China-Maldives FTA: A Game-Changer for Local Businesses, Says Minister Saeed

The China-Maldives Free Trade Agreement (FTA) will offer unprecedented benefits to the Maldives, providing exclusive opportunities unavailable to other countries, according to Minister of Economic Development and Trade Mohamed Saeed. The Minister made the statement during a ceremony held to announce the implementation of the FTA, which will come into effect on January 1.

Originally signed in 2014, the FTA faced delays despite being approved by the Maldives Parliament in 2017. The change of government in 2018 stalled its implementation until President Dr. Mohamed Muizzu took office in November 2023, initiating efforts to bring the agreement to life.

At the ceremony, Minister Saeed emphasized the transformative impact of the FTA, particularly in boosting trade opportunities and revenue streams. Addressing concerns about reduced border revenue, he reassured stakeholders that the FTA would enable the Maldives to compensate for any losses through increased trade activities.

Providing an example, the Minister highlighted the cost-saving potential for the guesthouse industry. "If a 12-room guesthouse costs USD 325,000 to build, about 10 percent goes toward construction items, and 20 to 25 percent is for furnishing. With the FTA, the government can offer a discount of USD 32,500 to 39,000," Saeed explained. He added that such savings would promote the growth of the guesthouse business and related sectors.

Saeed also underscored the agreement’s benefits for the fisheries sector, particularly the unrestricted export of Maldivian fish to China. Additionally, he pointed out that the FTA provides unique advantages to the Maldives, such as allowing local companies to operate in Chinese free trade zones with the same rights as Chinese firms—a privilege not extended to other FTA partners.

Concluding his remarks, the Minister stressed the strategic importance of FTAs in shaping the Maldives’ economic future. He revealed ongoing efforts to establish similar agreements with India and the United Kingdom, while the FTA with Türkiye is expected to come into force in early 2025.