No strings attached to Sino-Lanka ties – Dr. Palitha Kohona | Sunday Observer

No strings attached to Sino-Lanka ties – Dr. Palitha Kohona

30 January, 2022

Sri Lanka’s Ambassador to China Dr. Palitha Kohona in an interview with the Sunday Observer explains where the ‘strong and warm’ bi-lateral relations between Sri Lanka and China are heading in the future, on the eve of 65th anniversary of establishing Sino-Lanka diplomatic relations.

Dr. Kohona said Sri Lanka’s territorial integrity has not been a bargaining chip on the table for Chinese development assistance. 

Q: This year marks 65 years of diplomatic relations between Sri Lanka and China and the 70th anniversary of signing the China - Ceylon Rubber-Rice Pact. What is unique and important about our relations with China?  

A: I would not use the expression unique, when describing the relationship with China. I would say the relationship is extremely strong. And it has been built upon a solid foundation.

Sri Lanka’s relationship with China goes back 2000 years. In the distant past many traders voyagers, bhikkhus came to Sri Lanka from China, and Sri Lankan bhikkhus, bhikkunis, princesses and traders voyaged to China by sea. Famous voyager Admiral Zheng He visited Sri Lanka thrice. He left a stone pillar in Galle, commemorating his visit. The Chinese bhikkhu Fa-hsien came to Sri Lanka much earlier and lived in Anuradhapura for two years. The copious notes of his experiences in Sri Lanka, help us to gain an understanding of the society at the time.

Sri Lanka was one of the first countries to recognise the new People’s Republic in 1950. Diplomatic relations between the two countries were established in February 1957. In 1952, we breached an embargo imposed on China, by Western countries and agreed to sell rubber to China in exchange for rice. We were not a member of the United Nations at the time, like China.

When we were struggling desperately against a terrorist group, China came to our aid in a big way. It could be even said that Sri Lanka may not have been able to defeat the terrorist threat in 2009 if not for the assistance provided by China. The assistance was mainly in the form of military hardware.

Later when we were desperately trying to fast-track our post-war economic development, our traditional friends were not ready to offer the kind of help we needed. The Chinese funding assisted us to complete many major infrastructure projects including highways, airports and sea ports.

More recently when the pandemic affected us and was threatening to spin out of control, China provided us with 27 million doses of Sinopharm vaccine. Three million were given as a gift. It is not an exaggeration to say that Sri Lanka has managed to control the pandemic to this extent largely because of the Chinese vaccine. Over 72 percent of the Sri Lankans are now vaccinated. 

We have to remember that China is the second biggest economy in the world after the US. It›s estimated by the World Bank that China will become the biggest economy by 2028. It is also the biggest source of Foreign Direct Investment (FDI) in the world today. Close to US $ 150 billion flows out of China by way of FDI every year. Similarly, China is also the biggest magnet for FDI in the world, having surpassed the US last year.

China was also the biggest source of tourists prior to the pandemic. Over 169 million Chinese travel to other countries every year. In a political sense and an economic sense, China is going to be a very important player in our region and the Government of Sri Lanka recognises this. The leaders of the two countries have been in communication with each other on the phone recently. We have had the visits of Defence Minister Wei Fenghe last year and Foreign Minister Wang Yi early this month.

Q: Where do Sri Lanka, a relatively small nation, stand in China’s trajectory of diplomacy - are we as important for them as they are for us? 

A: The challenge for our diplomacy is to make Sri Lanka important for China. It is a huge country. It is now a modern country with enormous resources. We need to make every opportunity to highlight Sri Lanka in the Chinese media. That is the reason why over the past few months the Sri Lanka’s mission in China had been conducting a vigorous campaign to raise awareness on Sri Lanka. We encouraged film producers to feature Sri Lanka. I have been on television promoting our country. I have visited 14 provinces meeting the Governors, Deputy Governors and Mayors to make Sri Lanka more prominent.

Q: Is Sri Lanka a favoured destination for Chinese tourists?

A: I discovered after coming to China that awareness on Sri Lanka among Chinese citizens is very limited. While Thailand has received 26 million Chinese tourists in 2019, Singapore 4.5 million and Australia 2.5 million, Sri Lanka received 265,000 tourists in 2018.

Q: What are the bi-lateral investment and tourism sector projections for 2022?

A: We have been talking to many Chinese companies on investment prospects of the Colombo Port City and the industrial processing zone near Hambantota harbour on manufacturing, assembling and even transshipment projects. There is a degree of interest. Our location in the Indian ocean is the main attraction, but we need to work at it more.

Awareness is being made on higher education levels of our people, favourable tax structures, welcoming investment climate and the Government which is committed to bringing in many foreign direct investments. 

