COLOMBO, July 26 -- China and Sri Lanka's cooperation has grown significantly, the Chinese ambassador has said, noting that greater trade relations and mutual understanding would further enhance bilateral ties.

Chinese investment is in Sri Lanka's need to diversify investment in different sectors, Chinese Ambassador to Sri Lanka Wu Jianghao told Xinhua in an exclusive interview on Wednesday.

Chinese companies in Sri Lanka are predominantly working on massive infrastructure projects in partnership with the Sri Lankan government.

The projects include a 1.2-billion-U.S.dollar coal power plant, a new international port in southern Sri Lanka, an international airport and several highways and railways.

Since the end of the three decade Sri Lankan war in 2009, China has become the country's largest funder with an estimated four billion U.S. dollars given in loans for a slew of development projects.

The ambassador focused on the need to enhance cooperation between the companies of the two countries by working closely as members of business councils and other organizations.

"I really hope that Sri Lankan companies could join hands with their Chinese partners to develop and benefit together during this process of promoting and realizing the development of Sri Lanka," he said, noting that during his two year tenure, business delegations to Sri Lanka have increased in frequency.

A Free Trade Agreement (FTA) between the two countries is expected to be signed by the end of 2014 and Wu believes this will promote trade between the two countries. At present the balance of trade is overwhelmingly in favor of China.

"This is absolutely not what we seek. First of all, China should continue to improve the circumstances to facilitate Sri Lanka's exports to China. We have kept making efforts in this regard and with the installation of FTA in the future. Secondly, the Sri Lankan side also need to make some efforts. Frankly speaking, the variety, quantity and quality of exports from Sri Lanka to China have not reached ideal level yet," said the diplomat.

"There are two solutions. One is that Sri Lankan enterprises make their own efforts, and the other is to expand the scale of production and improve product quality through the cooperation with Chinese enterprises," he added.

Sri Lanka also stands to gain from the proposed Maritime Silk Route policy of the Chinese government. Wu pointed out that Sri Lanka's location puts it in a prime position to act as a hub for South Asia and link to Africa and the Middle East.

"We are confident to say that Sri Lanka will see a lot of development opportunities and will play a very important role during the cultivation and building process of the new Maritime Silk Road."

Inroads to such engagement has already started with a special delegation from the Chinese government visiting Sri Lanka to sound out the local government on the role it can play.

Sri Lanka was the first country to express its support for the Maritime Silk Route policy.

With the State visit of Sri Lankan President Mahinda Rajapaksa to China in May 2013, when bilateral relations between the two countries were upgraded to a "strategic cooperation" partnership, both sides are in a better position to move forward.

Awareness of Sri Lanka has also grown exponentially among Chinese people with more and more tourists arriving, making China one of the fastest growing sources of travelers for the booming industry, Wu said.

"The Chinese government, including our embassy, will continue to render our fullest support. In the long run, the prospects of these relations largely depend on the bilateral cooperation under this framework of trade and investment. We need to abandon the simple concept on bilateral relations, make the cooperation more regional and international, making both sides play their respective advantages as much as possible," said the envoy.