Sri Lanka is to ink the landmark Free Trade Agreement (FTA) with China this month, the World Investment Report 2015 released by the United Nations last week said. The revelation in the report is despite the absence of an official acknowledgement by the country’s authorities.
“A China–Sri Lanka FTA will be signed in June 2015. If the implementation of the 21st Century “Maritime Silk Road” gains ground, an increasing amount of Chinese investment will flow to Sri Lanka, particularly in large infrastructure projects,” the report projected.
The report by the United Nations Conference on Trade and Development (UNCTAD) which was released on June 25 said that China had become the largest source of Foreign direct Investment (FDI) to Sri Lanka in recent years.
It cited a joint venture between two companies where China Merchants Holdings (International) Company has invested $500 million in Colombo International Container Terminals, the country’s largest foreign investment project. “After two years of construction, the port started operation in August 2014,” the report said.
Meanwhile, India moved up six places to become, for the first time, one of the top 10 destinations for foreign direct investment (FDI) in 2014, according to the United Nations Conference on Trade and Development (Unctad)’s World Investment Report 2015. It was 15th on the list in 2013.
Among the positive trends in South Asia, the report said Pakistan and Sri Lanka were receiving greater FDI flows from China, Bangladesh saw an increase in new projects and Nepal was attracting more attention from multinational companies.