Trade high on agenda as India PM starts visit to China

[Nafees]

A long-standing boundary issue and trade deficit will be high on the agenda of a three-day state visit to China by Indian Prime Minister Manmohan Singh who leaves for Beijing today.

During the visit, the first by an Indian premier in five years, the two countries will sign five agreements on railways of the two countries, housing, land resources management, geo sciences and traditional medicines. Manmohan is to be accompanied by a large business delegation, led by Commerce and Industry Minister Kamal Nath “It's going to be a major business event”, said Indian Foreign Secretary Shiv Shankar Menon.

On a visit from the Chinese President Hu Jintao to India in November 2006, the two countries aspired to attain a trade target of 40 billion dollars by the year 2010. But that target has almost been reached, three years ahead of specified time, with bilateral trade nearing 39 billion dollars.

India and China are now expected to set a new target when Singh holds talks with his Chinese counterpart Wen Jiabao Hu, other communist leaders and Chinese business entrepreneurs.

A joint study group has come up with a report on a regional trade agreement between India and China. However, India is likely to go slow on the issue, while expressing its concerns over a widening trade gap in China's favour, from around a billion dollars to about nine billion dollars

“We would like to sell more to China. Over the last few years trade has shifted in China's favour and we are hoping to change that”, Menon said.

A memorandum of understanding covering the rail sector is designed to promote cooperation between Indian and Chinese railways.

The pact on land resource management would aim to boost bilateral cooperation based on principles of equality, mutual benefit and reciprocity.

The agreement on traditional medicines would provide a legal framework to jointly produce and market Indian and Chinese products in this field.

The Indian foreign secretary said the ongoing talks between India and China on the border issue gained momentum since the visits to India by Wen in April 2005 and President Hu in 2006.

 

[KENT]

Today's morning while reading my daily news paper, news on top of front page was highlighting concern about growning trade deficit between India and China escpecially inability of Indian Manufacturing sector to match its Chinese Counterpart in terms of Quality, Pricing, Branding. Chinese are aggressively promoting their product through the export in indian market. Raised in the value of Rupees has also proved to be unfavourable for Indian Manufacturing Unit and hence making them to import at cheap Prices rather concerntrating on Homegrown Products.

 

[mujahideen]

I have no problem with India-China friendship, but the question is that is the U.S. okay with this friendship.

 

[gpit]

A long-standing boundary issue and trade deficit will be high on the agenda of a three-day state visit to China...

On boundary issues, I personally remain largely pessimistic, by sensing strong nationalism on both countries.

Two solutions to trade imbalance problem on the Indian side: to impose protectionism and/or to raise competitiveness.

I believe there is also a similar imbalance problem in Sino-Pakistan trade.

 

[Cheetah786]

On boundary issues, I personally remain largely pessimistic, by sensing strong nationalism on both countries.

Two solutions to trade imbalance problem on the Indian side: to impose protectionism and/or to raise competitiveness.

I believe there is also a similar imbalance problem in Sino-Pakistan trade.

Protectionism days are long gone.if India was to do that others will follow suit and do the same to India.raising competitiveness is the only way to compete

And on Pakistan side we have too many politicians that owns or pretend to own manufacturing facilities.till they are removed from power Pakistan will face trade imbalance as they want to keep it that way..
As long as there own bank balance grow they don't give a ratz azz for any one else.biggest example nawaz himself.

 

[Contrarian]

Its not about protectionism.

Its about a tripple whammy from the Chinese side, Non tariff barriers, subsidized products and an undervalued yuan. These three things collectively cripple any kind of equal trade with CHina. There is a REASON why a lot of countries are complaining about China's trade practices.

 

[KENT]

As far as India is concerned, contemprory Political climate decide favourability of any kind of affair with foriegn nation. Since inception of Sino-India trade, India had maintained favourable trade balance in its favour till 2002, but then Politial interferene played its spoilsports. Recently events like Gujarat Election, Violence in Nandigram and Singur played a major role in overlooking and diverting attention from Foreign Trade. Whenever there is trade exibition being held in India, Chinese Buisness and Traders aggressively promote their products as well as very curious to tie up with their Indian counterparts. All such factor are contributing towards infavourable trade balance in india's favour.

 

[su-47]

India can take a leaf out of China's book. we can try following their trade practices once our manufacturing industry picks up. also, we should see HOW the chinese went from a poverty stricken nation in the 60s to the manufacturing superpower it is today. if its possible, we should follow their steps and hopefully we can also be a manufacturing power in the coming decades.

 

[KENT]

Mind set of owner of Manufacurting sector is only centric towards gaining as much as wealth as possible, even in my locality there are several manufacuring units, but it seems to me there is absense of kind of organised framework that is need for ideal yield high retruns. In order to make our manufacuring units more competitive, our government need to create massive awareness to ramp up there production line, encourage them to undertake stringent Research and Development works, Obligatory Quality Check up for every products and attractive incentives for promoting the products for exports.

What our government immensely need to focus on Small Scale units, provide them as much as protection as possible and for that matter there is need for strong political will to promote products of small scale units as well as create awarness among small scale unite to feautre their products in high profile exhibition.

 

[Cheetah786]

Its not about protectionism.

Its about a tripple whammy from the Chinese side, Non tariff barriers, subsidized products and an undervalued yuan. These three things collectively cripple any kind of equal trade with CHina. There is a REASON why a lot of countries are complaining about China's trade practices.

Hate to tell ya Mate u do the same to other countries.but the one difference between u and china is they are controlling there money and there is nothing u can do about it.Americans have been trying for years to convince Chinese so far they haven't made much difference.

 

[Contrarian]

India does not secretly subsidize its products. The subsidies that are given are open in nature and accounted for. Neither is our currency undervalued, the phenomenal rise of the Rupee is proof of that. Our exports are hit badly by any currency rise. These two are the single biggest factors that prevent China from having equitable BoP with any country.

India has a problem of Non Tariff Barriers, but not near the level as China. And to remind you Pakistan has a FAR bigger trade deficit against CHIna as compared to India.

 

[Black Stone]

India can take a leaf out of China's book. we can try following their trade practices once our manufacturing industry picks up. also, we should see HOW the chinese went from a poverty stricken nation in the 60s to the manufacturing superpower it is today. if its possible, we should follow their steps and hopefully we can also be a manufacturing power in the coming decades.

I agree with this.

 

[Energon]

India can take a leaf out of China's book. we can try following their trade practices once our manufacturing industry picks up. also, we should see HOW the chinese went from a poverty stricken nation in the 60s to the manufacturing superpower it is today. if its possible, we should follow their steps and hopefully we can also be a manufacturing power in the coming decades.

India and China are two incomparable models as far as manufacturing is concerned. China's growth is a state sponsored one which is an authoritarian system that has the ability to control its workforce and manipulate it's currency at will. India does not have the ability to do this since the growth is being fueled by the private sector despite the central government. There is no way Indian companies can every exert heavy control over their labor force in order to maximize production while keeping wages in check. Subsequently, the currency is far more dependent upon market economics and can't be manipulated by the government to shift the trade margins in it's favor.

India is going to have to be selective in their production base which can remain globally competitive and then cash in on the service sector. The Indian companies can also tap the vast market at home by being innovative. Also India may not have the ability to play with it's currency to improve trade with wealthy western states, but they have the option to mobilize their influential NRIs.