India, China sign $16 bn deals
Chinese Premier Wen Jiabao gave a thumbs-up to large fund flows and deals between China and India on Wednesday as he arrived with 300 industry leaders in tow for a visit that aims to build trust through trade. HT reports. Specialdelhi Updated: Dec 16, 2010 02:34 IST
Chinese Premier Wen Jiabao gave a thumbs-up to large fund flows and deals between China and India on Wednesday as he arrived with 300 industry leaders in tow for a visit that aims to build trust through trade.
"It is necessary to ease restrictions concerning approval procedures, capital flow and entry and exit of people, thus creating more favourable conditions for mutual investment,” Wen told corporate captains at a meeting organised jointly by the three apex chambers — CII, FICCI and Assocham. Shortly after his 10-minute address, Indian and Chinese companies signed 49 deals worth $16 billion (R70,000 crore).
Following the deals, India and China will sign an inter-governmental pact to facilitate investments after Wen meets Prime Minister Manmohan Singh on Thursday.
On India’s claim for a permanent seat at the UN Security Council, government sources expect the Chinese to stick to the "having more discussions" line but articulating an "evolved position", that will not amount to a very open endorsement.
But a proverbial Great Wall seemed to loom over Beijing’s desire for a free trade agreement between the world’s two fastest-growing large economies, with Delhi wary of pulling down customs barriers that could worsen a trade deficit that yawns at $24 billion (R100,000 crore).
Wen said early launch of negotiations to the proposed trade pact would be mutually beneficial, but India hasn’t responded favourably so far.
Merchandise trade between India and China is set to touch $60 billion this year, a 10-fold increase in five years.
Commerce and industry minister Anand Sharma asked China to provide greater market access to Indian goods and services, especially pharmaceuticals and IT services, to reduce the deficit. “The balance of trade lies heavily in favour of China.
We’d like to take measures to reduce this deficit,” he said. “Our pharma firms have been engaged in high-end research and seek to partner with China for greater trade and investment opportunities.”
Wen said Beijing has taken India’s problem of rising trade deficit “seriously and stands ready to take further measures”.
"China and India are partners for cooperation, not rivals in competition,” he said. “There is enough space in the world for the development of both China and India and there are enough areas for us to cooperate.”
Wen also rejected the analogy of describing the two countries’ pace of development as “dragon” for China and
“elephant” for India as inappropriate.