Category: Breaking News

China’s ambassador to Sri Lanka has welcomed the country’s improving investment climate while making clear that bureaucratic inefficiency and inconsistent policy implementation continue to stand in the way of the island reaching its full potential as an investment destination.

Speaking to journalists and think tank representatives in Colombo, ambassador Qi Zhenhong said Sri Lanka urgently needs dedicated one-stop shops for investment approvals and should look to modernise the process, citing Shanghai as a model where foreign investors can complete the entire approval process online without setting foot in China.

He acknowledged that government initiatives such as Clean Sri Lanka and the Digital Economy programme contain the right ingredients for a stronger investment environment, but warned that good intentions alone are not enough.

“Shortcomings typically arise from a failure to account for operational realities,” he said, highlighting a persistent gap between policy goals and their practical implementation.

The Chinese ambassador backed his concerns with a telling example, recounting how a Chinese investor hoping to set up an AI and robotics-powered smart fuel station in Colombo was unable to find suitable land to get the project off the ground.

On the relationship between the two countries, the ambassador struck an optimistic tone.

He said that China would shortly provide Sri Lanka with 100 electric buses for public transport, and reaffirmed Beijing’s commitment to continued assistance, referencing recent support extended in the aftermath of Cyclone Ditwah.

The ambassador also used the occasion to brief his audience on the outcomes of China’s recently concluded “two sessions”, (annual meetings of the NPC and the Chinese People’s Political Consultative Conference), describing 2026 as a landmark year marking the start of China’s 15th Five-Year Plan.

He recalled China’s economic trajectory over the past five years, noting that GDP had grown at an average annual rate of 5.4%, consistently contributing around 30% to global economic growth.

In 2025 alone, China’s GDP reached the equivalent of over USD 20 trillion, with total goods trade surpassing USD 6.5 trillion.

He added that China has been the world’s largest producer and seller of new energy vehicles for ten consecutive years.

Ambassador Qi said China had set a GDP growth target of between 4.5% and 5% for 2026, with the next five-year plan placing a strong emphasis on high-quality development, digital industries, and research and development investment.

Addressing rising global tensions, the ambassador described China as a stabilising force for world peace, and reiterated president Xi Jinping’s vision of building a community with a shared future for humanity.

“Walking with China means walking with opportunities,” he said, adding that China’s continued growth would inevitably bring new possibilities for Sri Lanka and deliver greater benefits for the people of both nations.

Sri Lanka Podujana Peramuna (SLPP) MP Namal Rajapaksa expressed his views on the attack on the Iranian vessel IRIS Dena near Sri Lankan waters while addressing the India Today Conclave held in New Delhi.

He stated that the incident could be considered illegal and that it violates long-standing conventions governing conduct in the Indian Ocean.

Rajapaksa also called for renewed cooperation through regional frameworks such as the Colombo Security Conclave and maritime domain awareness initiatives, noting that India should play a leading role in safeguarding stability in the Indian Ocean.

He also criticised reports that the United States State Department had urged Sri Lanka not to repatriate Iranian nationals.

Rajapaksa stressed that Sri Lanka must retain the right to make decisions based on its own national interests.

Sri Lanka has started talks on possibilities of buying Russian oil after the United States eased the sanctions on fuel purchase from Moscow, the island nation’s Foreign Minister’s office said.

The U.S. issued a 30-day waiver for countries to buy sanctioned Russian oil and petroleum products stranded at sea, in a bid to stabilise global energy ‌markets roiled by the Iran war waged by Washington and Israel.

Sri Lanka’s move came at a meeting between Sri Lanka’s Foreign Minister Vijitha Herath and Russian Ambassador Levan S. Dzhagaryan, the Foreign Minister’s office said.

“…as another step to maintain Sri Lanka’s fuel supply, Minister Vijitha Herath discussed the possibility of purchasing Russian fuel with the Russian Ambassador,” the Foreign Minister’s office said in a statement.

WThe ambassador agreed to immediately inform the Russian government of Sri Lanka’s request. He also promised to coordinate with the relevant institutions and make the necessary arrangements for this.”

Sri Lanka’s decision to explore Russian oil comes as the island nation raised the fuel prices as a deterrent to prevent over usage amid limited supply options.

“During the discussion, the Russian Ambassador pointed out that Sri Lanka will receive Russia’s support whenever it needs it.”

Before 2012, Sri Lanka had been mainly relying on Iranian light crude which could be used it its only 57-year old refinery built by Iran.

However, the island nation was forced to stop Iranian crude imports after the 2012 U.S. sanction on Iran oil.

Later it switched to Murban crude from the UAE and was compelled to increase refined oil imports.

The outbreak of the “Iran War” in late February 2026 has severely impacted global oil trade with Iran threatened to attack oil shipments from the U.S. or its allied.

Donald Trump, the U.S. President, was able to tap into Venezuelan oil after engineering a dramatic regime change before the Iran attack.

A team of representatives from the International Monetary Fund is scheduled to visit Sri Lanka later this month.

Dr. Anil Jayantha Fernando stated that the visit will involve review discussions ahead of the sixth tranche of the IMF Extended Fund Facility provided to the country.

The IMF has so far released five tranches to Sri Lanka.

During the visit, the steps taken by the government in accordance with IMF conditions for the country’s economic performance will be comprehensively reviewed.

Dr. Anil Jayantha Fernando added that necessary agreements will be made regarding the release of the sixth tranche following the review.

Sri Lanka faces a potentially severe economic hit from the Middle East conflict, with a leading economist warning that the country could lose billions of dollars in remittances, export revenue and tourism income if the fighting continues to escalate.

Prof. Priyanga Dunusinghe, head of the Department of Economics at the University of Colombo, said the stakes for Sri Lanka were particularly high given the country’s deep dependence on the region.

More than one million Sri Lankans work in the Middle East, he noted, accounting for around 70 percent of the country’s migrant labour force.

Remittances from the region total approximately USD 3.5 billion dollars annually, roughly half of Sri Lanka’s total remittance income of USD 7-8 billion dollars each year.

“If this Gulf conflict continues, there is a high risk to foreign inflows to the country,” he said.

The export sector faces additional pressure. Between six and eight percent of Sri Lanka’s exports, including tea, rubber and spices destined for markets such as Saudi Arabia and Qatar, are sold to the Middle East.

Prof. Dunusinghe estimated the potential loss to the export sector at around USD 1.4 billion.

Oil prices compound the concern further. Global crude prices crossed USD 100 per barrel on 08 March for the first time since the Russia-Ukraine war, briefly reaching around USD 115 the same day.

He noted that domestic fuel prices could rise from around Rs. 290 rupees to Rs. 370 per litre if the conflict escalates, driving inflation and significantly increasing Sri Lanka’s import bill.

In the most serious scenario, he observed that declining inflows could threaten the country’s ability to maintain adequate foreign reserves, potentially undermining debt repayments and pushing the economy toward instability.

He warned that without an early resolution to the conflict, the consequences for Sri Lanka could be devastating, and urged the government to take measured action on fuel pricing now rather than wait for the full weight of the crisis to arrive.