SIGN MOU TO STRENGTHEN
to strengthen trade & commercial relations
Recently, Federation of Indian Chambers of Commerce and Industry (FICCI) and its Chinese counterpart China Chamber of Import & Export of Machinery & Electronic Products (CCCME) have signed an MoU to enhance bilateral trade between the two countries. In view of the present shift of global economic power centre towards Asia Pacific region, the agreement will have great significance. CT Bureau
THE TRADE DEFICIT FROM JANUARY TO DECEMBER OF 2011, HOWEVER, PILED UP TO $27.07 BILLION, EVEN THOUGH INDIAN EXPORTS TO CHINA WENT UP TO $23.4 BILLION REGISTERING A GROWTH OF ALMOST 12.26 PER CENT COMPARED TO THE SAME PERIOD IN 2010
India and China have set a bilateral trade target of $100 billion by 2015, compared to last year's record figure of $74 billion. Bilateral economic and trade cooperation has witnessed a robust growth rate.
India and China officially resumed trade in 1978. In 1984, the two sides signed the Most Favoured Nation (MFN) agreement. IndiaChina bilateral trade which was as low as US$ 2.92 billion in 2000 reached US$ 61.7 billion in 2010, making China India's largest goods trading partner. In 2008, bilateral trade stood at US$ 51.8 billion and China became India's largest goods trading partner, replacing the United States of America. By the end of 2009, as a result of the world economic downturn, bilateral trade dropped to US$ 43.27 billion (a decline of 16.54 per cent).
However, in 2010, bilateral trade reached US$ 61.74 billion, a growth of 43 per cent compared to the same period in 2009. India exported goods worth US$ 20.86 billion (+52 per cent) to China and imported goods worth US$ 40.88 billion (+38 per cent) from China, resulting in an adverse balance of trade of US$ 20 billion. Over all, India-China bilateral trade rose by $12.2 billion in 2011 compared to 2010, when the total trade was $61.7 billion.
The trade deficit from January to December of 2011, however, piled up to $27.07 billion, even though Indian exports to China went up to $23.4 billion registering a growth of almost 12.26 per cent compared to the same period in 2010.
Indian exports to China, mainly composed of primary products and commodity, increased despite the decline of iron ore exports, which dominated India's exports for long due to ban on mining in Karnataka and Goa, according to official sources.
HIGHLIGHTS OF INDO-CHINA TRADE India-China trade for Jan-Oct, 2011 stood at US$ 60.58 billion, recording an increase of almost 22 per cent India's exports to China for Jan-Oct, 2011 reached US$ 18.89 billion, a growth of more than 11 per cent when compared to the same period in 2010
China's exports to India for Jan-Oct, 2011 reached US$ 41.68 billion, recording an increase of almost 27 per cent compared to Jan-Oct, 2010
The trade deficit for India for Jan-Oct, 2011 stood at US$ 22.79 billion Iron ores, cotton and yarn, fabric, copper, precious stones, organic chemicals, plastic, salt, sulfur, earth & stone, machinery, reactors, boilers continued to dominate the
WHILE THE INDIAN TRADING COMMUNITY IS PRIMARILY CONFINED TO MAJOR PORT CITIES SUCH AS GUANGZHOU AND SHENZHEN, THEY ARE ALSO PRESENT IN LARGE NUMBERS IN PLACES WHERE THE CHINESE HAVE SET UP WAREHOUSES AND WHOLESALE MARKETS SUCH AS YIWU
INDIAN EXPORT BASKET
Among the products exported from India to China, iron ores, slag and ash (HS 26) constituted a dominant share of 49 per cent though the export declined by 10 per cent y-o-y. The share of cotton, yarn and fabrics in the total exports from India to China stood at 10 per cent for the period Jan-Oct, 2011 Spectacular rise was seen in the export of copper and articles thereof (HS 74), plastic (HS 39), food waste (HS 23) and miscellaneous chemical products (HS 38) recording increase of 164 per cent, 71 per cent, 64 per cent and 63 per cent y-o-y, respectively.
INDIA-CHINA FINANCIAL DIALOGUE E
In accordance with the MoU on the Launch of the Financial Dialogue between India and China, signed during Chinese Prime Minister Wen Jiabao's visit to India in April 2005, the two sides have since successfully held five Financial Dialogues in April 2006, December 2007, January 2009, September 2010 and November 2011, respectively. The Fifth India-China Financial Dialogue was held in New Delhi. During the Dialogue, both sides exchanged views on the global macro economic situation and policy responses, with specific reference to current risks to the global economy and the role of India and China in the post-crisis recovery phase. Discussions also took place on G20 issues including reforms in the International Monetary System and the Framework for Strong, Sustainable and Balanced Growth. The Sixth India- China Financial Dialogue is scheduled to be held in China in the last quarter of 2012.
INDIAN COMPANIES IN CHINA With the growth in bilateral trade between India and China in the last few years, many Indian companies have started setting up Chinese operations to service both their Indian and MNC clientele in China. Indian enterprises operating in China either as representative offices, Wholly-owned Foreign Enterprises or Joint Ventures with Chinese companies are into manufacturing (pharmaceuticals, refractories, laminated tubes, auto-components, wind energy, etc.), IT and IT- enabled services (including IT education, software solutions, and specific software products), trading, banking and allied activities.
While the Indian trading community is primarily confined to major port cities such as Guangzhou and Shenzhen, they are also present in large numbers in places where the Chinese have set up warehouses and wholesale markets such as Yiwu. Most of the Indian companies have a presence in Shanghai, which is ChinaÊs financial centre; while a few Indian companies have set up offices in the capital city of Beijing.
Many Indian banks have also established their presence in mainland China in the last few years. Four Indian banks, namely, State Bank of India ( Shanghai), Canara Bank (Shanghai), Bank of Baroda (Guangzhou) and Bank of India (Shenzhen) have branch offices in China. At present, State Bank of India is the only Indian bank to have authorisation to conduct local currency (RMB) business at its branch in Shanghai.
Various Government institutions and agencies from the two countries have also been interacting with each other for furthering cooperation in the areas such as taxation, human resource development and employment, health, urban development and tourism. There is a close exchange and interaction between the economic think-tanks and scholars as well.
INDIAN COMMUNITY IN CHINA
The presence of Indian community in China is increasing. Present estimates put the community's strength in Mainland China at around 48,000, with 7,700 in and around Shanghai and 25,000 in Southern China (Guangzhou, Shenzhen and surrounding areas), and the remaining in Beijing and other areas.
A major component of the community in Mainland China are students. About 8,000 Indian students are enrolled in various Chinese universities, particularly in Chinese medical universities. Easy admission system, affordable fees and good standard of facilities are main attractions for the Indian students.
R V Kanoria, president, FICCI greets Deming Chen, commerce minister of China at the signing ceremony of MoU between FICCI and CCCME in presence of Anand Sharma, commerce, industry and textiles minister, India