Summary of Ambassador Cheng Xueyuan’s Remarks at the Dialogue on the China-Sri Lanka Pragmatic Cooperation
Posted on November 2nd, 2019

(29 October 2019, Lotus Tower Colombo) (Informal Translation)

I. The hard-earned achievement made by the People’s Republic of China during the past seven decades lays an important foundation for China-Sri Lanka relations to grow stronger

This year marks the 70th anniversary of the establishment of People’s Republic of China, which is a fundamental moment and a great chapter in human history. 70 years after 1949, China has become the second largest economy, largest industrial country, ranking first in terms of trade volume and foreign exchange deposit. China’s GDP has grown by 175 times at an annual rate of over 8%, GDP per capita increasing from 119 yuan in 1949 to 65,000 yuan in 2018. Urban population proportion grows from 10% to 60%. 700 million people, which made up 70% poor people worldwide, have been lifted out of poverty. The incidence of poverty has dropped to less than 2% from 98%, creating a miracle in poverty alleviation history. The life expectancy has also been prolonged from 35 to 77 years old. 

It’s believed that China becomes increasingly important for the international society. China’s development cannot be separated from the world and the world’s progress needs China. From closed-door policy to opening-up in all dimensions, China contributes 18% annually to world economic growth. The Belt and Road Initiative(BRI) proposed by President Xi Jinping, have gained extensive support from over 160 countries, regions and international organizations. China insists on supporting free trade and multilateralism while fighting against protectionism and unilateralism. The steps of reform will become steadier and China will open even wider. The BRI development will be shared to more countries. In the next five years, China will introduce products and service worth over 10 trillion US dollars. The total outward investment volume will increase to 750 billion US dollars, outbound tourists to 700 million, which means a significant opportunity for Sri Lanka and the world as a whole to further develop.

II. Despite the complicated and ever-changing international economic situation, China’s economy in 2019 still maintains great momentum

1. Overall economic stability. In the first 3 quarters, China achieved overall economic stability at an increase rate of 6.2%, ranking fastest in terms of world trillion dollar economies. Various index shows that the healthy and stable foundation of China’s economic growth has not changed.

2. Stable employment. Unemployment rate in September is only 5.2%. In the first 3 quarters, the number of newly employment has reached 10million, a completion of 99.7% of the annual goal.

3. Better business environment. Distribution service” reform has been deepened and people are encouraged to do business creatively and drive innovation altogether. From January to September, 19,900 enterprises get registered daily.

4. The strong domestic market potential. From January to September, total retail sales of consumer goods has increased by 8.2% and domestic demand has contributed more than 80% to China’s economic growth.

5. Stronger Neo-Engines. In the first three quarters, the value-added of high-tech manufacturing increased by 8.7%, investment in the industry by 12.6%.

6. New achievement in opening-up. In the first three quarters, the import and export volume between China, and ASEAN, EU, BRI countries has increased by 11.5%, 8.6% and 9.5% respectively.

III. China-Sri Lanka relations are in the best period of history.

China and Sri Lanka are good neighbors, good friends and good partners. The past seven decades also witness the development of our bilateral relations, which has been renewed and pushed forward steadily and smoothly, developing even better under the guidance of BRI and entering into a rising period in history. China has become the largest partner to Sri Lanka in terms of foreign investment, contracting construction, tourist volume, and foreign aid. China-Sri Lanka friendship and cooperation is gradually becoming a cross-political party, cross-nationality consensus.

The tradition of mutual support” further push forward the China-Sri Lanka pragmatic cooperation. In the past six months, China has responded to all kinds of emergency requests and provided the biggest assistance to Sri Lanka in a fast and efficient way, which was called Chinese Speed” and Chinese Determination”. Within one week after the incident, the Red Cross of China provided over 18 million rupees of cash aid. Within two weeks, China donated 10 police jeeps. Till last month, the Chinese government has already provided emergency security equipment valued about 2 billion rupees to Sri Lankan Police, Parliament and government. Besides, China also gifted a frigate to Sri Lankan Navy and invited dozens of senior officers to China for security training. Last Saturday, China donated 10 million rupees to April 21st orphans at the musical extravaganza A Ray of Hope” organized by the Attorney General’s Department.

