This did create scepticism among businessmen on both sides. Amongst others, the UNCTAD-DITE Global Investments Begween Assessmentestimates for put China and India at the top two ranks followed by the US as third Earlier China had exercised pressure on the bank to cease the loan, [67] however India succeeded in securing the loan with the help of the United States and Japan. CPI Sees Its Slowest Pace in Two Years. Gupta and Haiyan Wang. More specifically, the two also have a JWG for Trade and Commerce which is supported by a Joint Business Council that represents business interests, in particular of the non-state sector. Talks were held in New Delhi in February aimed at confirming established "confidence-building measures", discussing clarification of the "line of actual control", reduction of armed forces along the line, and prior information about forthcoming military exercises.




Search Booming bilateral trade has come to be the strongest pillar of China-India rapprochement. This has not only since overtaken the pace of political confidence-building but also has a substantial impact on their mutual perceptions. Their border trade has especially brought about a noticeable transformation in their remote and problematic border regions.

This has contributed to overall tranquillity and peace in the area and has as well facilitated progress in their border negotiations. This boom in trade has also introduced new trends. The two states are no longer only recipients on foreign direct investment but have entered into a new phase of being investors, both mutually as in other regions. In this new context, the increasing deficit in the energy sector and the competition to capture new markets present major challenges to sustaining this boom in their bilateral trade.

Especially, with their annual GDP growth rates standing respectively at 9. According to World Bank estimates, and assessed on the basis of purchasing power parity, China and India have already become respectively the second and fourth largest economies of the world surpassing developed countries 1. This unique combination raises several questions about their becoming major drivers in international economic trends.

However, in the politico-strategic sphere, their recent economic success has resulted in both seeking an expanded space in regional as well as international decision-making, something that is becoming a matter for worldwide concern. It is only rather recently that their political initiatives at confidence-building began to expand their areas of mutual co-operation, which now remains premised on their new mantra of mutual accommodation and mutual benefit 2.

Their bilateral trade has since come to be recognised as the most reliable as also the most agreeable instrument of China-India rapprochement. Their long-term potential as trade partners, however, remains yet to be fully explored and exploited and their political equations remain yet vulnerable to their problematic legacies 3. This China-India economic partnership remains an essential prerequisite for the success of their regional and global political initiatives.

At the bilateral level, this is self-evident in the way their rapidly growing trade partnership has provided a great boost to their ongoing political confidence-building. However, this boom in their bilateral trade could not have been possible in absence of bold political initiatives yet, in recent years, it is the role of their business communities that has become far more influential in determining the tone and tenor of their political interactions.

Apparently, adoption dog put up quotes from both sides have begun to increasingly focus on the social and political Changing bilateral trade between China and India of their bilateral trade. Much of the aforementioned success remains particularly true of China with India slightly behind. However, even without government initiatives, several sectors in India have picked up momentum and will continue to grow helping New Delhi to catch up with Peking.

For example, the number of skilled professionals from India are growing at enormous speed. Starting with an extremely slow pace with an annual turnover of only a few million dollars, and then staying on the margins for much of the s, their trade has gradually come to occupy the centre stage of their interaction. At least in the short-run, their current institutional arrangements and enthusiasm augurs very well for their continued trade boom, Changing bilateral trade between China and India can contribute a great deal to their growing confidence one in the other and their evolving long-term strategic partnership As a result of this, their complicated politico-strategic equations, that had continued to slow the rising enthusiasm, Changing bilateral trade between China and India come to be underplayed and marginalised.

This clearly reflects strong mutual stakes which promise to sustain this trade boom at least in the short term see Figure 3. Indeed, the two seem to be becoming increasingly relaxed about their bilateral ties and are now thinking of building joint strategies towards their regional and global initiatives. No-one today talks of a China-India clash in South-East Asia where both have built flourishing engagement without any mutual friction or scepticism. While so far they have not allowed this to become a major stumbling block yet their intensifying search for energy sources abroad is lately seen as one area that could post a serious challenge for their economic engagement Therefore, more than being measured in terms of statistics and profits, it is the political impact of trade which remains the barometer of their economic engagement.

Both sides clearly display that understanding at least in their more recent initiatives. Gradually, many new sectors—like border trade or high-tech trade—are being also explored while information technology and infrastructure development are already emerging as major areas Changing bilateral trade between China and India co-operation.

In absolute terms, as proportion of their total trade or even in terms of per capita trade this may present a dismal picture, yet trends in the growth rate of China-India trade show strong potential and have important political implications. The same also remains true of their foreign direct investment FDI inflows where China and India are often projected as either poles apart or competing against each other.

However, both have again continued to sustain growth simultaneously without any major friction. Their FDI remains perhaps the strongest mover of their foreign trade and especially in case of China it has come to be known as the main locomotive for their economic success. Even India is expected to emerge as the next hot spot for FDI inflows. Amongst others, the UNCTAD-DITE Global Investments Prospects Assessmentestimates for put China and India at the top two ranks followed by the US as third This, however, remains rather ambitious, especially for India.

