Growing middle class to reach 400 m by 2010:

Sri Lankan exporters should capture Chinese market - Dr Saman Kelegama

At a glance

* Heladiv opens three exclusive tea shops in China.

* Demand for gems and jewellery rapidly increasing.

* Woo Chinese visitors to boost tourism industry.

Sri Lankan exporters should capture the major market opportunity emerging in China through its growing middle class which is expected to reach 400 million by 2010, Institute of Policy Studies, Executive Director, Dr. Saman Kelegama said.

He was speaking on “China Economic Relations - an overview” at the Sri Lanka China Business Forum organized by the Ceylon Chamber of Commerce, at Cinnamon Lakeside, on Friday.

He said that many countries felt that China would be a threat. However, Sri Lanka should see this as an opportunity as China continues to prosper in the world economy.

The growing middle class in China will have increasingly differentiated tastes and there is a huge potential for Sri Lankan exporters.

The China-Sri Lanka relationship is a fine example for ‘big country-small country relations’ with mutual benefits experienced by both countries, he said.

After many years, China has opened its borders to Sri Lankan tea imports and the Sri Lanka’s Heladiv Tea Company has already opened three exclusive tea shops in the Fujian province and Beijing in August this year. The company plans to open 100 boutiques in China by 2011 and 20 by the end of this year. The demand for gems and jewellery is also increasing rapidly with the rising income levels of the Chinese population and this market should be exploited.

Herbal products such as sea food, vegetables, coconut-shell charcoal and rubberized coir have further potential in the Chinese market, he said.

Kelegama said that tourism is another area that has a lot of potential and Sri Lanka hopes that on Chinese visitors would boost the tourism industry.

The number of tourist arrivals from China has increased from 2,208 in 2000 to 16,274 in 2006, a growth of 637 percent.

Improved air connectivity can further enhance the tourism industry and steps have been taken in this connection.

He said that the Sri Lankan Embassy in Beijing together with the BoI held two seminars on investment opportunities for Chinese entrepreneurs in March, 2009 attracted 90 entrepreneurs from sectors such as infrastructure, real estate, fisheries, agriculture, paper manufacturing, steel, leather products, solar and energy and cosmetics and telecommunication. China’s FAW and SAIC car companies are currently negotiating with the BoI to set up their manufacturing plants in Sri Lanka.

These companies will export vehicles to Latin American countries and to some African countries,” he said. Following an offer by the Government of an oil exploration block to China, the China National Petroleum Cooperation (CNPC) has begun oil exploration work in Mannar, Kelegama said.

Ambassador of the People’s Republic of China, Yang Xiuping and former Ambassador for Sri Lanka in China, Nihal Rodrigo were also present.

Secretary General, Colombo Plan Secretariat, Dato’ Patricia Yoon was the guest speaker at the event.