Sri Lanka has squandered two decades of opportunity to capitalise on China’s massive import market, according to Research Director at Verité Research, Subhashini Abeysinghe. Chinese imports have skyrocketed by 1,100 percent during this period, yet Sri Lanka’s exports to China remain negligible.
“In 2000, Chinese imports were valued at approximately US$ 225 billion annually. Today, that figure stands at a staggering US$ 2,550 billion, the largest emerging market in Asia,” Abeysinghe said.
Despite this, Sri Lanka’s exports to China amount to only US$ 300 million with China failing to rank among the country’s top ten export destinations. In contrast, other Asian nations have significantly expanded their market share. “Take Thailand or Malaysia in the early 2000s. They too exported very little to China, around four percent of their total exports. Today, however, China accounts for nearly 20 percent of their exports,” she said.
Abeysinghe outlined Sri Lanka’s policy missteps, saying, successive Governments have treated China primarily as a source of loans rather than a trade partner. While ASEAN countries signed a Free Trade Agreement (FTA) with China in 2004, Sri Lanka only initiated discussions in 2014.
“We held six rounds of talks, and an agreement was expected to be signed in 2018. That did not happen.
Now, we are revisiting the idea in 2025, 20 years after ASEAN seized the opportunity,” she said.
China has 24 Free Trade Agreements (FTAs) with various nations and five with multilateral groups, positioning itself as a key global trade hub. Abeysinghe said that a Sri Lanka-China FTA would not only boost exports but also enhance the country’s attractiveness to foreign investors.
As Sri Lanka grapples with economic challenges, experts said that a renewed focus on export-driven growth, rather than dependence on debt, could be the key to long-term economic stability.