Even for China, while it is expected to continue to leapfrog, it is likely to stay at its second position and may not surpass the US for a very long time. Also important is overseas Chinese contributions. Non-resident Indians and overseas Chinese have been distinct categories in FDI inflows into their respective homelands. More specifically, the two also have a JWG for Trade and Commerce which is supported by a Joint Business Council that represents business interests, in particular of the non-state sector.

They also have a JWG for Science and Technology that focuses more on research and development sectors. In operative terms, much of the norms and regulations for clearing road-blocks and evolving the new legal framework for trade are facilitated by their regular meetings. Besides, using such opportunities as Summits, many more agreements have been signed between individual Departments and Ministries from both sides This indicates their desire to go beyond the World Trade Organisation framework and mutually reduce tariffs even further as also to remove non-tariff barriers Indeed, in their meeting over March 21stndthe senior officials from China and India had launched the first round of discussions for signing a FTA agreement and a comprehensive economic co-operation agreement in Peking.

However, unlike their government, some Chinese experts continue to have strong misgivings. But mutual investments always reflect greater mutual confidence and provide a great boost to bilateral trade, especially in the long-run. And this is especially true when it comes to China-India bilateral trade. China virtually allowed no foreign investment until the early s. Also, considering that much of Indian investments remain in services, Hong Kong continued to be the most favoured destination as its obvious attraction as a hub of business and trading.

Indeed, it was from here that most Indian business houses made their debut in extending their operations into China mainland. However, given their political baggage of their problematic past, Chinese investment into India has not only continued to heavily fluctuate but also continue to suffer from a huge gap between their contracted FDI and their actual absorption in real projects on the ground. Comparing this with their overall performance in attracting FDI, both India and China have separately faired much better, which shows that the pace of their mutual investments still continues to be guided by their bilateral politico-strategic equations.

There have also been several other smaller and less known initiatives in IT education. There are various ways to examine how China-India trade and commerce were affected by these tests, and how bilateral trade proved to be a major catalyst in facilitating the post official and political interactions. More curious was the follow-up: China-India trade was to undergo an exponential boom these last seven years following the nuclear test as shown in Figure 1.

Indeed, a month-to-month change in China-India trade for presents a most startling picture of the business sector as the first to bounce back in a matter of six months, between May and November Beginning from the early s, while India had enjoyed a trade surplus duringandthe trade surplus was with China during, In fact, according to experts, the China-India trade was known to experience fluctuations even within each year as India generally enjoyed a trade surplus during the first half of the year while in China this trend was reversed during the last few months, every time.

This did create scepticism among businessmen on both sides. Academic exchanges were the second important sector to return to normal, not letting political polemics overshadow positive economic initiatives. Have these evolved any separation from their politico-strategic scepticism or do the two remain fatally intertwined? It had further slid to 5. Against this scenario, Chinese exports to India grew by a respectable 8. It has since risen to 0. Their trade relations have had a much stronger positive impact and facilitated their political turnaround which has potential for strong fundamentals for their trade relations.

No doubt, the two have so far handled their economic engagement deftly enough but their rise to capture global resources and markets is very likely to increasingly complicate their equations. For instance, in view of their rapidly rising demand for energy, recent months have seen China and India beginning to undercut each other in seeking control and stakes in various oilfields and oil firms Strands of possible economic competition do exist, and the chances of their bilateral trade emerging as a stimulant for an eventual political stand-off cannot be completely ruled out.

This means that this second phase of their bonhomie remains Changing bilateral trade between China and India yet pretty fragile. The workforce has increased from 1. None of these can be ignored as paper tigers and will provide both several new challenges and opportunities for China-India trade relations. It is especially this economic engagement between their non-state sectors that has now begun to provide steam to the China-India political rapprochement, promising to gradually emerge as an important force in moulding the nature and magnitude of China-India trade relations.

Nevertheless, given the multifaceted challenges for their economic engagement, the hope lies in the two being able to continuously innovative to strengthen and evolve their bilateral trade on the basis of mutual understanding and mutual confidence. Booming bilateral trade has come to be the strongest pillar of China-India rapprochement. The new context Strong fundamentals of China-India trade Economic versus strategic priorities.

PDF Send by e-mail. It was only from the early s that the two sides began to revive their close relations but progress has been slow with several hiccups. Culture and commerce has linked these two ancient civilisations since the second century BC. For details see Swaran Singh, China-South Asia: Issues, Equations, PoliciesNew Delhi, Lancers Books, He has also been a long-standing advocate of lowering of trade barriers and, decades earlier, had written his Ph.

D thesis at the University of Cambridge on the subject of the benefit of international trade to India. This argument clearly contradicts the conventional wisdom. Chittle and Kyoo H. Chakraborty, India China Free Trade: Examining the Likely Impact of the FTANew Delhi, ICTC Monograph Series Paper 1,p. Swaran Singh Top of page. OpenEdition Books Books in the humanities and social sciences.

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India - China Bilateral Relations >> Economic and Trade Relations: INDIA - CHINA ECONOMIC RELATIONS Embassy of India,Beijing. Changing bilateral trade between China and India considerable change in the pattern of bilateral trade between the two countries in the past decade. Bilateral trade between China and India, major trends of and changes in the bilateral trade between the two Changing bilateral trade between China and.