{"id":64642,"date":"2017-03-27T12:11:16","date_gmt":"2017-03-27T19:11:16","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=64642"},"modified":"2019-03-20T15:48:52","modified_gmt":"2019-03-20T22:48:52","slug":"the-repulic-of-china-and-contemporary-sri-lanka-1-2","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2017\/03\/27\/the-repulic-of-china-and-contemporary-sri-lanka-1-2\/","title":{"rendered":"THE REPUBLIC OF CHINA AND CONTEMPORARY SRI LANKA Part 1"},"content":{"rendered":"

KAMALIKA\u00a0 PIERIS<\/em><\/span><\/h2>\n\n\n

REVISED\n27.3.17, 17.3.19 <\/strong><\/p>\n\n\n\n

Sri Lanka has had cordial links with China from ancient times. The\nSinhala kings had continuous diplomatic links with the Chinese emperors, from\nAnuradhapura times to the medieval period. In the post independence period too,\nthere were good relations between the two countries. The Peoples Republic of\nChina was established in October 1, 1949 and Sri Lanka recognised it soon after\non January 6, 1950.  Then came the Ceylon-China\ntrade agreement of 1952, known as the \u2018Rubber – Rice pact\u2019.   J.B.Kelegama said that this Pact was\nundoubtedly the most useful trade agreement negotiated by Sri Lanka and one of\nthe most successful and durable trade agreements in the world, having been in\noperation for thirty years.<\/p>\n\n\n\n

 Rohan de Soysa recalls that\nhis father Terence de Soysa had with the help of a consortium bought C.W.\nMackie & Co in 1946 or so, the first major British company to be\nCeylonised. He had come to office one morning and found a telex on his desk\nfrom a Hong Kong agent offering to pay more than the market price if he would\nship rubber to China. The other rubber producing countries were refusing\nto do so. Ceylon also was a friend of America so my father was in a quandary.\u201d<\/p>\n\n\n\n

Having ascertained it was not a joke; he met Prime Minister D.S.\nSenanayake, and asked him what action to take as China was at war with America\nin Korea.  D.S. had asked him, is it good for our\ncountry?” Upon being told it was very good, D.S. told him to go\nahead. After making the first shipment, my father called a meeting of all the\nrubber shippers, and informed them of the situation. He proposed to divide the\nshipments among all of them according to their percentage of shipments abroad\nin the previous year, reserving a slightly higher percentage for Mackie &\nCo, to which all agreed. This was the foundation stone of the Rubber-Rice pact\u201d\nconcluded Rohan. <\/p>\n\n\n\n

In the 1950s there was a rice shortage in Sri Lanka. The price of\nrice in the world market was high and Sri Lanka, then Ceylon, did not have the\nmoney to buy. Sri Lanka was facing a serious foreign exchange crisis at the\ntime too. The rubber boom had ended with the  \nKorean War and the rubber price had crashed.   \u2018Communist\u2019 China was also having its own\ntroubles. UN had imposed a resolution prohibiting countries like Malaya\nexporting their natural rubber to China.  <\/p>\n\n\n\n

R.G. Senanayake, Minister of Trade and Commerce   found that China was willing to sell rice to\nSri Lanka in   exchange for rubber. This\nwas probably conveyed through Susanta de Fonseka, Ceylon\u2019s ambassador to\nBurma.  Susanta de Fonseka has been sent\nto Beijing in 1952 by Prime Minister D.S.Senanayake on an \u2018important diplomatic\nassignment \u2018which, we are told led to the Rubber-Rice pact. \u2019 Fonseka led the\nsecond delegation and was part of the first delegation to Beijing to discuss\nthe   agreement.<\/p>\n\n\n\n

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

The Sri Lanka China Friendship Association said that it too had\nplayed a role in the Rubber Rice Pact. A \nSri Lanka – China Friendship Union was set up during the latter part of\n1950. This was revived in 1952 as China- Sri Lanka Friendship Association. With\nthe support of the Ceylon Trade Union Federation and the Ceylon Communist Party,\nthe Association started a campaign to persuade the Government to enter into a\ntrade agreement with China. They were supported by several Buddhist monks,\nUdakendawela Saranankara, Narawala Dhammaratana, Bambarande Siri Sivali,\nNattandiya Pannalankara, and B. Narada. The Association   held public meetings and wrote articles to\nthe papers. Udakendawala Saranankara published a special issue of his very\npopular magazine \u2018Nawalokaya\u2019 asking for a rubber rice pact. (Daily News\n10.7.12. supplement p 26).<\/p>\n\n\n\n

