China offered a package of development assistance to Sri Lanka yesterday to boost bilateral ties in trade, culture and investment.

The two countries sealed eight agreements in the fields of finance, infrastructure construction and tourism, and have agreed on the establishment of a Sri Lanka Consulate in Shanghai to facilitate business exchanges between the two nations.

China has also decided to provide a preferential buyer's credit worth US$300 million to Sri Lanka.

According to sources from the Sri Lankan side, these funds will be used for several big development projects.

The major project, the Norochcholai coal power plant, is believed to provide an answer to Sri Lanka's energy need.

The others include a new express rail link between Ratmalana and Katunayake and the Colombo-Katunayake expressway.

The protocols were signed during Sri Lankan President Chandrika Kumaratunga's six-day visit to Beijing, which has accrued far reaching benefits for Sri Lanka.

While meeting Kumaratunga, President Hu Jintao said the two countries have long-standing economic and cultural bilateral links.

Hu said that the Chinese government encourages Chinese enterprises to invest in Sri Lanka in the fields of transportation, power and communication.

He also pledged to continue to offer assistance to Sri Lanka for disaster relief and rehabilitation after the country was hit by tsunami last December, and to help train anti-disaster professionals.

Kumaratunga said her government and people highly appreciate the precious assistance of the Chinese government and people over the past decades.

In related news, a ceremony for the construction of a China-Sri Lanka Friendship Village was held in a tsunami-hit area in southern Sri Lanka on August 22, the Xinhua News Agency reported.

The village, designed to house the displaced and the homeless after the tsunami, will cost US$10 million in donations from the Red Cross Society of China and China Charity Federation, and will be completed in nine months' time.

In Sri Lanka, more than 30,000 people were killed and up to 1 million were displaced by the disaster.

(China Daily August 31, 2005)