Features

Significance of Ceylon-China Trade Agreement of 1952

Published

5 years ago

2021/04/20

by Dr. J. B. Kelegama

Excerpts from the keynote address at the 50 th anniversary celebrations of the historic “Rubber-Rice Pact” between Sri Lanka and China at the BMICH on December 20, 2002

I am honoured by the invitation of the Sri Lanka-China Business Cooperation Council and the Sri Lanka-China Society to deliver today the keynote address on the occasion of the golden jubilee celebrations of the historic Rubber-Rice Pact between Sri Lanka and China signed in December 1952.

I accepted this invitation with alacrity and pleasure, firstly because I have conducted negotiations with China and actually implemented the Agreement over a period of about 12 years in my capacity as a senior government official, secondly, because I have visited China seven or eight times both as a government official and a UN consultant and thirdly, because I have been a student of China’s economic development for many years and written and published several articles on China’s economic and trade issues, under my own name as well as under pen-names.

Further, I had the privilege of speaking on this subject at the death anniversary of Mr. R. G. Senanayake some years back, on the invitation of no less a person than Mrs. R. G. Senanayake herself.

The Ceylon-China Trade Agreement of 1952 was undoubtedly the most useful trade agreement negotiated by Sri Lanka and one of the most successful and durable trade agreements in the world, having been in operation for 30 years. It is therefore useful to assess the significance of the agreement and to refresh our memory regarding the circumstances that led to it and the person who played the key role in bringing it about – R. G. Senanayake.

Rice shortage

1952 was a very bad year for Sri Lanka. Premier D. S. Senanayake had died and Dudley Senanayake had just formed a new government when the country had to face a world shortage of rice.

The Government was committed at that time to provide every adult person with two measures of rice per week at a subsidised price, but rice was not available from the traditional suppliers – Burma, Thailand and Indo-China – and the world market price of rice had risen by 38 per cent between 1951 and 1952.

Sri Lanka was therefore compelled to buy 60,000 tons of rice from the USA and 10,000 tons from Ecuador at high prices, although this variety of rice was not suitable to the Sri Lankan palate. She was however not in a position to buy all the rice she needed at this high price as her foreign exchange resources were limited; besides, distribution of this rice would have pushed the food subsidy bill to intolerable levels.

The country was also facing a foreign exchange crisis in 1952 caused by a dramatic fall in her export prices brought about by the quick end of the Korean War boom. The end of the Korean War and the drastic reduction of commodity purchases by the West – in particular, of natural rubber by the United States – led to a collapse of Sri Lanka’s export prices by 23 per cent between 1951 and 1952.

The price of natural rubber declined by 36 per cent, of tea by 10 per cent, and of coconut oil by 40 per cent. Import prices increased by 8 per cent and terms-of-trade fell by 28 per cent. The trade surplus of Rs. 345 million in 1951 turned into a trade deficit of Rs. 200 million in 1952 and external assets fell by 30 per cent. In this critical situation Sri Lanka attempted to negotiate with the USA for a loan of US$50 million and for favourable prices for rubber exports and rice imports, but failed. The country was facing an unprecedented crisis: she could not find enough rice to feed her people and she had no prospect of a favourable market for her rubber exports.

It was in this grim setting that R. G. Senanayake, the then Minister of Commerce, played his master stroke. He found out that China was prepared to sell rice to Sri Lanka in exchange for rubber. At that time China was unable to obtain rubber as a result of prohibition of rubber exports from Malaya following a UN resolution preventing the sale of rubber to China. Thus China wanted rubber as badly as Sri Lanka wanted rice. R. G. Senanayake was quick to realise the mutual benefits of trade with China, and negotiated the Ceylon-China Trade Agreement or the Rubber-Rice Pact in Beijing towards the end of 1952. He stated in Parliament.

“We waited for foreign aid, foreign assistance. As you know Sir, over and over again, we made appeals for Point Four aid, we waited four long years. We have got in the form of assistance only a cook for the Kundasale Girls’ School. Therefore in these circumstances, it was necessary that we should go where it was possible to get our requirements.”

