The tropical island paradise of the Maldives and Asia’s wealthiest economic power, China, have recently signed a Free Trade Agreement (FTA) during a state visit in which the Chinese President, Xi Jinping, had met the Maldivian President. It is the second country in South East Asia, after Pakistan, to do so.
Over the years, the Maldives has become ever so close to the Chinese government and its people, as the annual tourists consisting of middle-class Chinese have been on the rise.
Beijing has further invested hundreds of millions in infrastructure development projects across the Maldives to support the country’s advancement goals.
With this Free Trade Agreement, it will not only create new opportunities for both countries, but
also provide Maldivian businesses with the high-in-demand access to Chinese banks. This will facilitate the necessary capital for small businesses.
The Maldives is one of the world’s most expensive and sought-after travel destinations, with the number of travel agencies steadily growing every year. As a result, there are much-needed opportunities for these companies to reach big markets like China. As the Maldives-China FTA takes effect, travel agencies from the Maldives will now be able to legally operate in three key Chinese cities.
The Maldives government is encouraging local entrepreneurs to expand into other business sectors, including manufacturing and export. The FTA will provide an added advantage to in these areas, whereby, over 290 product types are to be exempted from import duties into China.
On the other side of this, many of the ‘made in China’ products will also be exempted from import duty charges in the Maldives. Economic analysts predict that this will aid in significantly lowering the prices of consumer goods. This, in turn, is expected to boost the local consumer goods industry since some Asian travelers have complained about the lack of cheap shopping alternatives, which was noticed during their trips.
Most Maldivians view China as the long-term trade partner that it always needed, but never had. The Maldivian people from all walks of life now enjoy new roads, parks, housing, and other developments that were accomplished through the growing friendship between the two countries.
One of the largest projects that will have a significant, positive impact on the country’s economy is the China-Maldives Friendship Bridge.
There are some figures that have voiced their concerns over the growing influence of China on the Maldives. However, these concerns do not seem to carry much public support due to the fast pace of infrastructural achievements that are seen today by hundreds and thousands of Maldivians.
Maldivians might have to wait a few more years to witness the long-term economic prosperity that awaits them through the FTA. However, what is undeniable is that in the past few years, China did achieve what India, Europe, and the United Kingdom could not in the previous decade.
In addition to the FTA, the Maldivian government has shown continuous support for the participation in the 21st century maritime Silk Road, proposed by China. Both governments have also agreed to further improve their cooperation in the areas of maritime environment, fisheries, and tourism.