China's prime minister promised yesterday to open China's vast domestic market wider to India and forge a "dynamic trade balance" to deepen economic ties.
Chinese PM vows to open up markets to India
NEW DELHI // China's prime minister promised yesterday to open China's vast domestic market wider to India and forge a "dynamic trade balance" to deepen economic ties.
Li Keqiang's trade push, which the countries say will supply "new engines" to lift the stumbling global economy, came amid efforts by the countries to put a military dispute along their contested Himalayan border behind them.
"We have the ability to mitigate the trade imbalance between our two countries," Mr Li told business leaders in New Delhi, responding to Indian worries over trade that is heavily skewed in China's favour.
"The Chinese side is willing to provide facilitation for more Indian products to access the Chinese market," said Mr Li, who chose to make India his first foreign stop after taking office two months ago.
He also said China was willing to "launch negotiations on a China-India regional trading arrangement" but did not elaborate.
China is India's biggest trading partner, with two-way commerce totalling US$67.83 billion (Dh249bn) in the last fiscal year to March 2013, up from $2.1bn in 2001-02. But India's trade deficit with its neighbour soared to $40.77bn last year from just $1.08bn in 2001-02, Indian figures show.
Mr Li said he wants a "dynamic trade balance" as the neighbours aim to raise two-way trade to $100bn by 2015, and said they had "huge markets with huge potential".
But previous Chinese commitments have failed to narrow the imbalance.
"The two countries must now take corrective steps," BG Verghese, fellow at the Centre for Policy Research in New Delhi, said, adding the balancing process could take five to seven years.
"There must be market access on the Chinese side and the Indians must produce the manufactured goods the Chinese need," he said, adding deeper trade involvement brings "deeper vested interest in all-round stability".
In his speech, Mr Li reiterated China's desire to build trust with India after both sides agreed on Monday to work towards settling the long-running dispute over their still formally undefined border.
Ties have been dogged by mutual suspicion, the legacy of a brief 1962 border war. China also views the presence in India of Tibet's spiritual leader the Dalai Lama, who campaigns for "genuine autonomy" for his homeland, as a serious irritant.
Mr Li said China understands "balanced trade is crucial to good ties between the world's two most populous countries" and that "a peaceful and stable South Asia is consistent with China's development interests".
"Only a dynamic trade balance is a sustainable trade relationship," he said.
"We will support Chinese enterprises to increase investments in India and help Indian products have access to Chinese markets."
India is seeking Chinese participation in its special manufacturing zones or SEZs being set up under its National Manufacturing Policy, which aims to sharply increase manufacturing to provide jobs for its growing army of young people.
Yesterday the countries signed deals to raise Indian access to China's drugs market and promote trade in fish and meat products.
Both nations' economies have slowed due to the global downturn and in India's case due to high interest rates, corruption scandals and government policy paralysis that have dampened business activity.
Mr Li also travelled to Mumbai before heading to Pakistan and later to Switzerland and Germany.