Opposition

The Agreement was negotiated in the teeth of opposition from some of his own colleagues in the Cabinet. Indeed, the opposition of J. R. Jayewardene, the Minister of Finance, was well known. The Cabinet was advised by the newly created Central Bank under an American Governor. Opposition also came from R. G. Senanayake’s predecessor in the ministerial post, from the American Government, and from some of the local newspapers which carried on a virulent press campaign against any dealings with Communist China. S. P. Amarasingham’s informative book “Rice and Rubber: The Story of China-Ceylon Trade” provides a detailed account of the strong opposition R. G. Senanayake had to face in negotiating the Agreement.

The American Government invoked the Battle Act which prevented it from giving aid to countries selling strategic materials to Communist countries and cut off aid to Sri Lanka. In addition, she stopped selling sulphur needed by Sri Lanka’s rubber plantations. This was the price that had to be paid for trading with China.

Prime Minister, Dudley Senanayake, however, fully backed his Minister of Commerce and was prepared to pay this price; he realised that the benefits to Sri Lanka from the agreement far outweighed losses consequent to the cutting-off of American aid. He argued:

“Ceylon’s old trade pattern has been knocked out by changes in the world market and we have to seek new markets for our needs of essential foodstuffs and for our exports.”

Rebutting the charges that the Trade Agreement was opening the door to communist influences in Sri Lanka, he pointed out:

“Communism thrives in many places not through an understanding of that particular ideology but through poverty and want. I am confident that our Trade Agreement with China will instead of opening doors to communism help us to stand firmer against it.”

It is a tribute to the two Senanayakes that they displayed remarkable pragmatism and courage in negotiating the Trade Agreement. They did not allow their prejudices or ideological considerations to stand in the way of deciding what was in the best interests of the Country; nor were they intimidated by threats of big powers.

R. G. Senanayake stated:

“I have always held the view that political ideologies should not stand in the ways of countries trading with each other if that trade is to their mutual advantage.”

He foresaw as far back as 1952, the emergence of China as a world power. He stated in a speech: “Talking of China in particular, it would be unrealistic to ignore a nation of 500 million in our continent with a united and cohesive government for the first time in many centuries. She is bound to be a major factor in world trade.”

As he foresaw, China has now become the seventh largest exporter in the world and the largest trader among developing countries whose purchases and sales influence the world markets. In 2000 for instance, her exports were US$249 billion and imports US$225 billion. If we include Hong Kong’s trade with China (as the greater part of Hong Kong’s trade is entrepot trade with China) then China becomes the fourth largest exporter in the world after the USA, Germany and Japan, its exports amounting to $452 billion.

The Agreement

The Trade Agreement signed in 1952 was for five years and renewable; there was, however, an annual Trade Protocol specifying the quantities of commodities to be exchanged in the ensuing year, which had to be negotiated every year. The trade was based on barter – exports and imports to balance every year; only the outstanding balance at the end-of-the-year was to be settled in foreign exchange.

Trade however was rarely balanced in the following years but the outstanding balance was generally carried forward to the next year without settlement in foreign exchange.

In the first part of the agreement there were specific commitments by Sri Lanka to purchase rice, and for China to buy rubber; the values were to balance. Thus in 1953, Sri Lanka agreed to buy 270,000 tons of rice from China which in turn agreed to purchase 50,000 tons of rubber; these quantities were exchanged on the basis of world market prices and were equal in value. In addition, China agreed to pay a premium price for rubber over the world market (Singapore) price and further, handling charges for rubber exports in Colombo.

Thus in 1953, China paid for Sri Lanka rubber Rs. 1.74 per lb. whereas the average world market price was Rs. 1.05 per lb. This premium varied with every five-year agreement. The handling charge which was fixed at five cents per lb. too varied in subsequent years. China also agreed to supply rice to Sri Lanka below market prices – at 54 pounds or Rs. 720 per ton in 1953.

Thus Sri Lanka benefited both ways from the agreement. The second part of the agreement covered trade in other commodities – those Sri Lanka and China wanted to buy and sell – but without specific commitments; the total value of exports and imports however were expected to balance every year. In view of the substantial mutual benefits, the Trade Agreement was renewed every five years by R. G. Senanayake’s successors in his ministerial post – in 1958, 1962, 1967, 1972 and 1977 – and was wound up, in the sense that the barter element was given up, in 1982 when it was found that the barter of rice and rubber was no longer in mutual interest. Sri Lanka had almost reached self-sufficiency in rice and needed only very small quantities from abroad while China was able to purchase rubber from several rubber producing countries without restriction and without paying a premium.

