News
China carves out US$4 billion chunk from Sri Lanka trade in 2024
View(s):BY KAPILA BANDARA
China’s ever-expanding trade surplus with Sri Lanka has bulged to a new high surpassing US$4 billion (Rs 1.195 trillion) in 2024, nearly doubling from the year before and continuing the nine-figure advantages.
This was a period in which Sri Lanka’s import prices eased slightly overall improving the terms of trade, as measured by the ratio of export-to-import prices, and when the rupee firmed against the yuan by 13.9%.
In 2023, too, China’s exporters carved out a surplus of US$2.831b and in 2024 their share surged to US$4.080b, Sri Lanka Customs data cited by the Export Development Board show. This is a new high from 2022, when China’s surplus was US$3.269b on a bilateral trade value of US$3.776b.
In 2024, the total bilateral trade was US$4.584b. Sri Lanka’s imports from China in 2024 surged by 40% versus 2023.
China imported goods from Sri Lanka worth just US$251.91 million. This is a drop of 2% from 2023. The biggest item that China imported was bulk tea worth a meagre US$45.36m, ahead of activated carbon (US$24.5m), and T-shirts (US$17.37m).
In the top 20, there are no agricultural products other than tea.
China’s bounty of trade surpluses with Sri Lanka have been persistent.
The 2023 trade surplus of US$2.8b is bigger than Sri Lanka’s entire forex earnings of US$2.1b from tourism that year. And China’s 2024 surplus is even bigger than Sri Lanka’s total trade of US$3.985b with other countries under the generalised system of preference terms, separate data from the Central Bank of Sri Lanka show.
China’s 2024 total imports of US$251.91m from Sri Lanka is nearly as insignificant as the loads of pungent durian China bought from Malaysia worth US$204.5m in 2022.
The surplus column has burgeoned in value every year in China’s favour, despite strategically worded pledges such as “China welcomes Sri Lankan enterprises to sell competitive and distinctive products to the Chinese market’’, and carefully hedged, agreed-to language in joint statements during political leaders’ visits to Beijing. “The Chinese side welcomes more imports of quality agricultural products from Sri Lanka’’ (October 2023). “The two sides expressed satisfaction over the progress made in bilateral cooperation in economy and trade.’’
Even in 2019, a year when Sri Lanka was reeling from the Easter terrorist attack on Catholic churches, China chalked up a massive trade balance of US$3.8b.
Sri Lanka also imports garlic from China (US$50.76m in 2024).
Low-quality electronics, unregulated power tools, plastic ware, hardware ranging from nails and padlocks to bathroom ware and building materials imported from China are found in every province, while China only buys a meagre amount of goods from Sri Lanka — mostly tea in bulk.
Hundreds of low-quality goods from the Yiwu wholesale market in eastern Zhejiang province are not hard to find in Sri Lanka and there are even some
Sri Lankans and Chinese jointly involved in shipping them by the container load. One firm advertises container freight rates of US$1,400 for a 20-foot box, plus other charges.
In Pamunuwa, Maharagama, a shop that does not stock Chinese goods is a rarity.
Despite the vast trade imbalances, successive Sri Lankan leaders have gone along tolerating it in favour of bilateral assistance that China’s hands out, not to mention the unpaid loan balance.
Sri Lanka owes China US$4.925b in bilateral debt as of the fourth quarter of 2024, Finance Ministry data show. China Development Bank is owed US$612m. China Exim Bank is owed US$4.176b.
Negotiations for a Sino-Sri Lanka free trade agreement have crawled for years.
Electrical and electronic products made up the bulk of Sri Lanka’s imports from China, worth US$792.18m in 2024, versus US$339.4m in 2023, EDB fig-ures show. Woven fabric is the second largest at US$509.93m, and products made of base metals (such as aluminium and copper) are the third big-gest category at US$497m.
MAS Capital Private (Ltd) of the MAS Group, was the leading Sri Lankan exporter (underwear, T-shirts etc) to China in 2024, followed by Mabroc Teas (Pvt) Ltd., (bulk tea) and InQube Global (Pvt) Ltd (outerwear, underwear), the third biggest. Among the top 15 are Board of Investment companies en-joying income tax holidays, Treasury records show.
Sri Lanka’s overall trade deficit in 2024 was US$6.1b and it widened to 6.1% of the economic output. India was the big-gest trading partner with US$4.8b bilateral trade.
The best way to say that you found the home of your dreams is by finding it on Hitad.lk. We have listings for apartments for sale or rent in Sri Lanka, no matter what locale you're looking for! Whether you live in Colombo, Galle, Kandy, Matara, Jaffna and more - we've got them all!