Financial Daily from THE HINDU group of publications
Monday, Jan 14, 2002
Industry & Economy - Foreign Trade
Zhu visit to boost ties across the prism
NEW DELHI, Jan. 13
THE six-day visit of the Chinese Prime Minister, Mr Zhu Rongji, from today to India opens an optimistic chapter in the bilateral economic relations of the two giants in terms of demography, development and mosaic of variegated culture with their respective historic perspectives.
Official sources told Business Line here that Mr Zhu, who is in charge of the economic policy of China and will continue to steer the economy for another year when his term ends by 2003, would avail himself of this sojourn to boost bilateral co-operation.
Mr Zhu, the first Chinese premier to visit India in a decade, today arrived in Agra from Bangladesh. He is to hold talks with the Prime Minister, Mr Atal Bihari Vajpayee, on Monday.
He is also scheduled to address the captains of Indian industry in Mumbai, besides undertaking a visit to Bangalore, the Indian version of Silicon Valley, to acquaint himself with the success saga of Indian information technology and software industry.
Sources said the visit of Primer Zhu to Bangalore meant that both the sides have lived down the recent fracas over the allegations against a Chinese telecom company that had set up an outfit in Bangalore. Several important economic ministers would call on the Chinese Premier during his stay here when half-a-dozen bilateral agreements are likely to be signed to seal the burgeoning commercial co-operation, the sources said.
Latest available trade figures show that India's exports to People's Republic of China have registered a robust 18.53 per cent growth at $427.51 million during April to September 2001, as compared to $360.68 million in the corresponding months of 2000.
The obverse side of this growing export volume to China from India is New Delhi's growing import volumes from China which show a growth of 27.77 per cent during the first half of the current fiscal at $927.61 million, as against $725.99 million in the corresponding months of 2000. India's major items of exports to China include marine products, iron ores and minerals, cotton yarn, fabrics, made-ups, organic/inorganic chemicals, castor oils.
In a recent interaction with Indian industry and exporters here, the Chinese Commercial Counsellor, Mr Du Chingping, remarked that China would be one of the major markets for Indian goods in view of China's recent accession to the World Trade Organisation (WTO). He stated that the extant bilateral trade volume of $3.5 billion was meagre considering the huge economy and market size of the two countries.
In its update on Asian Development Outlook, 2001, the Asian Development Bank (ADB) said that accession to WTO would spawn wider choice to Chinese consumers, while some goods and services would be available at lower prices. ADB reckons that WTO accession is likely to engender notable competitive pressure on the farm sector, as well as on the telecommunications and automobile industries in China.
Trade analysts contend that there are various items that could be traded between the two countries on the basis of comparative advantages like agricultural products, processed fruits and vegetables, iron ore, chemicals, pharmaceuticals, processed diamonds. India is also keen on import of a host of products from China, which would include electronic goods, textile machinery, coal and processed minerals.
For New Delhi, the visit of Chinese Premier would help in unravelling the Chinese success in trade and foreign investment that have formed an increasingly important component of GDP in recent years. China's gross domestic product (GDP) expanded at an average of 9.7 per cent annually from 1980 to 2000 and GDP growth in 2001 could be 7.5 per cent. In 2000, China was the seventh leading exporter and eighth largest importer of merchandise trade, with exports amounting to $249.2 billion and imports at $225.1 billion, according to WTO. While China attracts on average $40-45 billion in foreign direct investment, India's was less than $5 billion.
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