India-China Buy-Buy

[TechLahore]

What exactly is your point? If it is that the trade as of now is skewed in favour of China,realise it gives India quite a bit of leverage.

The point was made in the article; that the Chinese do not appear to be resolving any disputes with India and are prolonging the status quo to continue a trade dynamic which suits them just fine, but is detrimental to India (deficits, racking up debt as per below etc.)

The trade relationship(since China does not buy any Indian bonds) is far more important to China as it currently stands.

Yes, but Indian companies are now indebted to Chinese banks to the tune of billions. This is a new trend and one that should be watched closely.

If China does not give access to Indian Pharma & IT companies, then be rest assured there will be pressure building up to squeeze Chinese imports. There is no such thing as a free lunch in international trade.

You may be right. But when it happens we'll talk about it. Thus far, China has had its cake (not resolved any pending strategic issues) and eaten it too (maintained the upper hand in Sino-Indian trade).

India's importance to China will only grow as it becomes an important trade partner. China's importance to India is currently not high especially since iron ore exports are facing opposition. If China does not move quickly to change that, sooner or later they will find themselves squeezed. There are enough indications that the Chinese will move towards rectifying that imbalance.

I posted a URL from an Indian newspaper above lamenting the reduced importance of India to China since the Chinese were diversifying ore imports and buying more from other countries at India's expense.

Also, I don't know what you mean by "squeeze", but I don't think India is in a position to economically "squeeze" China. If you mean India will stop importing stuff from China, I don't see how even a reduction down to 0% from the current $30.8B of Indian imports will impact a country that exported $1.5 TRILLION in 2010. China's export to India represents 2% of its exports to the world. And that is assuming that China cannot replace Indian imports by selling these goods to other markets.

India imports 30.8B of Chinese goods: India vs China: How the 2 giant economies compare - Rediff.com Business

China exports $1.5T to the world:
China on Course to Export More than USD 1.5 Trillion in 2010 - The China Sourcing Blog

So no, I don't see how India puts the squeeze on China.

 

[Dalai Lama]

Life can be so simple in region

India needs noodle
China needs curry
Pakistan needs curry noodle ...

US is kabab main haddi

So lets get rid of the haddi - and all region will have peace and lets give back Kashmir back to us

Thanks!

 

[Yeti]

Private company like Reliance using finance be it Chinese funds or US does not really matter they are going to go with the best deal:

Reliance Power said on Wednesday it had received final commitment from Chinese banks for $1.1bn of loans.

“The Chinese do a great job when it comes to financing deals,” said an executive at Reliance Communications. “We save about $100m a year compared to what we would [have to pay in interest] in India – that’s a lot of money.”

Reliance will pay 5 per cent interest to China Development Bank, compared with the standard 12 per cent it would have to pay an Indian bank.

 

[TechLahore]

Private company like Reliance using finance be it Chinese funds or US does not really matter they are going to go with the best deal:

Reliance Power said on Wednesday it had received final commitment from Chinese banks for $1.1bn of loans.

“The Chinese do a great job when it comes to financing deals,” said an executive at Reliance Communications. “We save about $100m a year compared to what we would [have to pay in interest] in India – that’s a lot of money.”

Reliance will pay 5 per cent interest to China Development Bank, compared with the standard 12 per cent it would have to pay an Indian bank.

Great! The Chinese are more competitive in this area too.

Based on this logic, all Indian private industry should borrow from Chinese banks only. Do you know what the net-result will be in macro economic and strategic terms?

It's ok for a businessman to make an independent decision which is driven by this kind of thinking - saving a few points - but not for a country.

 

[Yeti]

Great! The Chinese are more competitive in this area too.

Based on this logic, all Indian private industry should borrow from Chinese banks only. Do you know what the net-result will be in macro economic and strategic terms?

It's ok for a businessman to make an independent decision which is driven by this kind of thinking - saving a few points - but not for a country.

Yar Reliance is a private company of course they will go with the cheapest APR finance they offering 5% compared to say 12% from Indian banks only a fool will pick the latter.

Also China has like over $2 trillion just sitting in FR they can afford to give out such loans and finance who else in this current economic climate can give such loans?

One intresting thing to note is the executive from Reliance said this:

“Obviously, the Chinese then expect us to give something back, so we will buy their [equipment] but that works well for us,” the executive added


I agree yes we have a high trade defecit with China which is a real concern but look more closely why reliance place $10 bn order for Chinese power generation equipment or a Chinese firm win contract for the Mumbai metro trains? because the simple fact is that we do not have the capacity in India to fulfill these orders and China is cost effective it pains me to say it but its true.

