International Conference on “China in South Asia – South Asia in China: OBOR and the Sri Lankan Experience”
Organised by the Regional Centre for Strategic Studies (RCSS)
30 – 31 August, 2017, at Committee Room E (Tulip), BMICH, Colombo, Sri Lanka
Session 02: Economic Development
Abstract: “Investment Pattern between China and Regions along the Routes of the Belt and Road Initiative” by Dr. Ran Jie
The article analyses the general outward Foreign Direct Investment (FDI) and inward FDI capacity, scenario and interdependence between economies along One Belt One Road (OBOR) and China based on empirical and statistical method. The research indicates that with comparatively rich home and outside capital resource in the sound economies along OBOR, FDI is growing, and interdependence is deepening while unevenness is emerging among regions along OBOR. It shows that the objective and subjective foundation and region’s willingness for integration are solid for the Belt and Road Initiative. However, the regional unevenness suggests some more steps should be taken for OBOR initiative promotion and common prosperity, namely, exploring complimentary advantages among bilateral and multilateral industrial structures, facilitating investment and removing FDI barriers.
Abstract: “Potential Economic Benefits of One Belt- One Road and Opportunities for Sri Lanka” by Dr. Ranee Jayamaha
The technology innovation, lower transaction and market entry costs, and high government investment facilitated China’s rapid economic growth during the past three decades. This growth strategy has run its course prompting a transition towards a more balanced and sustainable approach with an increased focus on regional and global integration. The One Belt One Road (OBOR) composed of the Land-Based Silk Road Economic Belt and the Ocean-Based 21st Century Maritime Silk Road is the main driver of this transition. This paper discusses the vision, scope and the goals of China’s OBOR strategy and potential economic benefits to wider Asia, especially to Sri Lanka. The discussion and analysis rely on secondary sources of data and estimates. The paper argues that the OBOR initiative will positively impact on Sri Lanka’s economic development through: regional connectivity via ports, airports, roads, transmission towers etc.; increased foreign investments into the country; easy access to new export markets; exploration of maritime resources in the exclusive economic zone; and participation in the digital revolution in financial services. However, the downside risks of OBOR strategy can cause geo-political tensions requiring openness and diplomacy by all stakeholders. China – Sri Lanka relations are based on long standing mutual trust, cooperation and friendship. Nevertheless, to reap sustainable benefits form OBOR, the paper recommends that Sri Lanka should have a consistent policy framework comprising a supportive legal and regulatory structure, strong project management and transparent procurement procedure.
Session 04: Business Opportunities
Abstract: “One Belt One Road in South Asia: Opportunity or Threat for Sri Lankan Enterprises” by Lasantha Wickramasooriya
Sri Lanka lies strategically positioned in the middle of the Maritime Silk Road of the One Belt One Road (OBOR) initiative of China. Politicians, scholars, industrialists and the like consider this to be an opportunity to promote the country as a trading and shipping hub in the Indian Ocean. China, which has emerged as the 2nd largest trading partner of Sri Lanka, has been improving here relationship with Sri Lanka over the past few decades, inter-alia providing support in the spheres of economic, national security, health and social sectors. Aligned with the OBOR initiative, China has invested significantly in developing Sri Lanka’s infrastructure and is amongst the top 5 foreign investors today. The OBOR initiative, which aims to connect China with Russia, Asia, Africa and Europe by land and sea routes, plans to promote diversified, independent, balanced, and sustainable development. So, how does the OBOR initiative influence Sri Lanka and its people? On the one hand, Sri Lanka with its strategic location and especially with its preferential bilateral agreement with her giant neighbour India, offers an opportunity for trade and investment for market hungry Chinese industrialists. On the negative side, if Sri Lanka is unable to attract Chinese manufacturers who can transfer technologies to transform some of its unique primary products it possess, the quantum of value added for domestic products will be minimal and thus least possible foreign exchange gain for the country. It can also hurt the domestic industry, in the face of competitive products emerging from China. Sri Lanka therefore has to formulate its national strategy to make the best use of the given opportunity whilst minimising the negatives.
Session 05: Environment and Culture
Abstract: “OBOR and Sri Lanka: Progress, Challenges and Solutions” by Zeng Xianglai
In May 2017, the Belt and Road Forum was held as an effort of China to gather momentum and further promote collaboration with participant countries of One Belt and One Road (OBOR) initiative. Although it’s a pity to notice Sri Lanka was absent in the periodical outcome list, it’s encouraging that the prime minister of Sri Lanka attended the forum and signed a package of bilateral cooperation agreements. Sri Lanka is specially blessed with its unique advantage of geographical location at the crossroad of Indo-Pacific region, which naturally makes it regarded as an important transportation node of OBOR. Even the regime change of Sri Lanka in 2015 had an impact on some major collaborative projects, which were highly expected to be the early fruits of OBOR, the momentum and prospect of bilateral cooperation within the framework of OBOR are still optimistic, mainly because the strategic interests of the two countries matches well and surpasses the divergence and disturbance. Considering OBOR is not only about increasing physical connectivity with the countries along the route, but also cultivating the local markets and cultural exchanges. The two sides should envisage the reality and seeking the right pace to further cooperation. On the one hand, port and shipping industry and crucial auxiliary projects should play the fundamental role in the bilateral cooperation; on the other, to enrich the contents and vitality of the cooperation, the two sides should jointly exploit new sources of growth in cooperation, such as green energy, mobile payment and cultural industry.
Find full paper here: RCSS Conference Papers – OBOR and Sri Lanka- Progress, Challenges and Options