Sri Lanka and China announce enhanced economic and political cooperation

The president of Sri Lanka promised greater coordination with China within a multilateral, Global South framework.

January 16, 2025 by Abdul Rahman
Anura Kumara Dissanayake, President of Sri Lanka and Xi Jinping, President of China, shake hands during a four day state visit in China. Photo: Anura Kumara Dissanayake / X

Sri Lanka’s newly elected president, Anura Kumara Dissanayake, went on a four-day state visit to China, during which both countries agreed to elevate their bilateral relations to a higher level. They also agreed to enhance their coordination within the framework of multilateralism and Global South unity.

Dissanayake is visiting China on the invitation of President Xi Jinping. It is his first visit to the country since taking office in September. He is traveling with a large delegation which includes Sri Lanka’s foreign, tourism, and transport ministers with the stated objective of building closer economic and political ties with the world’s second largest economy.

High-level meetings and key discussions

On Wednesday, Dissanayake met President Xi at Beijing’s Great Hall of the People. He met with Chinese Premier Li Qiang and National People’s Congress’ standing committee Chairman Zhao Leji on Thursday January 16, as well as attend several other meetings mostly related to increased Chinese investments in Sri Lanka.

During his meeting with Dissanyake, Xi promised China’s support in Sri Lanka’s economic recovery and development. He expressed hope that their countries would work together on high quality Belt and Road Initiative (BRI) projects, in addition to cooperating in fields such as agriculture, digital economy, and marine economy for their mutual development, Xinhua reported.

Xi also promised China’s continued support to Sri Lanka in maintaining its national independence, sovereignty, and territorial integrity and expressed his desire to have greater cooperation between the countries in multilateral forums such as the United Nations on issues related to the entirety of humanity.

Xi hoped the two countries would work on their relationship from a strategic perspective with the objective of creating a “China-Sri Lanka community with a shared future.”

The two countries signed various agreements related to cooperation in areas such as agriculture, tourism, education, and technology, among others.

Dissanayake acknowledged China’s positive role in Sri Lanka’s economic development and noted and praised its role in the rise of the Global South in international politics. He expressed readiness to work with China within the multilateral framework to safeguard their common interests. He also expressed his country’s unwavering commitment to the “one China” policy.

Sri Lanka’s economic challenges and China’s role in recovery

Sri Lanka is seeking Chinese support in the country’s economic recovery, particularly in restructuring its debt repayments, in addition to building infrastructure and technological know-how, Daily Mirror reported.

After his talks with several Chinese investors on Wednesday, Dissanyake announced that investment projects worth billions of dollars were agreed upon with several Chinese companies. One key agreement was with Sinopec, one of the world’s largest oil companies. Sinopec agreed to build a USD 3.7 billion refinery in Sri Lanka.

Restructuring the payment of international debt is essential for Sri Lanka as its economy is still recovering from a financial crisis that led to a default on its debt. The country will need more time to be in a position to repay its debts. A substantial part of the country’s external debt, around USD 2.2 billion, is owed to the China Development Bank.

Sri Lanka’s left wing government led by Dissanayake and his National People’s Power alliance is also seeking ways to alleviate poverty in the island nation. The living standards of the majority of Sri Lankans were badly affected due to the economic crisis which hit the country during the COVID-19 pandemic, due to fraudulent policies adopted by the previous right-wing governments led by Gotabaya Rajapaksa and his brother Mahinda Rajapaksa.

The NPP’s victory in both presidential and parliamentary elections, which defeated the right wing, was largely attributed to the people’s desire to end their economic troubles. Dissanayake promised an end to poverty and financial distress for common Sri Lankans during his election campaigns and vowed to undo the economic policies of his predecessors.

During his meeting with Dissanayake, Xi said, “China supports Sri Lanka in exploring a development path suitable for its national conditions, and is willing to deepen political mutual trust, exchange governance experience, and enhance dialogue and communication between various departments of the two countries.”