‘New solutions needed’: China on widening trade deficit with India
China on Thursday said there was a need to find “new solutions” to the widening trade deficit with India after latest statistics from the Chinese customs revealed that the deficit accounted for more than 60 percent of bilateral trade in 2019.
India’s trade deficit with China was 391.7 billion yuan ($56.8 billion) in 2019, an official from China’s General Administration of Customs (GAC) said earlier this week, adding that it was important that the two countries strengthen cooperation.
“Total bilateral trade was 639.5 billion yuan (about $93 billion) in 2019, up 1.6 percent year-on-year. China’s exports to India stood at 515.6 billion yuan (about $75 billion), up 2.1 percent, and India’s exports to China totaled 123.9 billion yuan ($18 billion), down 0.2 percent year-on-year,” Huang Guohua, a vice director of the GAC’s analysis department had said earlier this week.
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Responding to question on the trade deficit and what China was doing to address the problem, Chinese foreign ministry spokesperson, Geng Shuang tried to play the issue down.
“Well, you noted the latest data. China values the Indian concerns on the trade imbalance. In fact, we have never stopped improving that. And in fact, we have been making a series of measures on accelerating the reviewing process of the Indian imports into China and in the past 5 years China’s imports from India increased by 15 percent,” Geng said.
According to Geng, in 2019, the trade deficit dropped “dramatically”.
The trade deficit in 2018, according to the official Chinese data, was $ 57.86 billion while in 2017 it was $51.72 billion.
Whether the drop of little more than $1 billion could be called “dramatic” is questionable, Geng was optimistic.
“And in 2019, the trade deficit has dropped dramatically and in the second CIIE (China International Import Expo in Shanghai), India was the country with the biggest increase in the deals reached,” Geng added.
“So, our 2 countries have economies that are both growing rapidly and with huge development potentials. We need to view this trade imbalance issue with this developing perspective and find new solutions. President Xi (Jinping) and Prime Minister, Narendra Modi agreed to establish a high level economic and trade dialogue mechanism,” Geng added.
Geng further added, “Between us, we hope that we can work together and use this mechanism well to enhance our trade and investment cooperation. We can develop in a more balanced way”.
Earlier in the week, GAC’s Huang had said, “Chinese products have a strong competitive advantage in the Indian market. We also welcome more high-quality Indian products to enter the Chinese market.”
“We believe that deepening economic and trade cooperation between the two countries will help promote the sound, stable and balanced development of China-India trade,” he added.