China-India trade takes off

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Source: CCTV.com | 01-14-2008 13:02

Accompanying Indian Prime Minister is a delegation of more than 25 members, made up of Indian industry leaders. Trade issues are high on Prime Minister Singh's China visit.

According to the trade figures for the first quarter of the fiscal year of 2007 to 2008, China has already overtaken the US and become India''s largest trading partner.

Border negotiations may have been limping along, but bilateral trade has definitely been racing ahead. China and India, the world's two most populous countries, have seen their total trade volume in the first 11 months of 2007 rocket over 50 percent to 34.2 billion US dollars. The total 2007 figure is believed to be close to 40 billion US dollars -- two years ahead of schedule, which was set when Chinese President Hu Jiantao met with the Indian Prime Minister in November 2006.

As the massive growth in trade continues to break official targets, experts are expecting the next target of 60 billion US dollars to be achieved before 2010.

Research professor Ma Jiali of CICIR said, "The rapid growth of bilateral trade is beyond people's expectations. The target set in 2006 now seems to be a little conservative. Experts from India's business circle are expecting bilateral trade will hit 100 billion US dollars in the next few years. But this will need the joint efforts of both countries."

According to the trade figures for the first quarter of the fiscal year of 2007 to 2008, China has already overtaken the US and become India's largest trading partner.

Despite booming bilateral trade, a widening trade deficit for India might be an issue that Singh will seek solutions to during his visit. In the January to November period of 2007, India's trade deficit with China widened to 9 billion US dollars. And two years before that, Indian was actually enjoying a trade surplus with China. But experts say the deficit is still tolerable, and that the more important thing at present should be on boosting investments, rather than the deficit itself.

Currently, nearly 200 Indian companies have set up joint or wholly-owned ventures in China. But the figure is still low, and there's much potential for growth. Indian firms are hoping Prime Minister Singh's visit could bring concrete results to business.

Paulo Fernando Soares, CEO of Suzlon Energy Beijing Branch, said, "We believe this visit is very important. China and India are large economies but the exchange is very small. We hope the visit could help foster cooperation."

China and India are both regional powers, yet both are developing nations feeding a combined 40 percent of the world's population. Both countries have similar natural conditions, and so face similar challenges. There's much that the two giants can learn from each other, and a joining of hands also has major implications for Asia and world economy as a whole.

Editor:Zhang Ning