China-South Asia trade

Jinith de Silva

China maintains very good relations with all South Asian countries. From ancient times, Chinese travelers came to these countries through the Silk Route for trading. Their silks and Chinaware were much sought after among the people of these countries.

The volume of trade increased many fold after the silk route changed from land to sea. China occupied a pre-eminent place among the seafaring nations. The achievements of renowned Chinese Admiral Zheng He should be recalled with admiration and gratitude.

He criss-crossed the Indian Ocean with a fleet of over 200 ships. He visited Sri Lanka several times and on one of his visits, he engraved an inscription at the Galle Harbour which continues to be of great historical interest to scholars and visitors to that city.

With the conquering of the South Asian region by Europeans, the Chinese influence in this part of the world diminished along with trade.

The world is different today. Since China opened her economy in 1978 and introduced new reforms, there has been extraordinary progress. Today, it is the second largest economy in the world. It currently holds the largest foreign currency reserves amounting to more than $3 trillion, and today China has become the primary trading partner for a number of Asian countries.

China has recorded by far the most impressive performance in human history in terms of the number people who have been lifted out of poverty over a time span of just 30 years. In the process, by offering the prospect of increased trade, China has contributed significantly to growth and development in the Asian region.

I suggest that Asian countries should attach high priority to expanding their economic links with China. The Chinese authorities are in the process of rebalancing their economy by boosting domestic demand as a means of reducing their reliance on exports to the recession affected US and European markets.

This would create new trading opportunities for the region. In addition, with the expected strengthening of the Yuan, there are likely to be better prospects for attracting Chinese FDI.

I propose the following specific measures to incentivise South Asian businessmen to expand their trade and investment relations with China. These proposals are based on our understanding of existing constraints to doing business in China such as: Language difficulties, Lack of understanding of Chinese business practices and ethics, Lack of understanding of Chinese manufacturing, distribution and trading networks and Differences in quality and other standards.

Establishment of Chinese business facilitation centres in South Asian cities

The establishment of business facilitation centres in major cities in South Asian countries is a sine qua non today. These centres may be business equivalents of the Chinese cultural centres. Among the services that could be provided are profession of interpreters, translation of documents, make available business directories, list of importers, exporters, classified according to products and services and Chinese companies interested in investment in South Asia and other similar services.

South Asian businessmen visiting China too could be facilitated if the Chinese government and/or business organisations could maintain similar business promotion/facilitation centres in key cities of China. Of course, establishment of such centres or windows by provincial or city governments could also benefit Chinese second and third tier cities to attract South Asian businesses.

All such activities whether in South Asian countries or in China could be managed on a reasonable fee levying basis.

Upgrade Chinese language learning facilities

Learning Chinese language is an absolute must to develop business and other relations with the people of China. Therefore, Chinese language learning facilities should be expanded with assistance from China. In some countries they have opened Confucius centres for this purpose. But it is not sufficient in Sri Lanka, as many schoolchildren have shown interest to studying Chinese language, but we do not have enough teachers.

In addition to teaching of formal reading, writing and speaking Chinese language over a longer period, it is necessary to introduce intensive spoken Chinese language training programmes to expand business relations including promotion of tourism. This should be given the highest priority.

Economics assistance from China

We know that China has a huge foreign currency reserve. At the end of 2011, China’s foreign exchange reserves exceeded US$ 3 trillion. China could help the South Asian countries to improve their economies and infrastructure. We know that the assistance given by Western nations are always with strings attached. It is a different story with China. They are very open hearted and has helped Sri Lanka in a big way. The recently opened Mattala Airport and Hambantota Harbour are two classic examples.

China should relocate some of its industries to Asian countries. It will be beneficial to both parties. If some of the industries are relocated in Sri Lanka for example, China could export to India and Pakistan using the low taxes applicable under the Free Trade Agreement now in operation between Sri Lanka, India and Pakistan. Using this agreement China could approach the four Southern Indian States, Kerala, Andra Predesh, Karnataka and Tamil Nadu which has a population of 250 million. The distance from Sri Lanka to India is 20 miles.

Tourist industry

Annually, nearly 90 million Chinese visit other countries as tourists. Chinese tourists have overtaken Germans as the world’s highest spending travelers.

Most of them visit the following countries. Greater China - Hong Kong, Macao and Taiwan; Thailand, Malaysia and Singapore; Honeymooning market - Maldives.

South Asian countries should try to grab this market using the following resources available to them. The cultural diversity available in these countries such as culture and rich history, the geographical diversity available in these countries. For example in Sri Lanka within two hours a visitor could go from the hot climate to cool hill country, flora and fauna - The biodiversity in this part of the world will be an added attraction. Ex. Singharaja forest in Sri Lanka, Wildlife - Wild ife enthusiast will flock to see the species endemic to this region, Beaches - these countries too could enter the honeymooning market, presently enjoyed by Maldives, if proper facilities are made available. there are golden beaches and good hotels right around sri lanka.

New agriculture technology

Agriculture is a vast area that we can look into. China has had success in the area of green house agriculture. We could obtain their assistance in the production of green tea too. People all over the world have come to realise the medicinal value of green tea. South Asia could benefit from the advances made in Chinese agricultural research centres. All season rice is a classic example to this.

They announced recently the launch of a project to breed new super rice strains with is expected to yield of 14.9 metric tons per hectare, well above the world average of 4 tons.

China recorded a grain output of more than 589 M tons in 2012 the ninth consecutive year of increased grain harvests according to the Chinese National Bureau of Statistics.

Food and environmental security

China has been able to produce healthy untainted enough food for its 1.3 billion population. China achieved this by correct planning, improving laws, strengthening regulations and good supervision. There are many things that South Asian nations could learn from this area.

Environment

Environment is a very important area that South Asian countries will have to look into soon. I think the South Asian countries could learn much from China on how to manage environmental problems.

Solar power

China is well ahead with its solar power generating capabilities. At a time when generating affordable electricity is becoming a problem the rest of South Asia can emulate the success that China has achieved in this sector.

Deep-sea fishing

Due to internal constraints China has to look beyond its borders to fulfill its fishing needs. This is an area that South Asian countries can take advantages of and promote joint ventures between China and other countries.

Technical training

South Asian countries could benefit by sending their youth to China for technical training. A programme should be formulated with China to obtain advance training.

We suggest that the four main areas that should be focused upon are: Renewable energy - solar power, Agriculture (agriculture/eco tourism), Fisheries and Tourism.

We the people of South Asia should look to China the power house of Asia to solve our social economic problems, which I know will be advantages to the entire region.

The writer is Secretary, Sri Lanka - China Society