China is looking forward to the establishment of a China-Sri Lanka Free Trade Zone (FTZ) as soon as possible, senior Communist Party of China official Liu Yunshan told Sri Lankan Economic Development Minister Basil Rajapaksa during the former’s visit to Colombo last week, according to a statement from the Chinese Embassy in Colombo.
In response, Mr. Rajapaksa said Sri Lanka is confident of an early signing of a free trade deal with China, given the positive progress in the negotiations over the past six months.
While China is the world’s largest exporter of textiles and apparel, Sri Lanka is a manufacturing hub for lingerie, T-shirts and blouses.
In fact, the garment sector accounts for nearly half of the entire Sri Lankan industrial output.
At present, Sri Lankan exports of textiles and apparel attract duty ranging from 14 percent to 25 percent in China, and if the free-trade deal fructifies, all textile and clothing items from Sri Lanka would be able to enter the Chinese market duty-free.
This would also help some of the global apparel brands that have their manufacturing facilities in Sri Lanka, according to industry analysts.