The Pact came into force in 1953. This was the first trade\nagreement that China had signed with a country outside the socialist bloc,\nobserved analysts. China agreed to pay a premium price for rubber well over the\nworld market price.  China bought rubber\nat Rs 1.74 per pound when the average world market price was Rs 1.05 per lb.\nChina also paid the handling charges for the rubber in Colombo. China supplied\nrice at Rs 720 per ton, well below the market price.  In Sri Lanka, Senanayake reserved the export\nof rubber to China and the import of rice to Ceylon, exclusively for Ceylonese\ntraders. The foreign traders, particularly the British managed agency houses\nstrongly objected. <\/p>\n\n\n\n

China was a generous trade partner. On one occasion when China\ncould not provide rice, it had sent rice purchased from Burma, at the price\npaid to Burma. \u2018Not a cent more though they were entitled to add value.\u2019  From  \n1958 to     1968 China gave a\ngrant of Rs 125 million to meet part of the cost of rubber replanting.\nThousands of acres of uneconomic rubber land were replanted thereby\nrevitalising our rubber industry, said Kelegama. <\/p>\n\n\n\n

\u2018China was large minded and forthright in their dealings, said\nSenanayake in Parliament.  There was no\nbargaining and haggling on small points. Kelegama who had participated in later\ndealings with China   agreed.  China bought our rubber at a premium even\nwhen other countries were prepared to sell for less, during the long period of\nthis agreement, he said.   Sri Lanka\ntherefore had an assured market for its rubber and an assured source of supply\nfor her rice and this helped insure her from the vagaries of the world market.\n <\/p>\n\n\n\n

This Pact was heavily opposed by some members of Parliament,\nincluding J.R. Jayewardene, Minister of Finance. Newspapers virulently opposed\nto any dealings with Communist China joined in. This opposition is given in\ndetail in S.P. Amarasingham\u2019s \u2018Rice and Rubber, the story of China- Ceylon\ntrade \u2018. <\/p>\n\n\n\n

The Pact was greeted with considerable dismay in the US. USA\npromptly cut off aid to Sri Lanka, under its rule of not giving aid to\ncountries that sold strategic materials to communist countries. USA also stopped\nthe sale of its sulphur fungicide, needed by Sri Lanka rubber plantations.  Sri Lanka came under great pressure. But the\nPact was not abrogated. This showed, said Kelegama, Sri Lanka\u2019s independent\nattitude to external relations and her capacity to withstand pressure from\nwestern powers. The Pact was renewed every five years, in 1958, 1962, 1967,\n1972 and 1977. It was wound up thereafter as it was no longer needed.    <\/p>\n\n\n\n

Bandu de Silva, of the Foreign Service, recalled that attempts\nwere   made by certain parties in Colombo\nto sabotage the   Pact when it came up\nfor renewal in 1957. The prominent name was J.R. Jayewardene. Secret\ncommunications sent by the Ceylonese delegation to Colombo appeared in the\nColombo press and it was suspected that the source was “Yankee Dickie”.\n<\/p>\n\n\n\n

 In the meantime, Ceylon\u2019s\nambassador Wilmot Perera it appears had advised the Chinese not to pay the\npremium charge of five US cents per pound as handling charges for the rubber. Negotiations\nnearly broke down because of this, but China offered foreign aid in place of\nthe premium, despite China not being in a position to such aid. Sri Lanka then\nasked for railway wagons, but China did not rush to provide them. In 1967 Sri\nLanka had wanted to join ASEAN, but the Pact was an obstacle.  Prime Minister Dudley Senanayake decided to\nrenew the pact and forget ASEAN. <\/p>\n\n\n\n

Sri Lanka has long since forgotten this Pact, but, fortunately for\nSri Lanka, China has not. China remains forever grateful to Sri Lanka for\ngiving it rubber when other countries, particularly Malaysia had refused to do\nso. Sri Lanka signed the rubber rice\nagreement with China in 1952 rejecting strong opposition by US. A grateful China\nhas remained Sri Lanka\u2019s most dependable and valuable ally thereafter, noted\nanalysts.  In 1964 when N.M. Perera,\nMinister of Finance asked China for money, China said it had no money to give\nbut \u2018when China becomes a fully developed rich country we will gave you all you\nneed\u2019. <\/p>\n\n\n\n

There is a recurring\npattern in China- Sri Lanka relations. Relations deteriorated whenever there was\na UNP regime. At the Bandung conference, 1955, the brief encounter between Chou\nen Lai and Sir John was not at all friendly.   Relations\nwith China   were good whenever SLFP was\nin power. <\/p>\n\n\n\n

