China pushes for trade pact

Beijing may give greater access to Indian IT, pharma and agri cos

As giving a boost to bilateral trade relation is being billed as the key objective of his second visit to New Delhi, Wen sought to strike the right note while addressing a business meet just hours after his arrival.

“China and India are partners for cooperation, not rivals in competition,” he said, indicating that Beijing was sensitive to New Delhi’s concerns over growing trade imbalance and Indian companies’ limited access to the market in China.

With China-India trade likely to cross US $ 60 billion in 2010-11, Wen said that he and Prime Minister Manmohan Singh would on Thursday discuss ways to raise the trade volume and set a new target to be achieved in the years to come.

Taking a cue from Singh’s oft-repeated remark on New Delhi’s relation with Beijing, Wen too said that the world had enough space to accommodate the aspirations of both China and India. “There are also enough areas for our cooperation,” he said, while addressing the India-China Business Cooperation Summit. 

India has since long been complaining about its growing trade deficit with China and limited market access for its companies in the neighbouring country.

India’s trade deficit with China rose to US $ 19 billion in 2009-10, from US $ 1 billion in 2001-02 and it might reach US $ 24-25 billion by the end of the current fiscal.
New Delhi has been pointing out that even in the sectors like IT and pharmaceuticals, despite global success, Indian companies have little penetration in China.

Trade imbalance

Wen not only indicated Beijing’s willingness to give greater market access to Indian companies in China, but also said that his Government was keen to address the issue of trade imbalance with its western neighbour.

The Chinese Premier also pushed for a Regional Trade Agreement with India. He said that New Delhi and Beijing had completed the feasibility study for the agreement. “We now look for early launch of negotiations for the agreement,” he added. A large Chinese trade delegation accompanied Wen and the business meet witnessed signing of deals worth about US $ 16 billion.  

Both Beijing and New Delhi were looking forward to the Chinese Premier’s visit to India to iron out at least some wrinkles in the complex bilateral relation.

While China’s aggressive assertion of its claim on Arunachal Pradesh and Dalai Lama’s visit to the State were major irritants for the relation in 2009, 2010 rather started with a positive note with President Pratibha Patil travelling to Beijing for the 60th anniversary of Sino-Indian diplomatic relation.

But China’s persistent policy of issuing stapled visas to citizens of Jammu and Kashmir and thus questioning the troubled state’s status as an integral part of India, its denial of visa to a senior army officer posted in the state and Chinese companies’ presence in Pakistan-occupied Kashmir continued to strain the relation in the current year too.

Wen however sought to smoothen the ruffled feathers in New Delhi. “My current visit is aimed at promoting friendship, expanding cooperation, building on our past achievements and opening up new dimensions for mutual benefit and common development of the two countries,” he said in a written statement released at the airport upon his arrival.

He recalled his first state visit to India in 2005, when the two countries announced the establishment of strategic and cooperative partnership for peace and prosperity.
“On my way from the airport to here, I noticed the signs of changes India has undergone and remarkable achievements it has made in the past five years since 2005,” he said, before beginning his address to the business meet. Wen will also visit Pakistan from Friday.