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India, China trade imbalance to grow: Chinese experts

Beijing, May 21, 2013, (IANS): 11:54 IST

The trade imbalance between India and China may keep growing, experts here said with one of them noting that "India needs more Chinese manufactured products".

As Premier Li Keqiang visits India, his first overseas trip, China Daily spoke to experts who said the trade imbalance is likely to keep growing and the situation is hard to change.

"India's trade deficit with China is expanding. In the short term, that's hard to resolve. The imbalance is mainly because India has limited exports to China, while Chinese manufactured goods have a competitive advantage in the Indian market," Liu Xiaoxue, a researcher on South Asian studies at the Chinese Academy of Social Sciences, was quoted as saying.

Liu added that the slower growth pace in China in recent years, coupled with overcapacity in the steel and iron sectors and the government's tightening policies in the real estate sector, reduced demand for Indian raw materials, which account for the bulk of Indian exports to China.

Hu Shisheng, director of the Institute of South and Southeast Asian and Oceanian Studies at the China Institutes of Contemporary International Relations, agreed, saying: "The trade imbalance is rooted in India's trade structure."

"India's trade deficit with China will not be reversed in the foreseeable future. Any change depends on whether India can export products that meet the demand of the Chinese market," Hu said.

He pointed out that the trade deficit is likely to increase "because India needs more Chinese manufactured products, and China diversified its sources for imports of raw material".

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