R. G. Senanayake paid an important tribute to China after negotiating the Trade Agreement, when he concluded his Cabinet paper on the subject in the following words:

“We noted on the Chinese side the absence of the spirit of bargaining and haggling on comparatively small points. On the other hand, they gave us the impression of being large-minded and forthright in their dealings.”

I can confirm this as I conducted trade negotiations with China over a dozen times. Benefits

The significance of the Ceylon-China Trade Agreement lies in the positive benefits Ceylon received during the thirty years of its duration. Those benefits exceeded expectation as China expressed her gratitude to Sri Lanka for supplying her rubber when other rubber producers were not prepared to do so and in spite of the opposition and denial of aid by the US Government. These benefits are discussed in detail below.

(1) The premium over world market price for rubber was estimated between Rs. 68 and Rs. 95 million in 1953 alone. It was about 56 per cent more than the world market price in that year. No estimates are available for successive years, but the premium was substantial, for even a ten cents premium meant Rs. 200 per metric ton and Rs. 10 million for 50,000 tons.

(2) The handling charge of 5 cents per lb., in 1953 was equal to Rs. 100 per metric ton or Rs. 5 million for 50,000 metric tons of rubber. As the charge and quantity varied from year-to-year the total sum too changed, but it was significant.

(3) The sale of rice by China to Sri Lanka at prices below the world market resulted in a net benefit of about Rs. 92 million in 1953 alone. Although there was a net benefit in the following years, no estimates have been made. China agreed to sell rice at the same price Burma sold rice to Sri Lanka with certain adjustments for differences in quality and transport costs. China never tried to exploit the rice market to her advantage.

Even when she did not have an exportable surplus, she supplied Sri Lanka with rice direct from Burma under a triangular trade arrangement, but charged us only the price she paid Burma – not a cent more – even when she had reason to charge something more.

(4) As a result of the agreement a grant of about Rs. 125 million was extended by China during the ten-year period 1958-68 to meet part of the costs of rubber replanting. Thousands of acres of uneconomic rubber land were replanted thereby revitalizing our rubber industry.

(5) China continued to purchase Sri Lanka’s rubber at a premium even when other markets were prepared to sell her rubber at lower prices.

(6) Sri Lanka found an assured market for her rubber and an assured source of supply for her rice and insured herself to a great extent against vagaries in the world market. She also diversified her export and import markets.

(7) The Trade Agreement benefitted the Ceylonese traders as against non-national traders by creating a new market for them. In spite of the opposition from non-national trading establishments – particularly British managing agency houses – R.G. Senanayake reserved the export of rubber to China for the Ceylonese traders. He also reserved China for the Ceylonese importer under his policy of Ceylonizing the external trade of the country.

(8) The Trade Agreement laid the foundation for expanding trade between Sri Lanka and China even after the barter agreement ceased to operate. In 2001 for instance China and Hong Kong (which mainly re-exports China’s products) constituted the largest supplier of imports valued at Rs. 64 billion to Sri Lanka.

(9) Economic co-operation between Sri Lanka and China began with the Trade Agreement. It was expanded by leaps and bounds with establishment of diplomatic relations with China by S.W.R.D. Bandaranaike and closer relations under Sirimavo Bandaranaike as symbolised by the Bandaranaike Memorial International Conference Hall (BMICH), textile mills at Veyangoda and Pugoda, other grants and interest-free loans. Economic co-operation thereafter is demonstrated by the superior courts complex, Gin ganga scheme and assistance to restore Abayagiri dagaba.

(10) The Ceylon-China Trade Agreement with its price concessions for both Sri Lanka’s exports and imports and assistance to rubber replanting by China was perhaps the first instance of a developing country giving economic assistance to another developing country. In other words, it was the first time where economic co-operation among developing countries or South-South co-operation took place.

(11) Finally, Ceylon-China Trade Agreement and closer commercial and economic relations laid the foundations for a firm friendship between Sri Lanka and China, which was strengthened, expanded, and cemented by the Bandaranaike governments. China’s friendship for Sri Lanka has been demonstrated not only in trade and economic co-operation but also in times of national crisis. There was only China to warn other countries to ‘keep their hands off Sri Lanka’ at the height of the Indo-Lanka crisis in June-July 1987. This friendship was demonstrated again thereafter by the visit of Prime Minister of China and his offer of Rs. 375 million in economic assistance.

