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China,Sri Lanka to invest in Maritime Silk Road initiative

(Xinhua) Updated: 2014-12-16 17:31

COLOMBO -- China and Sri Lanka will continue to strengthen investment relations through the 21st Century Maritime Silk Road initiative and allow Chinese companies to do business in the island, officials said here on Tuesday.

The two countries will continue expanding cooperation on significant infrastructure projects, including building a $1.4?billion?port city, expanding terminal services at the Colombo port and constructing a $1 billion ?highway connecting the capital with the once remote northern part of the country.

"These projects have great meaning. The port city project will be an important investment platform that will provide more opportunities and attract foreign investments. The northern highway is considered as the model of cooperation between the companies of two countries," said Finance Ministry Secretary P.B. Jayasundara.

He also said the Free Trade Agreement (FTA), to be signed between the two countries early next year, will help reduce the trade imbalance, which is currently heavily in China's favor.

The infrastructure projects funded by China will facilitate this along with Sri Lanka's involvement in China's Maritime Silk Road initiative as well as tapping into funding from the Asia Infrastructure Investment Bank (AIIB).

"We will enlarge the cooperation between the two countries, promote the negotiations on free trade area. We will take full advantage of the 21st Century Maritime Silk Road, and increase Sri Lanka's investment appeal," he added.

Chinese Ambassador Wu Jianghao said he believes Sri Lanka needs to continue upgrading its infrastructure and enhance cooperation with China in other sectors of the economy.

"We want to utilize the achievements in infrastructure construction to promote our cooperation in other fields, such as in manufacturing, services and finance," he said.

Since Sri Lanka ended a 30-year war in 2009, China has emerged as the island's largest loan provider with $1.2 billion in loans in 2009 and $821 million in 2010.

In 2011 the amount fell to $784.7 million?but China remains involved in almost all the existing large scale projects, according to the Finance Ministry.

Some of the biggest projects include a $1.3 billion coal power plant on the northwestern shore as well as a host of other investments in the south of the country that are estimated to exceed $4 billion, including a $1.2 billion harbor.

Relations have also been boosted by frequent state visits between high level officials. Sri Lanka President Mahinda Rajapaksa visited Beijing in 2013 during which ties between the two countries were elevated to a "strategic partnership," laying the groundwork for greater engagement.

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