BEIJING, May 28 (UPI) -- China, on the visit of Sri Lankan President Mahinda Rajapaksa, agreed to upgrade ties with the Indian Ocean island nation to strategic cooperation.
China, already a major aid giver to Sri Lanka, will consolidate cooperation in law enforcement, security and defense, and in the application of space technology with that country, the official Xinhua News Agency said.
China's growing influence in Sri Lanka is a source of concern to neighbor India, which has unsettled border disputes and other issues with the communist country. India and China fought a brief border war in 1962.
Rajapaksa, who arrived in Beijing Monday on a four-day visit, met with China's newly installed President Xi Jinping and discussed further strengthening relations on number of areas, Sri Lanka's Colombo Page reported.
The two sides agreed to expand bilateral trade and investment, and accelerate trade facilitation as well as investment and financing cooperation, Xinhua reported.
Colombo Page reported the two sides agreed to set up committees to work toward a free-trade agreement, which would give Sri Lankan products such as apparel, gems and jewelry, tea and rubber wider access in the Chinese market.
China has also pledged support for a number of other projects: water supply schemes in Attanagalla, Minuwangoda and Kurunegala, an international conference hall in Kandy, an arts theater in Anuradhapura and the development of the national hospitals in Colombo and Ragama.
China's state-owned Exim Bank has provided financial assistance to 37 development projects in Sri Lanka in the past seven years, including the Mattala Rajapaksa International Airport, Hambantota Port and the Southern Expressway.
Last March, the bank agreed to lend Sri Lanka $200 million to finance the Matara-Beliatta Section of the Matara-Kataragama Railway extension project.