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Features

US’ anti-migrant stance set to intensify tensions in Western camp

Published

6 hours ago

2026/06/11

Sahan Weerasooriya

Migrant boats land on Western beaches. Credit: PA

The announcement by the US authorities of an anti-migrant stance during a recent commemoration in France of the epochal D-Day Landings of June 6, 1944, ought to strike impartial observers as a supreme irony. Whereas what should have been expected was a vibrant celebration of the beginning of the process of Western Europe freeing itself decisively from Nazi or fascist control during the crucial stages of World War Two, this was not to be.

What the world heard instead was a call to contemporary Western Europe to arm itself against a seemingly rising and threatening migrant presence in the region. In other words, the migrant must be despised and ‘shown the door’.

Instead of a commemoration that rejoiced in the flourishing of liberal democracy and its values what one got was a strong affirmation of fascism and racial chauvinism. US Defense Secretary Pete Hegseth vented his spleen against the migrant or foreigner presence in Europe reportedly thus: ‘Sadly today different European beaches are stormed by different dangerous ideologies.’ To ‘beaches in Spain and Italy and Greece and Bulgaria, boats and men arrive. When will European capitals do something about that invasion?’

While at the outbreak of World War Two it was Nazi Germany that was doing the invading and bringing some principal European countries under its suzerainty, this time around we are being given to understand that it’s migrants to the West who are seeking to colonize the latter. It goes without saying that such inflammatory rhetoric would have the deleterious effect of keeping racial tensions alive in the West and jeopardize all possibilities of the countries concerned cementing and maintaining social stability.

The Trump administration gives the impression of taking a leaf from the politically underdeveloped regions of the South to keep the US polity stable and united. In South Asia, for instance, we are not short of ambitious demagogues who use what is referred to as the ‘race card’ to gather unto themselves a following and thereby further their political fortunes. By seeking to stir and sustain anti-migrant hysteria, the Trump administration is also essentially replicating Nazi Germany’s policy of anti-Semitism. That is, fascism is very much alive in the US under President Trump.

Such efforts at churning racial hysteria at this juncture in the US should not come as a surprise. For all intents and purposes, the Trump administration is nowhere near achieving its aims in West Asia, for instance, in the short term. It has failed to bring Iran down to its knees, as it hoped to do, but is adopting the expedient of keeping the world guessing and confused on what it is doing in the region, since it cannot withdraw from the theatre in a hurry without losing face.

While perhaps working out an escape strategy the Trump administration it seems, is hoping to maintain its following at home intact and silent by playing on their racial biases and insecurities. Hence, the anti-foreigner campaign.

Simultaneously, the Trump administration will need to keep a close eye on how economic pressures on the domestic front are panning out. Anti-administration sentiments first break to the surface at meal tables. On this score, the news cannot be good because the average US family’s spending power ought to be shrinking on account of rising energy and oil prices. Consequently, it would not be a bad idea to keep the attention of the US consumer diverted by adeptly playing ‘the race card’; once again, lessons from intellectually bankrupt Southern politicians are coming in handy.

To be sure such comparisons many politicians in vibrantly democratic countries would find quite unflattering. But the stark truth is that racism cannot be tolerated in civilized societies and those politicians who resort to it risk being branded as racists of the first degree. In fact they could be seen as being on par with the likes of German dictator Adolph Hitler and his close collaborators.

However, on the question of migrant policy the Trump administration would likely be at polar opposites with the most vibrant of liberal democracies of the West. This will be the case with the UK, France and Italy for instance. The latter continue to keep their doors open to legal migrants and they are likely to view a virtual blanket ban on migrants as reprehensible.

Moreover, in the foremost democracies of the West debates are vibrantly ongoing on the need to keep racism or any hint of it completely outlawed in the public plane. There is the case of the UK, for instance, where the authorities continue to emphatically pinpoint their adherence to the principle of anti-racism in the conduct of public affairs.

