In what could signal a new phase in Sino-Indian economic relations, China has invited India to help in developing Sri Lanka, including taking part in the multibillion dollar Colombo International Financial City funded by Beijing, Pakistan's Daily Times reported.

Addressing a forum in Colombo, Chinese Ambassador in Sri Lanka, Yi Xianliang said the project was open for collaboration with India and that his country welcomed constructive partners. "We welcome any third party to join Sri Lanka and China. We are not opposed to India or any other country. China already has many business relationships with India," Yi said at the forum organized by the Sri Lankan National Chamber of Commerce in September.

The Indian High Commission in Colombo was cautious about accepting the invitation saying it did not have sufficient details about the Colombo International Financial City, formerly known as the Colombo Port City. However, the High Commission's spokesperson was quick to add that the government continuously encouraged Indian businesses to invest in Sri Lanka, the Daily Times report also said.

"Already, we have quite a number of Indian companies who have made substantial investments in Sri Lanka. Of course, as and when there are further opportunities, more and more companies from India will invest in Sri Lanka," said Esha Srivastava, First Secretary of the High Commission's Press, Information & Culture Wing, told Asia Times.

Sri Lanka and India's bilateral relations are at an all-time high, and Sri Lankan Prime Minister Ranil Wickremesinghe said on Thursday he and his Indian counterpart, Narendra Modi have decided to sign the controversial Economic and Technology Cooperation Agreement (ETCA) before the end of this year. The decision comes despite stiff resistance from Sri Lanka's opposition parties as well as doctors and IT professionals who fear that the deal will lead to an influx of low grade Indian professionals entering the Sri Lanka job market.

Addressing the India Economic Summit in New Delhi, Wickremesinghe, who was a guest speaker at the event, said: "The proposed economic and technology cooperation agreement with India will be signed by the end of this year. Prime Minister Modi and I have decided that we should conclude it by this year."

Wickremesinghe was optimistic that the agreement will offer a strategic economic advantage to Sri Lanka. The Sri Lankan Premier also attempted to balance ties between India and China at the summit by saying India and China have the power to drive global economic growth. "The balance of economic power in the world is shifting to Asia, and India and China remain the only two countries that can drive global economic growth," he said. Wickremesinghe also used the summit in New Delhi to allay Indian fears that China may be attempting to set up a military base in Sri Lanka in the guise of increased infrastructure funding.

Threatened by China's increasing interest in Sri Lanka, India has in the recent past expressed concerns that Beijing may be extending so much funding in an effort to establish a military base in the country, and the rebranded Port City was also a long term strategic move by China.

During a visit to Sri Lanka in late September, Indian Commerce and Industry Minister Nirmala Sitharaman said India will invest US$2 billion in Sri Lanka over the next three to four years.

However, despite the announcement, China continues to be the island's largest foreign funder, especially after the US$1.4 billion financial city project took off. China is expected to pump in another US$8 billion in foreign direct investments into the new offshore city.

The offshore financial center aims to attract more than US$13 billion in foreign direct investment from investors outside Sri Lanka such as reputed international banking and financial services companies as well as malls, hotels, and apartment complexes, among others, with China taking the lead to promote the project.

Shiran Fernando, economist at Sri Lanka's Frontier Research, said the open invitation by the Chinese Ambassador to India was a positive move. "If it happens, it will have an overall positive impact on the success of the project in terms of bringing in more investors into the fold. It would also help Sri Lanka to balance the geopolitical tensions that have emerged as a result of the project," he said.