Commenting on Sri Lanka-China relations, the Ambassador asserted that China would extend its fullest cooperation for economic development just as it has supported development projects like the Hambantota port and the Colombo Port City. He said there was a misconception that the Colombo Port City project was a construction programme of China. “It is not a construction programme by China. Rather it is a development programme which will benefit all Sri Lankans,” he said.
“China condemns the heinous attacks on innocent civilians on Easter Sunday and is in solidarity with the bereaved families. So far there has not been any request for surveillance or detection equipment from Sri Lanka. If requested we would extend our support to Sri Lanka,” the ambassador said adding that China would not interfere in the internal affairs of another country. The white paper on ‘China’s position on the China-US Economic and Trade Consultations’ issued by the Chinese Government stresses that economic and trade friction provoked by the US damages not only the interest of both countries but also the wider world.
“The tariff measures imposed by the US harms others and are of no benefit to itself, impeding two-way trade and investment cooperation and undermining market confidence and economic stability in the two countries and globally,” the Ambassador said adding that the tariff measures have not helped make America ‘great again’, the slogan of US President Donald Trump. Instead, they have significantly increased production cost for US companies, leading to domestic price hikes in the US and an impact on the economic growth and the livelihood of people in the US, he pointed out.
The Ambassador noted that the US’ “trade bullying” harms the world, damages the multilateral trading system, seriously disrupts global industrial chains and supply chains, undermines market conditions and poses a serious challenge to the global economic recovery and a major threat to the trend of economic globalization. Global economic prospects forecast released by the World Bank in January this year has now been revised and the forecast for global economic growth reduced to 2.9 percent citing continuous trade friction as a major downward risk.
The International Monetary Fund too marked down its projections of the world economic growth for 2019 to 3.3 percent from the 2018 estimate of 3.6 percent in its World Economic Outlook published in April. The Chinese white paper notes that the US has backtracked on its commitments in the China-US economic and trade consultations.
“In response to the economic and trade friction started by the US, China has been forced to take counter measures as bilateral trade and investment relations took a hit. Both sides deemed it necessary to come to the negotiating table to seek a solution through consultation. Since they were launched in February 2018, the economic and trade consultations have come a long way with the two sides agreeing on most parts of the deal,” the Ambassador said. However, according to the Ambassador, the consultations have not been without setbacks, each of them being the result of a US breach of consensus and commitments and backtracking.
“The US government should bear the sole and entire responsibility for this severe setback to the China-US economic and trade consultations,” the Ambassador said. The white paper stresses that China is committed to credible consultations based on equality and mutual benefit. The Chinese government rejects the idea that threats of a trade war and continuous tariff hikes can ever help resolve trade and economic issues. It notes that striking a mutually beneficial agreement serves the interest of China and the US and meets the expectations of the world.
The US re-ignited the ongoing trade war last month by imposed additional tariffs on billions of dollars’ worth of Chinese goods, prompting China to retaliate. However, according to economists, the fallout of the US-China trade relations does not seem to have a major impact on Sri Lanka as the country’s exposure to the rest of the world in terms of trade is low.
“The impact of China-US trade and economic friction on Sri Lanka will depend on how much are we integrated with the rest of the world. We are not integrated much with the rest of the world. Therefore the impact will be marginal. However, Sri Lanka should not be complacent and ignore the impact of it on global trade,” Professor in Economics University of Colombo Sirimal Abeyratne said. Responding to a view that tariffs are the stumbling blocks for economic growth in countries he said the reason is that the citizens of US eat more than what is required and its is the same with Sri Lankans. Prioritizing our needs will help address the tariff issue to a great extent.