In 1957,\nPrime Minister S.W.R.D. Bandaranaike established full diplomatic relations with\nChina. Wilmot Perera, who had accepted the ambassadorship for a brief period to\nplease SWRD, established good relations with Chairman Mao, Prime Minister Chou\nen Lai   and other leaders.  He had good relations with Vice President Liu\nShao Chi, vice Premier Marshal Ho Lugn, Muo Mo Jo who was a leading cultural\nfigure at the time and Pen Zhen who had much influence in the Communist\nParty.  Chou en Lai   and Ho Lung were guests when Perera gave a\ndinner in honor of a visiting LSSP delegation. <\/p>\n\n\n\n

Chou en Lai\nvisited Sri Lanka in 1957 itself, followed soon after by the Beijing Opera. Chou\nen Lai had special regard for small countries \n and had asked the Beijing Foreign\nLanguage Institute to study the languages of small countries. China sent persons to the University of\nCeylon at Peradeniya, to learn Sinhala and Sinhala was introduced as subject at\nBeijing. Subsequently, a Sinhala department was created in the University of\nShanghai and a Sinhala broadcasting service   \nwas started at Beijing. <\/p>\n\n\n\n

Madame Soong\nChing Ling vice chairman of Republic of China came and gave a talk at Sri\nPalee, Horana on February 1962.  N .Q. Dias, then Permanent Secretary of\nDefense and Foreign affairs had foreseen the need to seek out China as a\ncountervailing power against India, said Neville Jayaweera. He sent Mrs. Bandaranaike on a goodwill mission to China\nin 1964. She played the role of effective mediator whenever friction\narose between China and India and both countries accepted her mediation. When\nSri Lanka nationalized oil, World Bank  and USA cut off aid, China stepped in. In May\n1964 China went to the extent of waiving all the interest on all loans given to\nSri Lanka.<\/p>\n\n\n\n

In 1986,\nPresident Li Xiannian paid a visit.  Chinese\nPremier Li<\/em> Peng visited in 1990<\/em>  and\noffered Rs 375 million in economic assistance.\nChinese Premier Zhu Rongji paid a three-day official visit to Sri Lanka\nin 1996. The two sides agreed to further develop friendly and cooperative\nrelations and signed an agreement on economic and technological cooperation. <\/p>\n\n\n\n

Chinese Premier Wen Jiabao visited in 2005 and the \u2018China-Sri\nLanka All-round Cooperation Partnership of Sincere Mutual Support and\nEver-lasting Friendship\u2019 was signed. In 2007, President Mahinda Rajapaksa went\nto China and 8 bilateral agreements were signed. Several high level delegations from China\nvisited Sri Lanka thereafter.  Most Ven.\nShri Cheng president of the Buddhist Association of China led a 100 member\nBuddhist delegation to Sri Lanka at the invitation of the Dalada Maligawa\nofficials in 2007. <\/p>\n\n\n\n

On May 2013, Rajapaksa paid a four-day state visit to China at the\ninvitation of Chinese President Xi Jinping. The\nrelationship between the two countries was upgraded to \u2018China-Sri Lanka\nStrategic Cooperative Partnership of Sincere Mutual Support and Ever-lasting\nFriendship.\u2019 In May 2014, Xi   met\nRajapaksa in Shanghai on the sidelines of a summit of the Conference on\nInteraction and Confidence Building Measures in Asia.  <\/p>\n\n\n\n

Sri Lanka\nsupported China in international issues. In 1971 Sri Lanka co-sponsored the\nresolution to restore China\u2019s legitimate seat at the UN.  Sri Lanka also supported China\u2019s entry into\nWorld Trade Organization in 2001 and the candidacy of Margaret Chang as\nDirector General of World Health Organization in 2006.  Sri Lanka has throughout supported China\u2019s\n\u2018One China\u201d policy on Taiwan, as well as Chinese policy on Tibet. China\nappreciated this. Only China condemned India when India violated Sri Lanka air\nspace in 1987.    China   had always supported Sri Lanka at UN and UNHRC. <\/p>\n\n\n\n

The positive\nbenefits of this Ceylon-China agreement exceeded expectation, observed\nKelegama. In addition to trade, China gave grants and interest free loans. China\ngifted the textile mills at Veyangoda and Pugoda, helped the Gin Ganga\nscheme,   restoration of Abhayagiri\nDagoba and renovated the Supreme Court complex. The Bandaranaike Memorial\nConference Hall (1973) was an outright gift. China said it wanted to give Sri\nLanka a gift and Prime Minister Sirimavo Bandaranaike asked for a conference\nhall. <\/p>\n\n\n\n

