Creating synergies for growth of Asian economies

Speech by Prime Minister Ratnasiri Wickramanayaka to the China International Co-operation Forum

This is the 10th anniversary of introducing the “Western China Development Strategy” and the successful launch of the 10th Western China Expo. In the past six decades China has accomplished enormous feats in becoming a modern and prosperous nation which has become a source of pride and inspiration not only to the Chinese people but to all of us in the world. The western development drive has thereby turned into a mammoth project bringing many opportunities to all of us in

Asia, making it a win - win strategy for the world at large.

The increasing of resources and the granting of preferential policies, by the Central Government to the Western regions of China have successfully contributed to improving the dynamics of the national economy of China and invariably creating new synergies for the growth of the Asian economies.

Changes in Asia

The last decade has seen extraordinary changes in Asia. The region has undergone a major transformation causing a paradigm shift in world’s trade and investment patterns. Developing economies particularly in Asia now contribute to half of world GDP and there are all signs, this redistribution and growth of wealth will continue for the next decade and more. Asia is now firmly a driver of world growth.

This extraordinary economic growth has no doubt brought immense benefits to the people of Asia. The number of people living in absolute poverty has declined today.

The living standards have improved and people have become healthier. This no doubt has become a great inspiration for us to move forward in chartering our course for the future.

The Asian resilience could be vividly displayed in terms of the current global economic environment.

Although the pace of growth has slowed due to the effects of the financial downturn the region has built substantial buffers against external shocks since the 1997-1998 financial crisis. However, Asia is not totally immune to the potential spillovers.

Given these risks, we are aware that Asia’s policy makers need to take the steps to ensure confidence in the global financial market.

They must continue to pursue sound financial management policies in improving the socio-economic balance through deeper and more comprehensive reform efforts, as economic growth will still remain one of the prerequisites in the region. But this growth oriented strategy will need to be a sustainable, pro-poor and a more inclusive process giving due consideration to environmental safeguards.

To further harness the synergies evident within the Asian region in promoting regional economic co-operation and integration, we need to be innovative in our thinking.

We have to be proactive in expanding our ties and building bridges between cultures. These linkages would strengthen opportunities and advantages for us, creating new learning processes to overcome our weaknesses and threats.

Cordial relationship

Over the last 52 years, Sri Lanka and China have established a close and cordial relationship founded on the bedrock of close traditional links and mutual understanding.

Many meetings at the highest level of Government have contributed to cementing the abiding ties of friendship between Sri Lanka and China. Springing from the above, Sri Lanka and the Sichuan Province have already entered into a healthy partnership in many fronts.

Having successfully defeated one of the deadliest terrorist organizations who had waged a separatist war against all peace loving people of my country for almost three decades, Sri Lanka has embarked now on a new chapter of peace and development. Similar to the “Western development strategy of the Chinese Government we have embarked on a Northern and Eastern resurgence drive.

There are many prospects in my country for socio-economic development, co-operation in the agrarian and the fisheries sectors, promotion of trade and investment and electronics and pharmaceutical industry amongst many others. We have a lot to learn from the Chinese in fashioning our economic recovery and development and from China’s expertise in diverse areas of agriculture, education, communication, energy and industry.

Simultaneously, there is great promise to translate our political relationship into a deeper economic partnership. In giving a greater impetus to this partnership.

Sri Lanka would before the end of this year open its consulate in this beautiful city of Chengdu, further expanding our horizons in a mutually beneficial partnership.

Used as a tool

Though our trade balance is heavily tilted to the advantage of China it is our firm understanding that protectionism should not be used as a tool in averting the effects of the financial crisis. However, in recent years, many Sri Lanka niche products particularly tea, gems and jewellery, spices and handicraft have been able to secure a good place in the Chinese consumer market. We do appreciate the efforts taken by the Chinese Government in taking many measures to arrest these negative trends.

In the globalized environment in which today’s international trade is conducted, it is opportune to look for comparative advantages thus creating a win-win situation for all in both trade and investment opportunities.

Hence Chinese investors need to explore the advantage of Sri Lanka’s stable environment for investments and the strategic positioning in the Indian Ocean, being centrally located between the Middle East and the Far East, “the intersection of the major trade routes and sea lanes across the Indian Ocean,” as a location for their investments.

An exclusive economic zone

Sri Lanka has granted China an exclusive economic zone in its first post-war effort to attract more investment, which I consider as “an encouraging step”. Further Chinese investors in Sri Lanka can also benefit from its Free Trade Agreement with India and the GSP + facility to Europe. The India free Trade Agreement provides access to 4,150 items at zero tariff.

I must also emphasize that a healthy public-private partnership is one other aspect that undoubtedly would facilitate countries to integrate into the global trading system, promote sustainable economic and social development ensuring optimum use of limited resources and maximizing benefits to the target beneficiaries. This 10th Western China Expo, could be made as a catalyst by all participating countries today, to explore such co-operation.

I wish the Sichuan Government success in all her future development endeavours. It is my strong belief that opportunities afforded by this Expo, will be harnessed by all participating countries to maximize mutually beneficial ties, thereby creating a sustainable process of development for the whole of Asia and the region.

It is also my firm conviction that the enduring bonds of friendship and goodwill between our two nations Sri Lanka and China, will continue to be strengthened and consolidated.