 

[somebozo]

How can India talk about rising courtesy of few rockets and missiles made from stolen technology, fighters and choppers glued together with foreign components and still unable to establish its industrial base??

 

[LaBong]

I wouldn't use terms like "loser" because this just gets people emotional. Much better to simply state things as simply as possible.

The Chinese engagement with Pakistan does actually center on investment. Of the roughly $40B worth of deals announced during Premier Wen's visit, most of them were investments in infrastructure and ventures. This is the exact opposite of what he did in India.

Yes, but how Pakistan-China business deals are relevant in this context? Would it solve the trade deficit we have with China if China doesn't invest in Pakistan?

The topic is about the trade deficit China has over India and India failing to reduce the same till now. If it's about how Pakistan scored more point or got louder pat from Wen then all I can say goodluck to you!

 

[DesiGuy]

but i thought Indian and Chinese can't work together....well, according to Russell peters. lol

 

[LaBong]

The point was made in the article; that the Chinese do not appear to be resolving any disputes with India and are prolonging the status quo to continue a trade dynamic which suits them just fine, but is detrimental to India (deficits, racking up debt as per below etc.)



Yes, but Indian companies are now indebted to Chinese banks to the tune of billions. This is a new trend and one that should be watched closely.



You may be right. But when it happens we'll talk about it. Thus far, China has had its cake (not resolved any pending strategic issues) and eaten it too (maintained the upper hand in Sino-Indian trade).



I posted a URL from an Indian newspaper above lamenting the reduced importance of India to China since the Chinese were diversifying ore imports and buying more from other countries at India's expense.

Also, I don't know what you mean by "squeeze", but I don't think India is in a position to economically "squeeze" China. If you mean India will stop importing stuff from China, I don't see how even a reduction down to 0% from the current $30.8B of Indian imports will impact a country that exported $1.5 TRILLION in 2010. China's export to India represents 2% of its exports to the world. And that is assuming that China cannot replace Indian imports by selling these goods to other markets.

India imports 30.8B of Chinese goods: India vs China: How the 2 giant economies compare - Rediff.com Business

China exports $1.5T to the world:
China on Course to Export More than USD 1.5 Trillion in 2010 - The China Sourcing Blog

So no, I don't see how India puts the squeeze on China.

I hope Chinese don't think in your way that as the trade is now minuscule compared to China's total export, there's no room for growth. Hopefully Chinese, as clearheaded as they ever are, can see the market of 1.2 billion which is adding several millions to middle class at every passing year.

When you post a URL from whatever source and defending the same, then you're guilty of the same lamenting that the author did. Don't maneuver yourself off the counter argument citing the author again and again. It's the personal opinion of author and he being of the same nation as I am, doesn't make us his cohort.

I still don't understand why such priority is given to steel import! As I told you earlier India still is 5th largest producer of steel and growing at 7.5% pace. As we are putting up a massive infra so the need of steel is so high and we should be thankful to Chinese for helping us to sustain our need.

 

[fallstuff]

I wouldn't use terms like "loser" because this just gets people emotional. Much better to simply state things as simply as possible.

The Chinese engagement with Pakistan does actually center on investment. Of the roughly $40B worth of deals announced during Premier Wen's visit, most of them were investments in infrastructure and ventures. This is the exact opposite of what he did in India.

Let me say this first , "TechLahore you are an awesome Moderator."


I am curious as to how much of these Chinese investments in Pakistan need to be paid back or not ?

I asked the same question in a different thread but didn't get any reply.

 

[huzihaidao12]

Let me say this first , "TechLahore you are an awesome Moderator."


I am curious as to how much of these Chinese investments in Pakistan need to be paid back or not ?

I asked the same question in a different thread but didn't get any reply.

All investments will get it in return, but you should think, why there is no country do the same thing in Pakistan or India, if you simply want short-term returns.

 

[LaBong]

All investments will get it in return, but you should think, why there is no country do the same thing in Pakistan or India, if you simply want short-term returns.

Lots of country doing that to India.

Anyway any sort of investment provide much needed cash-flow to the economy.

 

[huzihaidao12]

Lots of country doing that to India.

Anyway any sort of investment provide much needed cash-flow to the economy.

FDI declined by 38%?

 

[huzihaidao12]

China will all investment even more again in Pakistan, it is almost for sure.

 

[LaBong]

FDI declined by 38%?

There is no pattern. It will increase once again.