As a result of our vigorous campaigning, enthusiasm to visit Sri Lanka has risen. The Chinese, at the moment, are suffering from a pent up urge to travel, after two years of pandemic restrictions. Our goal is to make Sri Lank high on their agenda, as a destination for travelling. We have requested the Chinese government that Sri Lanka be designated as a preferred destination once the travel restrictions are relaxed.

We have spoken to some top Chinese travel groups such as Caissa, China International Travel Services and Shanghai Travel Bureau. These have a client base running into millions. They have promised us that they are capable of sending more than a million tourists per year to Sri Lanka.

Q: Is that our target?

A: Our target is much more. If Thailand can get much more, we should too. But this will be the immediate aim. We need to train more Chinese language proficient guides. The average Chinese does not care about English. We need guides who are familiar with historical sites. The Chinese are different from European tourists who like to relax on a beach. The Chinese want to learn about the places they travel to. We need to cater to that. The hospitality trade must focus more on Chinese tourists.

Q: The observers say Sri Lanka had been impressive in their balancing act between India and China, in addressing post pandemic economic challenges? 

A: I would not call it a balancing act. India is an old friend which had been with us for thousands of years. Our ancestors arrived from India. Our religion and our culture came largely from India. Working effectively with India is essential. We need to be sensitive about India’s needs, and concerns. It has come to our aid when we needed assistance. 

As I explained earlier, we have a very long relationship with China. We turned to them during the battle against terrorism and later for post war development and now when facing a deadly pandemic. China has readily come to our assistance. I don’t think this should be characterised as a balancing act. Friendships have their own rewards; bi-lateral relations should not be based on self interest alone.

Q: Any new major development projects envisaged jointly with China?

A: A number of highrise building projects in Colombo, mainly for residential purposes, is in the offing. They are not development projects. The investors are ready to begin the projects within the next two years. But approvals from Colombo are yet to be finalised. A major Chinese steel company is also keen on starting a plant in Hambantota.

A number of Chinese private companies has expressed desire to get involved in renewable energy programs of the Government. If these projects were implemented earlier, we would not have power cuts today. The whole is heading towards renewable energy at a breakneck pace, and I think we should take a cue from them. By 2030, 70 percent of our energy needs will come from renewable energy. By 2060 we will be carbon neutral. Sri Lanka has made that commitment. We need to head that direction.

Q: There is talk of a 100 acre Port City being planned in Galle. Is this funded by the Chinese?

A: The details of this project are not known yet. It is still at the planning stage. It is not a port city per se. It is a port to house cruise liners. I haven’t seen the name of any Chinese company associated with it at this stage.

Q: China has been a lifeline for the Government which is trying to overcome a US $ crisis triggered by the Covid-19 pandemic. But critics say the Chinese loans will be of no use since we can use the credit to buy only Chinese products. Your comments?

A: No country offers credit in a manner to boost the economy of a third party. This is the reality of the current world. It applies across the board.  This is almost a naive comment. 

Q: China is an emerging ‘world super power’, embroiled in a battle for supremacy with other super powers. Thus, aren’t we unnecessarily putting our country in jeopardy by getting too close to China?

A: China is the second biggest economy in the world. It is the largest source of foreign direct investment in the world. It is the biggest consumer market in the world. Every country, including the developed countries in the West, wants to access the Chinese market. 

The biggest destination of Chinese FDI is the US and the Europe. Has anyone criticised the US for accepting Chinese FDI? No. Similarly China is the biggest recipient of foreign FDIs. China is the biggest market for German, French and Italian goods. And also 51 percent of agricultural imports to China are from the USA. This is the reality. The First World countries are falling over each other to access the Chinese market. 

These critics don›t have the best interest of the country in mind. They also criticise the Belt and Road initiative. The money invested under this initiative has dramatically revived economies of many countries in the region. Many African Countries and South East Asian countries such as Vietnam and Laos have started to progress as a result of Chinese FDI .

Of course, we need to be conscious that our independence, sovereignty and territorial integrity are not on the table as bargaining chips during our negotiations with the Chinese or any other Government.  Over 21,000 young men and women sacrificed lives to protect our territorial integrity in the face of a terrorist threat. A larger number was maimed for life.

Q: What is being done to minimise the trade imbalance between Sri Lanka and China?

A: There is a very big trade imbalance between China and Sri Lanka. China exports something like US $ 4 billion worth of goods to Sri Lanka. We have just managed to export US $ 232 million worth of goods to China. The Mission is encouraging the Export Development Board (EDB) to take a more proactive role in exploiting the Chinese market: the biggest consumer market in the world. 

We can export almost anything to China - vegetables, coconut products, tea, gem and jewellery and handicrafts. Chinese love Sri Lankan gemstones. Two weeks ago our Mission hosted a major exhibition of Sri Lankan sapphires. Sadly all those sapphires belonged to a Chinese company.