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China, India to cooperate in new round of WTO talks
Anil K Joseph in Beijing | June 22, 2003 16:18 IST
Chinese Premier Wen Jiabao foresees greater coordination between Beijing and New Delhi on multilateral trade issues, especially at the next round of WTO negotiations to ensure a 'fair, just and rational' global trade regime.
"Bilateral trade and economic cooperation have grown rather rapidly in recent years -- expanding from pure import and export of commodities to multifaceted and multidimensional cooperation including engineering contracting, technology trade and two-way investment," Wen told PTI ahead of Prime Minister Atal Bihari Vajpayee's arrival in Beijing.
China's WTO membership in late 2001 has created a favourable condition for expanded trade-economic ties between the two countries, with the organisation providing yet another platform for their multilateral cooperation.
"The Chinese side is of the view that the new round of multilateral trade negotiations should be conducive to a new international economic order that is fair, just and rational, should strike a balance between the interests of the developed and developing members, and should take into full consideration the development level of the developing countries," Wen said.
"Both China and India are important developing members of the WTO. We are ready to join India in closer communication and coordination throughout the new round of WTO negotiations so as to ensure a result that is more beneficial to the developing members," he added.
With a high-powered CII and FICCI delegation traveling with Vajpayee, trade is being touted as the thrust of the prime minister's visit, the first by an Indian head of government in nearly a decade.
India is China's largest trading partner in South Asia, and the two-way trade reached a record US $4.946 billion in 2002, up by 37 per cent from the previous year, Wen observed.
The latest Chinese statistics put the bilateral trade between the two neighbours for the period January to April 2003 at US $2.313 billion an increase of 70.8 per cent over the same period for 2002.
While Indian exports to China between January-April 2003 increased by a whopping 100.5 per cent, compared to the same period in 2002, Bejing's exports to New Delhi rose by 42.1 per cent.
The trade balance for the first three months of 2003 is in India's favour to the extent of US $354 million.
Noting that China and India have many strong points of their own, Wen said, "They are quite complementary economically. And they both have broad domestic markets.
However, the scope of their economic cooperation remains far from being commensurate with their full economic strengths."
"The governments and enterprises of the two countries should step up exchanges, enhance mutual understanding and promote mutually beneficial cooperation," Wen said.
"The Chinese government encourages well-placed Chinese enterprises to work with their Indian counterparts and also welcomes investment and business ventures in China by Indian firms," he said.
Meanwhile, senior officials from the Confederation of Indian Industry said they are committed to further strengthening of India-China economic partnership.
"The CII has decided to highlight and address the key issues that need to be addressed between Chinese and Indian businesses, that is, bridging the information and communications gap," a CII official said.
A 35-member CII delegation led by President Anand Mahindra hopes to help address the key issues and concerns for fostering a strong India-China economic partnership, he said.
Among the range of economic issues between India and China, the foremost is the narrow window of trade.
Top five items of trade between India and China are primary or low-value added products, which include iron ore, plastics and linoleum, ores and minerals, marine products and pharmaceuticals.
The Indian imports from China include electronic goods, coal-coke, organic chemicals, silk, silver and drugs and pharmaceuticals.
Diversification of the export basket has come across has one of the key recommendations from analysts. It is vital that India diversifies its exports to China and increases the number of intermediary and finished goods in its basket.
Some of the high-demand products for export to China include chemicals, steel, automotive components, medical and diagnostic products, processed food, software, engineering goods, shoes, garments and cosmetics.
The Federation of Indian Chamber of Commerce and Industry (FICCI) is sending a 25-member delegation led by its president, A C Muthiah.
Apart from the crucial business seminars in Beijing and Shanghai, FICCI & its counterpart -- China Council for Promotion of International Trade will be having the 11th meeting of India-China JBC.
Some of the critical issues constraining bilateral trade between the two countries will be discussed elaborately at this meeting.
Problems arising due to weak banking links, which could affect steel exports to China, slow progress of the bilateral protocol on exports of mango and other fruits from India and China, possibility of exchanging tariff lines under Bangkok agreement in thrust sectors of mutual interest will constitute some of the specific issues to be raised with Chinese counterparts, FICCI sources said.