancient Jaffna

    July 1, 2016, 8:56 pm


    Place names in ancient Jaffna were Sinhala. The British administrators working in the Northern Province recognized this fact and said so in their reports. Henry Parker, an irrigation engineer, presented a series of Sessional Papers to the Legislative Council in 1886 on the subject of irrigation in the Northern Province. In addition to irrigation, he had also looked into the historical information available on the places he was working in. He found that Tamil place names had been substituted for the original Sinhala names. Maha Kachchatkodi tank was originally Tittaveli, Maha Iranpaikkulam was originally Rambewetiya, Iluppaikkadavai was Sallariya, Kuruntur maai was Piyangala and Kuruntankulam was Kurunegama.

    J.P. Lewis, of the Ceylon Civil Service, in 1896 presented a paper before the Royal Asiatic Society, Ceylon branch, titled ‘The place names in the Vanni ‘. He said Vanni was colonized by the Tamils only recently. The original Sinhalese inhabitants had been driven out and new Tamil place names given. Some place names were Tamilised versions of the original Sinhala names. Galkandamadu became Kallukondamadu. In Tamil ‘k’ is used for ‘ga’ and ‘ha’. Many of the Tamil names in the Vanni had their exact equivalents in Sinhalese villages. ‘Mandukoddai’ was Manadukanda, ‘Uhanda’ was Okanda. Lewis found heaps of Puliyankulams in the Vanni. Kulam is Tamil for tank. The original name of one such Puliyankulam was Siyabalagaswewa. ‘Vilankulam’ was earlier Diwulwewa. Sinhalese tended to name places after trees, plants or incidents connected to the place, said Lewis.

    B. Horsburgh published an essay on “Sinhalese place names in the Jaffna Peninsula”, in the Ceylon Antiquary and Literary Register, 1916. He said that the Sinhalese had earlier occupied the north portion of the mainland, which is now Tamil country. ‘There is ample evidence carried in stone all over Mannar and Mullaitivu district. In Jaffna the evidence is in the place names,’ he said. At least thirty of the place names in Jaffna were Sinhala in origin. He pointed out that Tamil place names which ended in ‘kalappu’, ‘vattei’, ‘palai’, ‘kam’, ‘pai’ and ‘vil’ were meaningless in Tamil. ‘Vil’ is bow in Tamil, ‘pai’ is net or sail. However the names made sense when they were seen as translation of Sinhala names. Valikamam and Vimankam have no meaning in Tamil but made sense as the Tamilised versions of Weligama and Vimangama. Chunnakam was Hunugama, Kokkuvil was Kokavila, Uduvil was Uduvila, Tanankalapu was Tanankalapuwa, Saravattai was Sarawatte and Manipai was Mampe.

    Horburgh’s views met with a favourable response. Rev. S. Gnana Prakasar and S.W. Coomaraswamy wrote to the Ceylon Antiquary agreeing with Horsburgh and giving their own lists of Tamilised place names. S. Sabaratnam partially agreed with Horsburgh. Rev. Gnana Prakasar listed more villages ending in ‘vil’ such as Kandavil and Inuvil. He drew attention to villages ending in ‘vattei’, such as Polvattei and Sittavattei, villages ending with ‘kumbura’ such as Markkamburei, villages using ‘yaya’ such as Moolay , ‘deniya’ as in Narandanei and ‘eliya’ as in Puloly. S.W. Coomaraswamy said Manipai was not Mampe but Mampaya and Sandituppay was probably Sandurupaya. J.P. Lewis gave Tamilised Sinhala place names from Mannar and Mullaitivu.

