China and Sri Lanka have launched negotiations on a free trade agreement. Presidents Xi Jinping and Mahinda Rajapaksa made the announcement during the Chinese leader's state visit. The two also witnessed the signing of an action plan to deepen a strategic cooperative partnership.

Chinese President Xi Jinping (2nd L) and his Sri Lankan counterpart Mahinda Rajapaksa (3rd L) attend a video-link launching of a coal power plant in Colombo, Sri Lanka, Sept. 16, 2014. [Xinhua]?

President Xi Jinping's visit to Sri-Lanka comes with a big economic package.

During talks with Sri Lankan president Mahinda Rajapaksa, Xi Jinping called for speeding up talks on a Free Trade Agreement. He said the agreement would fully tap the strengths of two countries in manufacturing and agriculture, and stressed the benefits for sustainable growth.

Xi said the currency swap deal signed by the central banks would facilitate cooperation in customs and quarantine procedures, and boost quality inspection.

Xi Jinping also spoke of the initiative to building the 21 Century Maritime Silk Road. He said it presents many opportunities greater cooperation in port construction and operation, maritime economy and security, and the construction of a maritime transportation center in the Indian Ocean.

President Xi encouraged Chinese companies to get more involved in the construction of Sri Lanka's industrial parks, special economic zones and infrastructure projects. And he welcomes Sri Lanka to become a founding member of the Asian Infrastructure Investment Bank, which China has proposed an alternative to the World Bank.

Rajapaksa said Sri Lanka is ready to work with China on specific terms on the FTA.

He thanked China for its long-time support to his country's development, most recently in major projects including the Hambantota Port and the Colombo Port City.

Rajapaksa said the country will further enhance cooperation with China in economy, trade, energy, and infrastructure construction

The two sides signed an action plan to deepen strategic cooperative partnership.

President Xi arrived in Sri Lanka on Tuesday. It's the first state visit to the country by a Chinese head of state in 28 years.

Sri Lanka is the third leg of his four-country Asia trip, which has already taken him to Tajikistan and the Maldives. He will go to India later today.