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Wednesday October 14th, 2026

China’s Xi insists new Silk Road runs both ways as Italy signs up

AFP – Chinese President Xi Jinping sought Friday to allay Western unease over his new Silk Road initiative by emphasising the vast infrastructure project’s two-way nature as he kicked off a whistlestop European tour in Rome.

Italy has rolled out the red carpet for Xi, who will on Saturday sign a memorandum of understanding for Rome to join the $1 trillion Belt and Road Initiative despite misgivings in Washington and Brussels.

Italy will be the first of the Group of Seven most-developed nations to sign up for the new Silk Road, which critics say is "predatory" and overwhelmingly favours China and Chinese companies.

"Between us, there is no fundamental conflict of interest," Xi told journalists after talks with his Italian counterpart Sergio Mattarella.

"China wants commercial exchanges to go both ways and for investment to flow in both directions," Xi said.

Mattarella said that business must go "in both directions… with fair competition, respecting intellectual property rights and while fighting counterfeit goods".

– Salvini snub –

Around 1,000 extra police have been deployed around Rome for the state visit before Xi heads to the Sicilian city of Palermo, where his singer wife Peng Liyuan reportedly wants to see the Teatro Massimo opera house.

In what some perceived as a snub, Italy’s far-right Deputy Prime Minister Matteo Salvini said he would not attend Friday’s state dinner for Xi at Mattarella’s Quirinal Palace.

Salvini has said Italy would be "no-one’s colony" and urged caution about using telecom Chinese giant Huawei’s next generation 5G mobile technology, while his coalition partner Luigi Di Maio is keener for Chinese partnerships.

The United States has warned European allies that Huawei could use its 5G technology as a "backdoor" for spying, a claim that China has strongly rejected, calling them "abnormal, immoral" attacks.

NATO member Italy’s plan to join China’s ambitious maritime, rail and road venture has raised eyebrows among Western allies and within Italy.

"Today we say ‘Italy first’ in trade relations, while remaining US allies, in NATO and in the EU," Deputy Prime Minister Di Maio of the anti-establishment Five Star Movement said on the sidelines of a China-Italy business forum on Friday.

– ‘Vanity project’ –

Debt-ridden Italy is technically in recession and keen to have more business with China.

White House official Garrett Marquis last week tweeted that there was "no need" for Italy to endorse "China’s infrastructure vanity project".

Xi’s visit comes a week after the European Union released a 10-point plan outlining a shift to more assertive relations with Beijing, warning that China was a "rival" to the bloc as well as its biggest trading partner.

France on Thursday announced that President Emmanuel Macron will hold trade and climate talks on Tuesday with Xi, German Chancellor Angela Merkel and European Commission president Jean-Claude Juncker.

In Brussels, Italian Prime Minister Giuseppe Conte on Friday briefed EU leaders about Italy’s Silk Road MoU, where Merkel said: "As he (Conte) described it, I don’t think I have anything to criticise, for now.

"But we have of course already said that it’s better to act uniformly," she said.

Macron, who is at loggerheads with Italy’s populist government, said: "It’s not a good method to discuss new Silk Road agreements bilaterally." 

Friday’s Brussels summit also laid the foundations for Europe-wide policies ahead of a much-anticipated China-EU summit on April 9 in the Belgian capital.

"For the first time there is a will to coordinate," Macron said.

The European Commission will before the end of the year come up with a broad proposal for the EU’s "industrial future", including measures on commerce, competition and hi-tech.

Beijing is particularly interested in investing in Italian ports to help funnel its products into Europe, amid warnings that Rome must avoid the model of the Greek port of Piraeus, which was taken over by Chinese shipping giant Cosco in 2016.

Supporters of the non-binding memorandum of understanding said that it will lead to China complying with European Union standards, including on the environment and intellectual property, and cannot be compared to debt-inducing deals Beijing has signed with developing countries.

Despite apparent warming ties, Xi is not expected to meet Pope Francis. 

The Vatican has diplomatic relations with Taiwan and not Beijing, so the encounter would be unlikely despite an agreement on appointing bishops in China signed last year.

Xi heads to Monaco on Sunday and then on to France to cap his European tour.

Sri Lanka’s Standard Capital exits loss-making paints subsidiary

ECONOMYNEXT — Sri Lanka listed investment company Standard Capital has disposed of its stake in subsidiary Standard Paints (Pvt) Ltd for a nominal consideration of 1650 rupees, saying the move would improve its financial position as the subsidiary carried a negative equity value.

In a disclosure to the Colombo Stock Exchange, Standard Capital said its board had previously decided on August 24, to either strike off the subsidiary or dispose of its equity stake for a nominal value.

The company subsequently sold its holdings in Standard Paints on September 28, comprising a 65 percent stake represented by 6.5 million ordinary voting shares and 100 percent of the subsidiary’s 10 million preferential shares.

The shares were disposed of for a total consideration of 1650 rupees. (Colombo/Oct14/2026)

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Global borrowing costs rise as bond yields increase: Fitch

Fitch Ratings-London: The recent sharp and widespread increase in government bond yields represents a significant increase in real global borrowing costs.

Bond yields have risen to multi-decade highs in the US, Germany, UK and Japan in recent weeks, as highlighted in Fitch Ratings’ latest Economic Monitor chart pack.

Ten-year government bond yields have risen in major global markets since the previous Fitch-20 Economic Monitor in June. US yields averaged 4.99% in September, up from 4.47% in June; 3.50% from 3.00% in Germany;
5.46% from 5.06% in the UK; and 2.99% from 2.65% in Japan. In Korea there also was a marked increase, with yields averaging 4.45% from 4.18% in June.

