China, India Press Each Other For Greater Access
While Chinese firms have been buying U.S. firms amid the economic slowdown, China and India have pressed each other for greater market access at a meeting between the countries’ trade ministers, Reuters reports:
Despite twitchy relations and occasional heated rhetoric, business relations between India and China have boomed for more than a decade. The two sides have targeted trade flows of $100 billion by 2015 from $75.5 billion now.
For its part, India has long complained that its companies, from IT and services to pharmaceuticals to Bollywood film-makers, are unfairly restricted when trying to enter the Chinese market. Exports to the world’s second-biggest economy have mainly consisted of raw materials such as iron ore.
“The two governments need to work together to create a better, easier and more relaxing and business-enabling environment for our potential Chinese and Indian investors,” Chen told reporters, through a translator.
Despite this meeting, Market Watch reports the China-India talks have little to offer in tackling the trade gap:
China and India Monday sought more market access for each other at a meeting of their commerce ministers, but offered little in solving the widening trade imbalance between the Asian neighbors other than saying that they will set up a joint panel to look into it.
India’s trade deficit with China jumped 42% to nearly $40 billion in the last fiscal year ended March 31, and was the largest contributor to the country’s overall gap between exports and imports. Their total trade was more than $75 billion, up over 27% from the previous year, and the two countries have previously set a target to expand that to $100 billion by 2015.
The trade deficit has been a thorn in India-China relations.
Speaking after the meeting, Indian Commerce Minister Anand Sharma and his Chinese counterpart, Chen Deming, told reporters that the two countries needed to address the trade-gap issue and reiterated their respective stands, but didn’t announce any specific measures.
China and India have been strategic rivals in the past, but India has invited Chinese companies to invest in its manufacturing zones, New York Daily News adds:
“We’ve invited China to participate in and support the establishment of one or more of the National Investment and Manufacturing Zones,” trade minister Anand Sharma said in New Delhi after talks with his Chinese counterpart Chen Deming.
“That is where the opportunities beckon,” Sharma said in a speech to Indian and Chinese business leaders, adding the response from the Chinese to the investment proposal had been “positive and encouraging”.
The zones are being set up under India’s National Manufacturing Policy which aims to boost manufacturing as a percentage of gross domestic product to 25 percent from 16 percent in the next decade.
The policy is part of India’s struggle to provide jobs to its growing army of young people.
Aside from investing in the manufacturing zones, China plans to import more Indian commodities, according to China Daily:
China promised Monday to import more Indian commodities including IT,pharmaceutical and agricultural products in order to make trade between the two countries”more balanced”.
Chen said when the global economy has not come out of crisis, there is great meaning to expand bilateral economic cooperation with India which will also send a positive message to the world.
He said China encourages its enterprises to shift some of their production bases from China to India if they are needed here.
Sharma said it is unreasonable that the direct investment into each other by China and Indiaonly totals about $1 billion and called for more investment.