Economy

India visit to help smooth trade ties

By Li Xiaokun, Li Xiang and Wang Xing (China Daily)
Updated: 2010-12-14 09:02

Premier's trip, first in four years, to yield multi-billion dollar deals

BEIJING/NEW DELHI - Premier Wen Jiabao's visit to India this week will yield a slew of commercial deals, which will help smooth trade relations between the two emerging economies, senior officials said on Monday.

Beijing will send a large accompanying delegation to India, comprised of more than 100 senior business leaders, Liang Wentao, deputy director of the Department of Asian Affairs at the Ministry of Commerce, told a news conference in Beijing.

In New Delhi, Peng Gang, commercial counselor of the Chinese embassy in India, told China Daily that the two sides are expected to sign more than 30 deals focusing mainly on iron ore, biochemical products and fabrics.

Beijing announced on Sunday that Wen is scheduled to visit India from Dec 15 to 17 before going to Pakistan for a two-day visit.

Indian media reported that the deals to be signed would be worth $20 billion, including one agreed upon in October for Shanghai Electric Group Co to sell power equipment and related services worth $8.3 billion to India's Reliance Power over a 10-year period.

China is India's biggest trading partner. The value of bilateral trade is expected to pass $60 billion next year, a 30-fold increase since 2000. But the balance of trade is heavily in China's favor. India's trade deficit with China rose from $1 billion in 2001-2 to $16 billion in 2007-8.

No other country has initiated more anti-dumping complaints with the World Trade Organization against China than India, according to Reuters.

Liang said Beijing never sought a surplus against India, and the trade imbalance was due to structural flaws.

Beijing's Ambassador in New Delhi Zhang Yan suggested on Monday that the two countries "work together as a world factory".

D.K. Ghosh, chairman of ZTE Telecom India, the Indian branch of the Chinese telecom giant, said India and China can be "strong partners in the economic domain".

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Assistant Foreign Minister Hu Zhengyue said at the news conference that Wen will meet Indian President Pratibha Patil, Prime Minister Manmohan Singh and India's ruling Congress party chief Sonia Gandhi during the visit.

"No issues are off the table," he said, adding that the two countries have cooperated in multilateral frameworks like the G20 and BRIC (the emerging economies of Brazil, Russia, India and China).

According to Hu, the border issue is also on the agenda during the visit. China and India share a 2,000-km border that has never been formally settled.

"It is a fragile relationship that needs special care," Zhang said.

Wen's visit will be the first to India by a Chinese premier in four years and comes a month after US President Barack Obama's trip.

French President Nicolas Sarkozy and British Prime Minister David Cameron also visited India this year, while Russian President Dmitry Medvedev will be on Wen's heels to New Delhi.

Sun Shihai, a senior scholar at the Center for South Asian Studies under the Chinese Academy of Social Sciences, said Beijing's efforts for stronger ties with New Delhi are based on bilateral interests.

The convergence of interests of India and China will transcend rhetoric, and manifest itself in substantial cooperation and interaction, Indian Ambassador to China Dr S. Jaishankar said in Beijing on Monday.

"When you consider that India could be spending as much as a trillion dollars over the next five years on infrastructure, just imagine what heights our relationship can reach," he said.

Pei Yuanying, former Chinese ambassador to India, said the two most populous nations need to play bigger roles in international affairs.

During Wen's visit to Pakistan, China will announce it has extended cooperation in 36 development projects in Pakistan, its only "all-weather" partner, and will sign agreements in energy, infrastructure and other sectors, Pakistan's Foreign Office spokesman Abdul Basit has said.

Wen will meet Pakistan's president and prime minister, and address parliament.

Pakistan's Ambassador to China, Masood Khan, has said the two governments would launch an energy cooperation mechanism, as well as new efforts to support Pakistan's post-disaster reconstruction.

Severe summer floods affected 20 million people in Pakistan and destroyed 1.7 million homes.

"From the corridors of government to the streets, people are so excited and keen to receive the premier of China," Khan said.