It was China\nthat helped Sri Lanka to enter into a shipping service, said analysts. Sri\nLanka found it difficult to acquire its own fleet of vessels due to foreign\nexchange problems. China helped by providing two ships backed by an interest\nfree loan with a five year grace period. \nI was not able to obtain any further information on this, including\ndates and names of ships. <\/p>\n\n\n\n

China also boosted financial aid to Sri Lanka, as western\ncountries reduced their contributions. China\u2019s\naid to Sri Lanka jumped from a few million dollars in 2005 to almost 1 billion\nDollars in 2008 replacing Japan as the biggest foreign donor. By comparison the\nUSA gave USD 7.4 millions and Britain just GBP 1.25 million. Saman Kelegama said in 2007 that China is\namong the first ten donors to Sri Lanka. ADB and JAIC and WB are the first\nthree.  No other county could match the\nlevel of assistance China has provided to Sri Lanka.<\/p>\n\n\n\n

China gave military equipment in huge quantities for the Eelam\nWar, including aircraft, T56 assault rifles, RPGs, naval vessels, vehicles\nincluding wheeled workshops, and armour. They were sold to us at very nominal\nprice barely covering the cost of production. In\nApril 2007 Sri Lanka signed a classified USD 37.6 million deal to buy Chinese\nammunitions and ordnance for its army and navy according to Janes Defence Weekly<\/em>. China gave Sri\nLanka, apparently free of charge, six F7 jet fighters, according to Stockholm\nInternational Peace Research Institute. <\/p>\n\n\n\n

China congratulated Sri Lanka on its success in defeating the LTTE\nand reiterated China\u2019s support towards maintaining her independence,\nterritorial integrity and sovereignty. China has also provided crucial\ndiplomatic support in the UN Security Council blocking efforts to put Sri Lanka\non the Human Rights agenda. China critiqued India\u2019s parippu drop. <\/p>\n\n\n\n

After\nthe War, President Rajapaksa turned to China for assistance as most western\ncountries were also doing. China responded and help fund the economic revival\nof Sri Lanka., China funded Mattala airport, Hambantota port, Moragahakanda\nreservoir, Norochcholai power plant, and many trunk roads.  Sri Lanka\u2019s modern road complex with super\nhighways were possible due mainly to China. \nChina also gave a 1.2.billion US dollar soft loan for housing and\ntownship construction.  It carried 2%\ninterest with further concessions in form of interest free construction period\nand a five year grace period in which only the interest on the loan can be\npaid.  There is a further period of 20\nyears during which the loan can be paid off. Observers noted that China has\nnever pushed a debtor to the edge of the cliff or bankruptcy, unlike those who\nrelied on noncommercial borrowings from the west. <\/p>\n\n\n\n

Sri Lanka was made a dialogue partner of Shanghai Cooperation\nOrganisation (SCO) in 2009. The SCO was founded in 2001 in Shanghai<\/a> by China, Russia, Kazakhstan<\/a>, Kyrgyz Republic<\/a>, Tajikistan<\/a>, and Uzbekistan<\/a> to deal with\nthreats of terrorism<\/a>, separatism<\/a> and extremism<\/a>. It is a security body with \u2018real military dimensions\u2019. This puts\nSri Lanka under the umbrella of China and Russia. Although it is not spelled\nout, under article 14 of the SCO charter  \na dialogue partner can request protection and defensive aid under such\nas relationship, said former diplomat K. Godage. <\/p>\n\n\n\n

The\nrelationship between Sri Lanka and China is a unique one. It is friendship and\ncooperation of 2 countries of unequal size and power said analysts. China- Sri Lanka is a model relationship for\nrelations between big power and small countries. <\/p>\n\n\n\n

China has pointed out the advantages of this relationship. Western\ncountries when they provide assistance to develop countries, attach     some critical considerations to the\nassistance without considering whether these conditions are suitable for\nstability or welfare.  China\u2019s assistance\non the other hand is consistent with the needs of the Sri Lanka people, said\nChina. <\/p>\n\n\n\n

China stresses humanitarian aspects rather than the western\napproach of rights. China is interested in promoting a harmonious world. The\nidea of harmony is at the core of China culture, as in Confucius. And that\nincludes harmonious foreign relations. Chinese policy towards regional cooperation\nnever seeks dominance in a regional context. This is a principle of its foreign\npolicy. China emphasis equality in cooperation in a regional context. (continued)<\/p>\n","protected":false},"excerpt":{"rendered":"

KAMALIKA\u00a0 PIERIS REVISED 27.3.17, 17.3.19 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 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[104],"tags":[],"class_list":["post-64642","post","type-post","status-publish","format-standard","hentry","category-kamalika-pieris"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/64642","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=64642"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/64642\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=64642"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=64642"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=64642"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}