One proof of the above was the parliamentary debate relating to the killing of 18-year-old Henry Nowak in Southampton. Police handling of the victim came in for sharp scrutiny by particularly the opposition in the House of Commons but there seemed to be a consensus over the main political divide that the matter should not be politicized.

Moreover, the UK authorities stressed in the House the government’s strict adherence to the policy of non-racism. It was also pointed out that British institutions set up to manage racism at the national, county and neighbourhood levels, for example, were very much intact. In fact, Sri Lanka could gain considerably by studying and implementing locally, legislation modeled on the relevant UK laws if it is in earnest when it speaks of ‘reconciliation’.

Accordingly, it is highly unlikely that Western Europe would ‘cave in’, so to speak, to US pressure on issues related to migration. The liberal democracies of Western Europe in particular would remain for the foreseeable future migrant-welcoming, multi-ethnic and plural democracies.

Nor is it likely that Western Europe would be passively receptive to US demands that it drastically increases its defense spending to meet the latter’s demands. Within the Western fold the EU is remaining committed to backing Ukraine, for instance, in its ongoing armed resistance to the Russian invasion and it is not giving any indication of being deferent to US pressure.

However, although tensions would continue to bristle within US-Western Europe relations on the above and numerous other matters of contention it would be far too premature to announce a parting of company between the two sections of the West. In that sense, the post-World War Two order remains essentially intact. There are still many things in common between the two, particular on the economic plane, that will ensure the continuance of the partnership.

Features

A decade among Yala’s ghosts of gold

Published

6 hours ago

2026/06/11

Sahan Weerasooriya

YM75 "James" surveys his territory from a tree-top vantage point, demonstrating the leopard's commanding presence in the landscape.

The first rays of dawn creep over the ancient rocks of Yala. The Indian Ocean glimmers in the distance, and the wilderness slowly awakens. Somewhere amid the scrub jungle, a pair of amber eyes scans the landscape.

For wildlife conservationist and leopard researcher Milinda Wattegedara, moments such as these have defined more than a decade of dedication to one of Sri Lanka’s most iconic creatures—the Sri Lankan leopard.

What began as fascination evolved into a remarkable conservation journey that has transformed the understanding of Yala’s leopard population and placed Sri Lanka firmly on the global wildlife research map.

“Long before I ever lifted a camera, leopards had already captured my imagination,” says Wattegedara. “What fascinated me was not merely their beauty but the complexity of their lives—their hunting strategies, movements, reproductive behaviour and their remarkable ability to adapt to changing environments.”

That fascination led to the birth of the Yala Leopard Diary in 2013, an ambitious long-term project dedicated to documenting individual leopards and unraveling the mysteries surrounding their lives.

For many visitors, a leopard sighting is a fleeting thrill. For Wattegedara and his team, every encounter is a chapter in an ongoing scientific story.

“Each photograph was never the end of an encounter,” he explains. “It was the beginning of deeper questions. How did a particular leopard use the landscape? How did its behaviour change with the seasons? What environmental pressures shaped its decisions?”

These questions drove years of meticulous fieldwork. Every sighting was carefully recorded with details including location, habitat, behaviour, date and time. Photographs were analysed to identify individual animals through unique spot patterns, allowing researchers to distinguish one leopard from another with remarkable accuracy.

What followed was groundbreaking.

YF77 “Shelly” pauses in quiet observation, embodying the alertness
and grace that define Yala’s leopard population.

From 2013 to 2026, the Yala Leopard Diary identified an astonishing 189 individual leopards within the Yala Block 1. The research revealed a leopard density of approximately 0.524 leopards per square kilometre, making Yala one of the highest leopard-density landscapes ever recorded anywhere in the world.

Such findings have elevated Yala’s status among global wildlife researchers.

Nestled between the Indian Ocean and a mosaic of habitats, ranging from rocky outcrops to dense scrub forests, Yala offers an ecological stage unlike any other.

Here, leopards are photographed silhouetted against ocean horizons, perched atop ancient granite formations, resting on tree branches and stalking prey across sunlit grasslands.

The images tell stories of extraordinary lives.

There is Haminee, a devoted mother navigating the challenges of raising cubs in a competitive landscape. There is Lucas, one of Yala’s most frequently documented males, striding confidently across the Gonalabba Plains with the vast ocean forming an unforgettable backdrop.

