About the Interviewee
Prof. Dr. He Hongmei, Director of the Institute of South Asian Studies, Yunnan Academy of Social Sciences, China
As a pillar industry of Sri Lanka, a primary source of foreign exchange earnings and a core sector absorbing employment, the tea sector bears high sensitivity to the country’s national economy at the macro level. China, the world’s largest market with comprehensive and extensive tea consumption and capital capacity, demonstrates robust market absorption capacity and technology spillover effects. This issue features an exclusive interview with a regional economic expert, who draws on industrial economics and international trade theories to conduct an in-depth analysis of how China and Sri Lanka can leverage tea industry cooperation to optimize bilateral economic and trade structures and advance green, sustainable development.
Question 1
Past research on China-Sri Lanka economic and trade relations has largely centered on large-scale infrastructure projects. From a macro perspective of regional economic development, how would you redefine the scope and weight of “tea industry cooperation” within today’s China-Sri Lanka strategic partnership?
Response
This is a pivotal inquiry concerning the shift of pragmatic China-Sri Lanka cooperation toward intensive development. In previous discussions of infrastructure, the focus lay on resolving hard factor constraints hindering regional development. Today’s focus on tea industry cooperation, by contrast, targets intensive growth and livelihood resilience.
Tea is far more than a commodity; it acts as a barometer of Sri Lanka’s macroeconomic stability, directly tied to its foreign exchange reserves, fiscal revenue, and marginal social welfare of millions of grassroots tea farmers. By elevating tea industry cooperation to a priority agenda for bilateral economic and trade ties, China aligns its strategy with Sri Lanka’s pursuit of endogenous growth empowerment, marking a shift from development assistance to fostering self-sustained growth.
This initiative not only addresses Sri Lanka’s urgent priorities of optimizing its trade structure and stabilizing its macroeconomy but also enables the development dividends of the Belt and Road Initiative to trickle down and benefit grassroots social networks across South Asia. It embodies the vision of a China-Sri Lanka community with a shared future in the dimension of people’s livelihoods.
Question 2
Both China and Sri Lanka are major global tea producers. Concerns over homogeneous competition frequently emerge in international trade. How do you assess the strategic potential of deepened tea industry cooperation between the two countries?
Response
There is no absolute zero-sum game in China-Sri Lanka tea industry ties; instead, the partnership features distinctive structural factor complementarity and differentiated synergy.
First, structural disparities in tea product portfolios and domestic consumer markets between China and Sri Lanka underpin strong complementarity. China boasts a complete tea industrial chain covering green tea, oolong tea, white tea and other varieties, supported by a massive, tiered domestic consumer market undergoing continuous consumption upgrading. Sri Lanka’s tea sector, by contrast, concentrates heavily on Ceylon black tea, with standardized, large-scale production that has forged a distinctive niche in the global black tea market. The two sides’ tea varieties entail no direct competition, yielding highly complementary supply and demand.
In recent years, domestic demand for premium black tea has surged in China, alongside explosive growth in the new-style tea beverage sector, creating a vast, expanding incremental market for Ceylon black tea and a highly promising growth driver for Sri Lanka’s tea exports.
Second, cross-border two-way circulation of all industrial chain factors is achievable. Sri Lanka possesses premium native tea plantation resources, alongside mature, universal tea grading standards and geographical indication certification systems. China holds comparative advantages in full-chain digital marketing, deep processing technologies and industrial supporting capital.
Two-way complementarity of technology, capital, premium raw materials and geographical indication brands enables collaborative optimization of the entire tea value chain and generates compound synergistic gains.
Question 3
Traditional agriculture worldwide generally faces a bottleneck of slowing total factor productivity (TFP) growth. In terms of the digital economy and modern industrial governance, what institutional frameworks and methodological insights can China’s experience offer Sri Lanka for the modernization of its tea industry?
Response
China’s practices integrating digital technology with the real economy and advancing industrial upgrading through rural revitalization provide two core macro reference frameworks for Sri Lanka’s tea sector transformation.
First, disintermediation and digitalization of supply chains. Conventional international agricultural trade involves lengthy chains, where value distribution heavily favors transnational middlemen upstream, squeezing profit margins for grassroots tea farmers. China’s mature cross-border e-commerce, direct procurement supply chains and full-chain digital marketing models can help Sri Lanka establish a direct “tea garden to Chinese teacup” distribution network. Such flattened, disintermediated channels will substantially boost the bargaining power of local Sri Lankan tea enterprises and farmers in overall value allocation.
Second, empowering smallholder agriculture through modern organizational models. While I do not engage in specific agronomic practices, macro governance analysis shows China has resolved the contradictions between the fragmentation of smallholder farming and market volatility via a modern industrial governance framework of “policy guidance + cooperatives/leading enterprises + digital traceability”.
China’s systematic methodologies for smart tea plantation development — including macro meteorological disaster monitoring and digital ecological management — can be transferred through bilateral cooperation platforms to enhance the supply resilience of Sri Lanka’s tea industry amid global market fluctuations.
Question 4
Looking ahead as comprehensive China-Sri Lanka pragmatic cooperation advances, what is your vision for the upgraded tea industry cooperation between the two nations?
Response
At this new historical juncture, I hold profound macro expectations for the future of China-Sri Lanka tea industry cooperation. This partnership delivers not merely economic mutual benefit, but also alignment of long-term development strategies. My vision unfolds across three macro scenarios:
First, jointly building a “Smart Tea Silk Road Network” empowered by digital and technological innovation. Our long-term goal is to break traditional trade barriers and information asymmetry, fully integrating China’s mature digital infrastructure and big data marketing capabilities with Sri Lanka’s outstanding tea resource bases across the entire industrial chain. Digital technology will transcend geographical barriers to foster a more efficient, risk-resilient new cross-border tea industrial supply chain ecosystem.
Second, jointly incubating a “green agriculture model” centered on low-carbon and sustainable development. Confronted with shared challenges posed by climate change to island and mountain ecological systems, I anticipate joint research and industrial forces from China and Sri Lanka to embed tea industry cooperation within the broader framework of global ecological civilization construction. Joint research on low-carbon tea plantations and macro coordination on smart meteorological disaster prevention and mitigation will position the age-old tea industry as an innovative demonstration for green transition and sustainable rural development in ecologically vulnerable regions worldwide.
Third, jointly shaping inclusive, open discourse power for Eastern tea civilizations. Rooted in time-honored bilateral friendship, China’s tea culture embodying the philosophy of “harmony without uniformity” resonates deeply with Sri Lanka’s profound tea heritage. I envision both sides leveraging tea as a new cultural medium to foster people-to-people bonds through cultural resonance. Beyond commodity trade, we may collaboratively narrate stories of Eastern agricultural civilizations on the global stage, elevating the core standing of Asia’s characteristic competitive agriculture within global value chains and cultural discourse systems.