    Paul E. Pieris (1917) also observed that place names in Jaffna derived from Sinhala. He mentioned Valikamam (Weligama), Kodikaman (Godigamuwa), Kat pokkanari (Gal pokuna)and Udupiti (Udupitiya). He stated that the 1645 Jaffna Foral of the Portuguese used the word ‘gama’ to describe the lands in Vanni allotted to Tamils for cultivation. Godakumbura ( 1968) said Kantarodai was originally known as Kadurugoda. He thought that Chunnakam was not Hunugama, it could be Sulanagama from the Pali word Cullanagagama; Kannangara in his book Jaffna and the Sinhala heritage (1984) says Tisamalai was earlier Tissagama, Mallakam was Mallagama, Keerimalai was Mugatikanda and Puloli was Kaputota. Tellippalai was Telipola. He observed that the Sinhala Nam Pota mentions Telipola. Sinhala Nam Pota also gave the name Puvangu divaina to Pungudutivu. The place was also called Piyangudipa. Piyangudipa is mentioned in the Vallipuram gold plate which speaks of ‘Piyaguka tissa who built a monastery there…’ Kannangara observed that at ‘Gothamaluwa watta’ on Ponnali, on Point Pedro road, the name is still in original Sinhala.

    P.A.T. Gunasinghe said in The Tamils of Sri Lanka (1984) that place names like Polvattai refer to the Sinhala used in the 14th century. They showed that Jaffna was populated by Sinhalese in the medieval period. He added that in the east too, place names like Mattakalapu are direct borrowings from Sinhala. Madakalapuwa in Tamil is Chattakuli. Somapala Gunadheera (2011) pointed out that Omanthai is from Omatta.

    Present day commentators such as D.G.A. Perera also point out that many Sinhala names in the north and east have been Tamilised. The list includes Dambakolapatuna (Sambilturai), Gangahistota (Kankesanturai) Girikande (Keerimalai) Girinuwara (Mutur) Meenipitya (Manipai), Nagadeepa (Nainativu), Somapura (Sampur) and Udupitiya (Udippidi).

    The name given to Jaffna peninsula today is ‘Yalpanam.’ The origin of this name is given as a fanciful legend. Simon Casie Chetty in Tamil Plutarch (1859) says Yalapana Nayanar, a blind minstrel came to the peninsula, having had a quarrel with his wife in Tamilnadu. The Tamil king was pleased with his playing and gave him a piece of land which turned out to be the Jaffna peninsula. The peninsula was uninhabited. Yalpana nayar cleared it and brought down a colony of Tamils to settle in it and called it Yalapana nadu. The Skanda Purana gives a different story. It says that the king, pleased with the playing of a musician named Susangita , gave him the name Yalpana since he was always with a lute in his hand. Susangita cleared the land he was given, established a settlement and called it Yalpanam. (Denham 1911 p 71)

    Horsburgh dismissed the legend as pure myth, saying it had no historical foundation whatever. He though that ‘Yapana’ had come from ‘Yapa’ which was a good Sinhala word and ‘na’ was used as an ending as in Habarana. ‘Yalpanam’ he thought was a later elaboration. E.T.Kannangara said that Yapane would have come from Yapapatuna, which means ‘town of the crown prince.’ Yapane, according to this, is not a name at all, it is a description.

    Paul E Pieris stumbled on the correct ancient name for Jaffna, while researching the Buddhist ruins of Jaffna. He wanted to find out the location of Nagadipa. According to the Mahavamsa the second visit of Gautama Buddha was to Nagadipa. The main embarkation point to north India in ancient times was Jambukola in ‘Nagadipa’. From Jambukola it took seven days to get to Tamralipti, a port at the mouth of the Ganges. Jambukola therefore had to be in the Jaffna peninsula. Pieris concluded that the name given to the Jaffna peninsula and its islands was ‘Nagadipa’.

    Pieris read a paper before the Royal Asiatic Society, Ceylon Branch, saying that ‘Nagadipa’ was the name given to the Jaffna peninsula and its islands. John M Senaveratne present at the talk said that Pieris has ‘confirmed for us what was for long suspected and indicated’ by B. Horsburgh and J. P. Lewis that Jaffna was a part of the ancient Sinhala Buddhist civilization. The paper was published as ‘Nagadipa and Buddhist remains in Jaffna’ (1917). The Vallipuram gold plate, found around 1936, settled the matter. It confirmed that ‘Nakadiva’ was the ancient name for Jaffna. In 1968 C.E. Godakumbura reiterated, through the Journal of the Royal Asiatic Society , Ceylon Branch, that the ancient name for Jaffna peninsula was Nagadipa.

Leave a Reply

You must be logged in to post a comment.



Copyright © 2018 All Rights Reserved. Powered by Wordpress