Sri Lanka’s trade deficit with China crosses US $ 2bn in first half

• Trade deficit with India at US $ 1.7bn
• SL maintains trade surpluses with US, UK and EU
• SL’s trade surplus with US up at US $ 1.12bn in first half, compared to US $ 965mn a year ago

Sri Lanka’s trade deficit with China continued to widen in the first half of the year, crossing the US $ 2 billion mark, representing half of the country’s deficit in the trade account in the period. 

In the six-month period, the bilateral trade balance between the two countries widened by US $ 773.6 million to US $ 2.23 billion in favour of China compared to a year ago, while Sri Lanka’s overall trade deficit rose by over US $ 1 billion to US $ 4.3 billion in the period. 

China also maintained its position as the country’s top trading partner in the period, after surpassing India as the top trading partner last year.

The imports from China rose by 57.4 percent year-on-year (YoY) to US $ 2.5 billion and exports to China doubled to US $ 276.33 million in the first half of the year, according to the data published by China’s Custom Authority.
Key imports from China include textile raw materials such as yarn, cotton and fabric, machinery and equipment, building material, including iron and steel, chemical products and telecommunication devices.

 Meanwhile, Sri Lanka posted the second largest trade deficit with India, at around US $ 1.7 billion during the period. Petroleum-based products, sugar, pharmaceuticals and steel imports from India grew notably in the period.
In 2020, Sri Lanka’s trade deficits with China and India stood at US $ 3.4 billion and US $ 2.5 billion, respectively. 
Sri Lanka maintained its most notable trade surpluses with the US, followed by the EU and UK. The country’s trade surplus with the US reached US $ 1.12 billion in the six-month period, from US $ 965.4 million recorded in the same period, last year.

In addition, Sri Lanka posted smaller trade surpluses with Mexico, Bangladesh, Canada, Iraq, Turkey, the Maldives and Azerbaijan in merchandise trade during the period