Sri Lanka has decided to allot a 55-sq-km expanse of land to China for a special economic zone, the country's embassy in Beijing said on Friday.

The SEZ, which fits in with China's Belt and Road Initiative, will transform Sri Lanka into an international hub and improve people's livelihoods, experts say.

"The Chinese have asked for 55 sq km of land in the Hambantota area of Southern Province for their zone, and we are in the process of acquiring the land," Malik Samarawickrama, Sri Lankan minister for international trade and strategic development, told the Daily Times of Sri Lanka this week.

"After it is developed, this area will generate 1 million jobs," he said. Samarawickrama confirmed that India will also set up an SEZ for pharmaceutical and auto-parts industries in Sri Lanka, but its location has yet to be finalized.

Li Xiangyang, president of the National Institute of International Strategy at the Chinese Academy of Social Sciences, said: "Sri Lanka is a crucial node to push forward the Belt Road Initiative, given its strategic position in the South Asian region, and given the lesser interest India has shown in the Belt and Road Initiative. Moreover, the SEZ makes perfect sense, as Sri Lanka has the ambition to regain its status as the hub of the Indian Ocean and needs to acquire technologies and skills through foreign investments.

"China, on the other hand, is refining its methods by setting up a SEZ to help the local people benefit from the Belt and Road Initiative, instead of just building infrastructure such as roads, ports and power plants."

"By benefiting local people, Beijing could ensure its profits regardless of how a country's government may change," Li added.

Jia Duqiang, a senior Southeast Asian studies researcher at CASS said China's political relations with Sri Lanka are returning to normal.

A Chinese delegation will head to Sri Lanka next week to discuss the SEZ.