China says US trade protectionism will hurt India, too

China says US trade protectionism will hurt India, too

Beijing has nudged India to make a common cause with it against Washington, cautioning that the US' “unilateral trade protectionism” would hurt not only China, but India, too.

As US-China trade war rages on, Beijing on Wednesday reached out to New Delhi, stressing that the two nations must fight American President Donald Trump's protectionist measures. The Embassy of People's Republic of China in New Delhi issued a statement in New Delhi, underlining that the two neighbouring countries “need to deepen their cooperation to fight trade protectionism” of the US.

“As the two largest developing countries and major emerging markets, China and India are both in the vital stage of deepening reform and developing economy and both need stable external environment,” Ji Rong, spokesperson and counselor of the Embassy of China in New Delhi, said.

The Trump administration first imposed a 25% tariff on $50 billion worth of China's exports to America. Last month, Trump not only announced a new 10% tariff on additional $200 billion worth of America's imports from China, but also threatened to raise it to 25% on January 1, if President Xi Jinping's government in Beijing does not agree to give trade concessions to the US by then.

Beijing retaliated to the Washington's “protectionist measures” with a 25% tariff on $50 billion worth of US exports to China. It also imposed variable tariffs of 5% to 10% on an additional $60 billion worth of China's import from the US.

The Chinese Embassy in New Delhi said that the “unilateral trade protectionism” practised by the US in the name of “national security” and “fair trade” would not only “affect” economic development of China, but also “undermine the external environment” of India and hinder its booming economy.

“China and India share common interests in defending the multilateral trading system and free trade,” Ji said. She recalled that Prime Minister Narendra Modi and the Chinese President had spoken in one voice calling for safeguarding the multilateral trading system and free trade at the World Economic Forum in Davos.

“Facing unilateralism and bullying activities, China and India have more reasons to join efforts to build a more just and reasonable international order,” she said.

New Delhi and Beijing have focused on augmenting bilateral trade ever since Modi and Xi had an informal summit at Wuhan in central China on April 27 and 28 and agreed on a roadmap to mend ties, which hit a new low last year over the 72-day-long face-off between the Indian Army and the Chinese People’s Liberation Army at Doklam Plateau in western Bhutan.

India's trade deficit with China expanded from $38.72 billion in 2012-13 to $51.11 billion in 2016-17 and further to $62.94 billion in 2017-18. India's exports to China in 2017-18 amounted to $13.3 billion, while its imports from the neighbouring country were worth $76.2 billion.

Trade remained high on agenda even when Modi and Xi followed up the informal summit at Wuhan with meetings at Qingdao on the east coast of China on June 9 as well as at Johannesburg in South Africa on July 26.

New Delhi has been underlining in all its interactions with Beijing that the burgeoning trade imbalance is unsustainable and not conducive for long-term growth in bilateral commerce. China has been promising India that it would take measures to narrow the trade imbalance.

China’s recent trade war with the US too, of late, prompted it to consider opening up its market for some products from India.

Earlier, China imported only basmati rice from India. But it recently cleared 14 of the 19 registered rice-exporting companies of India to export non-basmati rice to China.

Beijing eliminated tariffs on import of soya from India and a few other countries from July 1. The move came after Beijing imposed an additional 25% tariff on the import of soya and other items from the US, in response to Trump’s “protectionist measures” targeting exports from China to America. Recently, China also signaled its willingness to import raw sugar from India. India is also exploring the possibilities for importing urea from China.

In recent months, Beijing eliminated tariffs on import of 28 anti-cancer and antibiotic drugs — a move, which is likely to open up an opportunity for the Indian pharmaceutical companies to get greater access to the Chinese market.

The Chinese government also brought down value-added tax levied on 103 of the 138 anti-cancer drugs. New Delhi is now persuading Beijing to simplify and speed up the complex and lengthy process of trials and approvals for import of pharmaceutical products from India to China.