The chart pack highlights another notable development: the pick-up in world trade growth, driven by an IT investment boom that has boosted capital goods imports in the US. Trade growth has surged in several countries, including Mexico, Korea, Canada and Indonesia.

The quarterly ‘Fitch-20 Economic Monitor’ (formerly ‘20/20 Vision’) chart pack covers the 20 major economies (the Fitch-20) that are the focus of Fitch’s Economics team’s global macro analysis, and plots five years of high-frequency economic data for 20 variables, with consistent coverage across each country.

‘Fitch-20 Economic Monitor: September 2026’ is available by clicking the link above or at www.fitchratings.com.

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Sri Lanka to get $100mn ADB loan to strengthen skills training

ECONOMYNEXT – Sri Lanka’s cabinet has approved obtaining a 100 million dollar results-based loan from the Asian Development Bank (ADB) to implement a Skills Development System Transformation Programme aimed at strengthening the country’s technical and vocational education and training (TVET) sector.

“The financing package comprises 50 million dollars in regular ordinary capital resources and 50 million dollars in concessional ordinary capital resources,” minister Nalinda Jayatissa said.

The funds are intended to support sector reforms and the development of a more effective skills development system aligned with labour market needs, he claimed. (Colombo/Oct14/2026)

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Fitch rates Sri Lanka Sampath Bank’s Rs10bn debenture issue A(lka)

Fitch Ratings – Singapore: Fitch Ratings has assigned Sampath Bank PLC’s (AA-(lka)/Stable) proposed Sri Lankan rupee-denominated Basel III-compliant subordinated debentures of up to LKR10 billion a final National Long-Term Rating of ‘A(lka)’.

The proposed debentures, which will mature in five and seven years, will be listed on the Colombo Stock Exchange. The bank plans to use the proceeds to supplement its Tier 2 capital base to maintain capital adequacy compliance as well as to support loan book growth.

The proposed debentures will qualify as Basel III-compliant regulatory Tier 2 capital. The debentures include a non-viability clause that states they will convert to ordinary voting shares upon the occurrence of a trigger event, as determined by the Governing Board of the Central Bank of Sri Lanka.

The final rating is the same as the expected rating assigned on 10 September 2026 and follows the receipt of documents conforming to information already received.

Key Rating Drivers

Fitch rates the proposed Basel III Tier 2 debentures two notches below the bank’s National Long-Term Rating of ‘AA-(lka)’. This reflects Fitch’s baseline notching for loss severity for this type of debt and our expectations of poor recoveries. There is no additional notching for non-performance risks, as the proposed debentures do not incorporate going-concern loss-absorption features.

Sampath’s National Long-Term Rating is used as the anchor rating for this instrument because the rating reflects the bank’s standalone financial strength and best indicates the risk of the bank becoming non-viable.

Fitch affirmed Sampath’s ratings on 17 August 2026. See our latest rating action commentary, Fitch Affirms Sampath Bank at ‘AA-(lka)’; Outlook Stable , for the key rating drivers and sensitivities.

Rating Sensitivities

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
A downgrade of the bank’s National Long-Term Rating will lead to a downgrade of the subordinated debt rating.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
An upgrade of the bank’s National Long-Term Rating will lead to an upgrade of the subordinated debt rating.

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Oman’s OQ Trading wins Sri Lanka LPG deal at Aramco price plus $133.93

ECONOMYNEXT – Sri Lanka’s cabinet has approved the proposal to award the contract for the supply of 420,000 metric tonnes (±20%) of Liquefied Petroleum Gas (LPG) to Oman’s OQ Trading Limited for a period of 12 months commencing 1 January 2027, minister Nalinda Jayatissa said.

The contract provides for the supply of 420,000 metric tonnes (±20%) of LPG, including a guaranteed minimum quantity of 336,000 metric tonnes, at a price of Saudi Aramco Contract Price plus US$133.93 per metric tonne on a Cost, Insurance and Freight (CIF) basis, Jayatissa said.

International competitive bids were invited for the procurement, and 4 bids were received.

“The contract was awarded to M/s OQ Trading Limited, the lowest substantially responsive bidder,” he told reporters. (Colombo/Oce14/2026)

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Sri Lanka stocks continue to slide, ASPI drops 0.14-pct

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange were trending down on Wednesday, nearing the psychological 20,000 mark, CSE data showed, with the benchmark All Share Price Index moving down 0.14 percent.

The ASPI was down 27.26 points at 20,050.22, while the more liquid S&P SL20 was down 0.02 percent, or 0.96 points, at 5,729.14.

Positive contributors to the ASPI were LOLC Holdings (up 3.08 percent at 418.00 rupees), Vallibel One (up 2.21 percent at 87.90 rupees), Asiri Hospital Holdings (up 4.98 percent at 25.30 rupees), Ambeon Holdings (up 3.45 percent at 33.00 rupees), and Haycarb (up 1.55 percent at 197.00 rupees).

Commercial Bank of Ceylon (down 0.25 percent at 198.00 rupees), SMB Finance (flat at 1.00 rupee), Hayleys (down 0.23 percent at 221.50 rupees), and Odel (down 7.41 percent at 10.00 rupees) were top negative contributors.

Market turnover was 318.20 million rupees. Retailing led turnover with 100.89 million rupees. (Colombo/Oct14/2026)

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