Sri Lanka is optimistic over China’s proposal on Myanmar Corridor which will boost the trade between the two countries as well as the trade between Beijing and African nations, a top Sri Lankan official said.
Sri Lanka is looking for all the opportunities to exploit the advantage of its strategic location to earn more foreign revenue and come out of an unprecedented economic crisis. It defaulted sovereign debts last year after declaring bankruptcy and is yet to resume repayments for foreign debts it borrowed earlier.
Chinese President Xi Jinping’s special envoy and State Councilor Shen Yiqin last week at a meeting with President Ranil Wickremesinghe stated that China was prioritizing the extension of the China-Myanmar Economic Corridor to Sri Lanka.
“We are positive about this. The Myanmar Corridor will be a new shipping route, and this is not related to the Asia Pacific region. This will boost Sri Lanka’s trade with China,” a top government source who is aware of Sri Lanka’s response to the Myanmar corridor, told EconomyNext.
The Myanmar Corridor Economic Corridor is an infrastructure development plan for building road and rail transportation from China’s Yunnan province through parts of Myanmar.
The transportation route follows gas and oil pipelines built in 2013 and 2017. At the end of the route, a port and Special Economic Zone is planned at Khaukphyu, a major town in Rakhine State, in western Myanmar.
The largest construction project along the route is the 431 km railway, the project estimated to cost US$9 billion. The new railway would connect to the Chinese railway network in Yunnan.
“The Myanmar Corridor will connect Sri Lanka’s Hambantota port to China’s Chongqing province,” the source said.
“The new corridor will speed up goods transportation between the two countries. It will also speed up good transportation from China to Africa as well,” he said.
China already has a port in Sri Lanka’s Hambantota and is in the process of establishing a 15,000-acre Special Economic Zone surrounding the port.
The island nation’s cabinet also on Monday approved China’s Sinopec’s bid to build a massive oil refinery in Hambantota, mainly for export purposes.
Both countries have already agreed to expedite the implementation of the China-Sri Lanka Free Trade Agreement.