CB Governor says Bank of China has potential to really move needle on SL’s development

By Indika Sakalasooriya

While the Sri Lankan entry of Bank of China marks a major landmark in Sino-Lankan relations, it also has the potential to really move the needle on Sri Lanka’s economic development, according to the country’s Central Bank Governor Dr.Indrajit Coomaraswamy.

“Entry of Bank of China marks what could be the beginning of an extremely productive and constructive relationship. It has the potential to really shift the needle as far as the support for the development of the economy is concerned,” Governor Coomaraswamy said.

He made these comments during a ceremony held to announce the launch of the Colombo branch of Bank of China on Wednesday, at which Prime Minister Ranil Wickremesinghe was the chief guest.

Dr.Coomraswamy noted that the entry of Bank of China to Sri Lanka has vast potential in terms of promoting trade and investment not only between China and Sri Lanka but also in terms of assisting Sri Lanka to integrate with a wider region of the global economy.
“The Bank of China with its vast network of clients, both in China and across the globe, is well placed to help Sri Lanka to leverage new commercial opportunities,” he said.

Bank of China, a Fortune Global 500 company, with an asset base of    US $ 2.7 trillion, is the world’s 4th largest bank and is listed in both Hong Kong and Shanghai stock exchanges. The bank has presence in 54 countries including Sri Lanka.   

Governor Coomaraswamy expressed confidence that the entry of Bank of China would allow Sri Lankan manufacturing firms to secure relatively cheap capital given its massive financial clout. In the same manner, he said, Bank of China will assist Chinese businesses and investors to find commercial opportunities in Sri Lanka. 

“Public private partnerships in infrastructure are a very high priority for the country given our fiscal constraints. It is also very important to link our small and medium sized companies to cross border production sharing networks - i.e. supply chains. Also the industrialization of Sri Lanka hasn’t been very buoyant. 

“I believe Bank of China can play a key role in these spheres,” Dr.Coomraswamy said. 

Meanwhile, Prime Minister Ranil Wickremesinghe said the Bank of China Colombo branch is another strong step towards building a strong economy for Sri Lanka.

“This shows, in the last three years, we have been successful in our economic management as one of the largest banks in the world has come to Sri Lanka,” Wickremesinghe said.

Although Sri Lanka’s relations with China date back to over a 1000 years, the modern economic relations between the two nations began with the Rubber-Rice pact signed in 1952. 

In the present context, Sri Lanka is an important pillar of China’s ambitious Belt and Road (B&R) initiative masterminded by Chinese President Xi Jinping.  Premier Wickremesinghe said Sri Lanka is also eyeing to be the trade hub of the Indian Ocean. 

“Asia is going to be a power house and China will be a major player in this equation. I must say in this backdrop, we are in a very fortunate position. We are negotiating a free trade agreement with China in addition to what we already have with India, Pakistan and Singapore. 
“So going forward Bank of China has a very important role to play,” he said.