Sino-Lanka ties high on free trade pact, billion-dollar loan and military exercise
China and Sri Lanka have laid the groundwork for their navies to cooperate in maintaining maritime security in the Indian Ocean region.world Updated: May 30, 2013 01:03 IST
China and Sri Lanka have laid the groundwork for their navies to cooperate in maintaining maritime security in the Indian Ocean region.
Maritime security collaboration was part of the expanding defense ties between the two countries that got a boost when visiting president Mahinda Rajapaksa and president Xi Jinping signed several deals on Tuesday.
Rajapaksa met both Xi and premier Le Keqiang and lifted the ties of the two countries to the level of “strategic cooperation partnership”.
China has also offered Sri Lanka $2.2 billion in loans for infrastructure projects. The loans make up a “preferential bias” credit facility for infrastructure.
Beijing has already pumped in millions of dollars in Sri Lanka to build ports, airports, power plants and highways across the island nation. The two countries have also agreed to sign a Free Trade Agreement (FTA) for which a joint working group (JWG) is being set up to draw-up the modalities.
India has an FTA with Lanka. But the Comprehensive Economic Partnership Agreement — the next level of economic ties after an FTA — between the two countries is long pending to be inked.
China has built a port in the Hambantota area of south Sri Lanka and is also assisting in expanding the Colombo port.
China’s increased presence in the region is very likely to irk New Delhi though Peiris said Beijing-Colombo ties wasn’t aimed at damaging relations with any other country.