China-Sri Lanka Economic Relations: Opportunities and Challenges for Sri Lanka

Abstract

This study intends to analyse the growing economic relations between China and Sri Lanka focusing on opportunities and challenges for Sri Lanka. The study used qualitative and quantitative research methods for the subsequent analysis. Descriptive statistical techniques were used to analyse the quantitative data, and critical discourse analysis was used to analyse the qualitative data. The data was presented using texts, tables and figures. The study found that Sri Lanka has gained many opportunities due to close economic relations with China. Sri Lanka is an important location in China’s Maritime Silk Road initiative and China’s string of pearls concept provided lots of economic benefits for Sri Lanka. China become a significant export market, source of foreign direct investment, source of low-cost imports for Sri Lanka, vast infrastructure development of the country and source of the tourism industry in Sri Lanka. China also became a key source of military and diplomatic support for Sri Lanka when needed. Sri Lanka’s economic relations with China present both opportunities as well as challenges. China’s involvement in Sri Lanka has become a possible challenge for Sri Lanka to tackle with big brother India. As well, negative trade balance, huge debts and low investment returns also can be considered as the major challenging areas in which Sri Lanka faced economic relations with China.