Sino-India Trade a New "bright spot"

Trade between China and India is relatively dynamic or thriving, though it has been negatively affected to varying extent against a backdrop of the escalating world financial crisis. According to China Customs' latest statistics, China's trade with India, its 10th trade partner, reached 51.78 billion US dollars in 2008, up 34 percent year-on-year.

The fast developing Sino-Indian economic and trade ties have been turned into a new "bright spot"in bilateral relations, which has in turn helped to pluck up the confidence of the Asia-Pacific region as a whole to cope with the assault of global financial storm.

Since the late 1980s, the orbit of Sino-Indian economic and trade cooperation has increasingly tallied with the growth trend of bilateral ties. Trade volume between China and India stood merely at 260 million US dollars in the year of 1990. Along with an apparent hastened bilateral economic and trade cooperation since the late 1990s, however, Sino-India trade volume has reported an average annual increase of 30-odd percent, and China is poised to become India's second largest trade partner, only next to the United States.

In early 2008, Chinese Premier Wen Jiabao and his India counterpart Manmohan Singh, who was on a visit to China then, pledged to raise the annual volume of bilateral trade to 60 billion US dollars by 2010, a hefty 50-percent rise over the objective previously defined. Bilateral trade cooperation has played a very active role in enhancing the understanding and mutual trust of the two nations and their people.

Sino-Indian economic and trade cooperation has given an immense impetus to the economic development of both nations. China and India can complement each other in many fields in view of their population scale and market economic structures. At first, China exported mainly to India manufactured or semi-manufactured goods, while importing from it mostly primary products. In recent years, the steady upgrading in economic and trade cooperation between the two countries has promoted the balanced growth of bilateral trade.

At present, China exports mainly to India telecommunication equipment, electric equipment, organic chemicals and other light industrial products. Some large Chinese firms have made direct investments in India; Tata Consultancy Service (TCS), India's largest software company, has kicked off a joint venture in China with Microsoft and three Chinese entities.

Due to India's increasingly widening trade deficit with China, Sino-India trade friction is unavoidable. Particularly in the last quarter of 2008, India filed the almost same number of anti-dumping cases against China as it did in the whole of the previous year. Besides, India imposes high Tariffs against Chinese commodities, chiefly for two causes:

First, India is unlikely or unready to accept China's long-standing demand to accord it market economy status. To India, such status would mean China assumed that prices quoted by Chinese exporters of manufactured products were actual.

Second, with the deterioration of the world economic situation, trade protectionism in India has somewhat reared. At the time when these issues are spotted, it should also be acknowledged that the economic and trade cooperation potential between the two countries has not yet been tapped to the full. So long as China and India can cope with problems in their cooperation appropriately and overcome barriers in their trade and investment, they will be able to create an even better economic and trade environment for the trade and business circles of both nations and attain new, higher levels in bilateral economic and trade cooperation.

At present, both China and India steadily press ahead with their reforms. Along with a continuous, in-depth growth of bilateral relationships and constant improvement of industrial structures, the vista of accelerated bilateral economic and trade between the two countries is promising. As China and India are now strategic partners rather than rivals, their objective is aimed at mutual benefit and win-win results in the course of their economic and trade cooperation, in a bid to lay a more solid basis for the advancement of bilateral relations.

By People's Daily Online, and its author is PD reporter Wang Lei