“The Sino-Sri Lanka relationship has become a model relationship between states with different social systems. We believe that, thanks to joint efforts of the two governments and the two peoples, Sino-Sri Lanka friendship will surely roll on incessantly like the Yangtze River and Mahaweli Ganga”. These sentiments made by former Chinese Premier Li Peng in [...]

Business Times

Sino-Lanka Rubber-Rice Pact symbolises ‘a friend in need, a friend indeed’

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“The Sino-Sri Lanka relationship has become a model relationship between states with different social systems. We believe that, thanks to joint efforts of the two governments and the two peoples, Sino-Sri Lanka friendship will surely roll on incessantly like the Yangtze River and Mahaweli Ganga”.

These sentiments made by former Chinese Premier Li Peng in 2002 at the 50th anniversary celebrations of the Sino-Lanka Rubber –Rice Pact were highlighted at the 65th anniversary celebrations of the agreement at the BMICH in Colombo on Monday.

The event was organised by the Chinese Embassy in Sri Lanka in collaboration with the Sri Lanka-China Business Council of the Ceylon Chamber of Commerce.

Outlining the enduring character of the friendship between the two countries, Speaker Karu Jayasuriya told the distinguished gathering, that China, an ‘all weather friend’ of Sri Lanka, was instrumental in building and funding massive infrastructure projects such as Colombo Port City, express highways, Hambantota port and airport as monuments for the everlasting friendship.

This friendship has been strengthened in leaps and bounds since the signing of the beneficial agreement in 1952, he said adding that rice had become a very politically sensitive commodity as the then government had to provide people with two measures of rice at a time of a severe shortage.

US-friendly countries at that time were trying to stop rubber exports to Communist China as rubber was branded as a “strategic material”.

China wanted rubber as badly as Sri Lanka wanted rice and then Commerce Minister, the late R. G. Senanayake was quick to realise the mutual benefits of trade with China, and negotiated the Ceylon China Trade Agreement or the Rubber-Rice Pact in Beijing, foreseeing the emergence of China as a world power, he said.

Sri Lanka had entered into the landmark rice for rubber barter deal with China defying the US stance. The agreement of 1952 was the most successful and long –lasting endeavour having been in (active) operation for 30 years.

It was signed by the late R.G. Senanayake and his Chinese counterpart, the late Lei Renmin in the presence of the then Prime Minister of China, Zhou En Lai in Beijing.

In terms of the conditions of this agreement China consented to supply 80,000 tons of rice to Sri Lanka within a short period in exchange for Sri Lankan natural rubber.

Later Sri Lanka assured to import 270,000 metric tons of rice each year for a period of five years and China guaranteed to purchase 50,000 tons of rubber each year over the same period.

The price of rubber offered by China was 40 per cent higher than the price quoted by the Western countries but the price of rice offered by China was less than 1/3rd of the world market price.

The Rubber- Rice Pact was the starting point for the expansion of bilateral trade between Sri Lanka and China, leading the way to closer and stronger economic cooperation between the two countries, Mr. Jayasuriya said adding that it was promptly followed by the establishment of diplomatic relations with China, in 1957.

Pang Chunxue, Charge d’affairs at the Chinese Embassy in Colombo said that China and Sri Lanka relations date back to a thousand years and the rubber rice pact was the first major barter trade agreement signed between the new China and a non-socialist country.

Families of the two late ministers were presented with ceremonial plaques to mark the occasion.

China Business Council of the Ceylon Chamber of Commerce Senior Vice President Thulitha Mendis delivered the address of welcome.

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