Sri Lanka, China Revive Trade Talks Amid Economic Challenges

Colombo, Sri Lanka — A long-delayed free-trade agreement (FTA) between Sri Lanka and China is back on the agenda, despite analysts warning that the crisis-stricken nation may not see significant benefits for years after the deal is implemented.

Sri Lankan officials express cautious optimism that the FTA could help reduce the country’s substantial trade deficit with China. The agreement was first proposed in 2014, but talks have stalled for the past six years due to disagreements over terms.

Last week, during the Sri Lanka–China Trade and Investment Forum in Colombo, Chinese Commerce Minister Wang Wentao called for a comprehensive FTA to be finalized “in one package.” He emphasized that negotiations should be grounded in “mutual benefit.”

Wang’s comments follow a January visit to Beijing by Sri Lankan President Anura Kumara Dissanayake, where he met with President Xi Jinping and other Chinese leaders to discuss strengthening bilateral relations across various sectors. During the visit, China pledged to assist Sri Lanka’s economic development and enhance cooperation in the Belt and Road Initiative.

Among the Belt and Road projects China has funded in Sri Lanka are the Mattala Rajapaksa International Airport, the Hambantota International Port, and the Port City Colombo. These ventures underline China’s commitment to expanding its influence and investments in the region.