There is Ruki demonstrating the species’ incredible strength by hoisting prey onto branches, and Shelly, quietly surveying her surroundings in a moment of feline vigilance.

Together, these individuals have become familiar characters in a living wilderness drama.

YM31 “Ruki” secures prey on a branch, illustrating the remarkable strength and coordination of the Sri Lankan leopard.

Recognising the immense value of long-term documentation, Wattegedara joined forces with fellow researchers Dushyantha Silva, Raveendra Siriwardana and Mevan Piyasena to establish the Yala Leopard Centre in 2020.

Located at the Palatupana entrance to the Yala National Park, the centre is believed to be the world’s first information facility dedicated exclusively to leopards.

“The centre serves as a repository of knowledge, accumulated through years of observation and research,” Wattegedara says. “Our goal is to connect visitors with the science behind conservation and foster a deeper appreciation of these magnificent animals.”

The project’s impact extends far beyond Sri Lanka’s borders.

Research arising from the Yala Leopard Diary has been published in internationally recognised scientific journals. One study introduced an innovative framework for identifying individual leopards, while another documented an extraordinary and previously unrecorded case of a leopard cub being consecutively adopted by two different adult females—first a relative and later an unrelated leopardess.

The discovery attracted international scientific attention and highlighted the complexity of leopard social behaviour.

Yet for Wattegedara, the most important lesson remains one of humility.

“One conclusion has become increasingly clear,” he reflects. “Our understanding of these leopards remains far from complete. We are only beginning to understand how they live, adapt and persist in one of Sri Lanka’s most dynamic protected landscapes.”

YF15 “Hope” descends Rukvila Rock at dawn, showcasing the agility and adaptability of Yala’s leopards.

His words underscore an essential conservation truth: the more we learn about nature, the more mysteries emerge.

As Sri Lanka navigates growing environmental challenges, the Yala Leopard Diary stands as a shining example of what sustained observation, scientific curiosity and public engagement can achieve.

Beyond the stunning photographs and remarkable sightings lies something even more valuable—a growing body of knowledge capable of informing future conservation decisions and ensuring that future generations inherit a wilderness where leopards continue to roam free.

For more than a decade, Wattegedara and his colleagues have followed the tracks of Yala’s elusive predators through dust, rain and scorching heat.

Their work has revealed that every leopard has a story, every sighting has significance and every photograph can contribute to conservation.

And perhaps, most importantly, it has reminded us that the golden ghosts of Yala still have many secrets left to share.

By Ifham Nizam

Features

Glamour, music and community spirit …

Published

6 hours ago

2026/06/11

Sahan Weerasooriya

Sri Lankans are quite active, all around the globe.

News has just come my way, from Glasgow, in Scotland, where the glamour of masks, music, dancing, and community spirit, came together, in spectacular fashion, at Masquerade Night, bringing together members of the Sri Lankan community for an evening filled with music, fashion, food and entertainment.

Organised by Mahesh Balaaratchi (DJ Mowgli) together with Sulochana Asmone, Hiroshini, Prasad, Ashi, and Shawn, the evening provided guests with an opportunity to socialise, enjoy live entertainment, and celebrate in a unique and elegant setting.

Guests arrived from 6:00 pm, dressed in formal attire and decorative masks, creating a colourful and vibrant atmosphere throughout the venue.

DJ Mowgli: The main
organiser of
Masquerade Night

There was a delicious selection of Sri Lankan cuisine and street food, which proved popular throughout the evening.

The buffet offered a variety of traditional favourites, giving attendees a taste of home while adding to the festive atmosphere.

Entertainment was provided by DJ Mowgli, whose performance kept the audience engaged throughout the night. His playlist featured a mixture of popular favourites, dance classics, and cultural music, remixed for a younger generation.

One of the highlights of the evening was the Baila session, which brought a distinctly Sri Lankan flavour to the event.

The Baila segment highlighted the importance of preserving and celebrating cultural traditions, while bringing people together through music and dance.

As familiar rhythms filled the room, guests enthusiastically took to the dance floor, creating one of the most memorable moments of the night.

The crowd was described as lively, energetic, and welcoming, with attendees embracing the spirit of the masquerade theme while enjoying the opportunity to reconnect with friends and meet new people. The family-friendly atmosphere ensured that guests of all ages could take part in the celebrations.