IV. Some facts about China-Sri Lanka economic relations

  1. The Chinese government has provided essential capital aid for Sri Lanka’s socio-economic development.

    China is a most significant partner and largest foreign investor for Sri Lanka. After the civil war, the Sri Lanka government is in a desperate need to get foreign resources to re-establish the country and develop its economy. China, as a sincere friend and neighbor, offered the financial assistance that Sri Lanka need the most. All the loans from China are offered only after scientific assessment, and only at the request of the Sri Lankan government and the enterprises.

According to the annual report of Sri Lanka Central Bank and Ministry of Finance, by the end of 2018, the total foreign debt volume is about 52 billion US dollars, 6 billion of which is from China, making up only 11.5%. More importantly, 60% of those 6 billion are preferential loans, with interest rate far lower than the market average level, which means the repayment pressure is, in fact, mainly from the ISB issued by western countries. In many cases, Sri Lanka government are using low interest rate loans from China to repay the ones of much higher rate from western countries. China is not setting up, but instead helping Sri Lanka out of debt trap”.

Loans from China are mostly used on ports, roads, and water conservancy projects that matter to people’s livelihood, meeting the desperate need of Sri Lanka’s socio-economic development. The cooperation projects and loans from China have largely helped improve the infrastructure construction, thus promoting the economic progress, improving livelihood and providing more power for Sri Lanka’s future development. Needless to say, the so-called debt trap” is just another fake news fabricated by the western media. And their only purpose might only be containing the common development of China and other developing countries.

2. The nature of China-Sri Lanka pragmatic cooperation is mutual-benefit and win-win outcome. Take Norochchorlai Power Station as a good example. It provides  nearly 50% grid electricity for Sri Lanka, helps solve the power shortage problem, ensures the stable supply of electricity and makes the average electricity price drop by 25%. Both Sri Lanka people and the nation have benefited from the power station.

  • China-Sri Lanka pragmatic cooperation brings huge employment opportunities but not the opposite. It also helps train skilled youths that Sri Lanka needs the most in the future.

According to incomplete statistics, the bilateral cooperation has created over 100,000 employment opportunities and helped train over 10,000 technical and management talents, laying a solid soft power” foundation for Sri Lanka’s own development.

The China State Construction Engineering Corporation Limited (CSCEC) directly employs more than 30 Sri Lankan managers and more than 2,000 workers. In Hambantota, CSCEC also built a safety training and vocational center for local residents. The center covers an area of 2,000 square meters and has 12 safety excise projects and 6 vocational training programs, enabling many local residents pass the training and assessment, and obtain a vocational skills certificate.

In the years to come, the Port City Colombo will create another 83,000 jobs for Sri Lanka.

4. China-Sri Lanka pragmatic cooperation prioritizes the pursuit of advanced technology, standardization and environmental protection

5. Chinese companies and Joint Projects are performing social responsibilities and doing charities.

6. China-Sri Lanka pragmatic cooperation will never harm Sri Lanka sovereignty and security.

Some western media have been hyping up that China is planning to build military base” by constructing and operating ports and airports, which cannot be more absurd. President Maithripala Sirisena, Prime Minister Ranil Wickremesinghe, Speaker Karu Jayasuriya and Former president Mahinda Rajapaksa have all stood up criticizing those claims.

In history, China suffered from imperialism and colonialism. China extremely values its sovereign independence and territorial integrity, opposes any external interference, and never violates the sovereignty and territory of other countries. Some external forces, under the banner of “democracy”, have arbitrarily accused China of militarization while they are trying to do it secretly . It is believed that the Sri Lankan government and people will have fair judgments.

V. Suggestions on the next step of China-Sri Lanka’s pragmatic cooperation:

1. We should jointly promote the administrative and legislative bodies of Sri Lanka, accelerate the completion of relevant legal framework and policies with reference to international experience, create a more favorable environment for attracting foreign investment, and help the mega-projects to bear fruit as soon as possible.

2. We must earnestly respect the legal validity and commercial credibility of the contracts, maintain a stable policy, and ensure that pragmatic cooperation, especially mega-projects cooperation, will not be affected by changes of government.

  • The media and academic institutes of the two countries must earnestly exert their social responsibilities, avoid copying third-party fake news and deliberate speculation, have field-study on the relevant cooperation, conduct objective and fair research, and provide good advice and suggestions to the two governments and the business community. Only by doing this, could the general public have a more accurate and rational understanding of China-Sri Lanka pragmatic cooperation.

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