The Sri Lankan government is seeking additional funding facilities of up to $1 billion from China for infrastructure improvements, Finance Ministry sources said. The funding for the current financial year will come in the form of grants, loans and credit, according to a senior Treasury official.
A number of road network projects in the reconstruction process of the North and the East are in the pipeline to be funded by the Exim Bank of China, including the reconstruction of the A9 expressway at a cost of $520 million, he said.
He added that China became the biggest donor to Sri Lanka in 2009, with $1.2 billion worth of assistance representing 54 % of the total $ 2.2 billion committed by foreign countries and multilateral agencies.
The next highest contributors were the Asian Development Bank with $423 million and the World Bank with $241 million, he said. Trade between the two countries has doubled over the last five years from $660 million to $1.13 billion, making China the second largest exporter to Sri Lanka and the 13th largest export destination for Sri Lanka’s exports.
Sri Lanka exports coconut fiber products, natural rubber, tea, spices, precious and semi-precious stones and ready made garments to China There has been a significant increase of Sri Lankan exports to China since 2000, mainly due to the bulky export of mineral sands as zicronium ores, coir fiber and electrical components, etc.
"We have paid far too much attention to the export markets in the US and European Union and now we need to move towards the Asian giant China. We have had an over dependence in the US market for our exports for too long," he added.
He said that the country is to progress rapidly with the restoration of peace, a sound investment climate and most importantly, political stability along with proper infrastructure such as aviation and shipping facilities, electricity, telecommunication and transportation.
With the end of the war, the country is embarking on an exceptional development in these sectors with Chinese assistance he added.