Thursday, September 29, 2011

India-China Trade Talks: Fast Track towards Greater Milestones

The respective national interests always determine the foreign and trade relations between two countries. Moreover, in today’s world it is the economy that is often the crucial driver in ensuring smooth and cordial bilateral relations often leaving the otherwise differences into the backburner.
The recent India-China trade talks in Beijing, therefore, must be seen in that perspective.
At the talks between Indian side led Planning Commission Montek Singh Ahluwalia and Chinese side led by Chairman, National Development and Reform Commission, Zhang Ping both the countries have agreed to enhance co-operation in infrastructure development, particularly in the railway sector on the basis of mutual complementarities and benefit. The two sides also agreed to strengthen communication on macro-economic policies, share development experiences and enhance coordination in addressing the common economic challenges.

The two sides also agreed to strengthen cooperation on energy efficiency
and conservation as well as on environmental protection with an eye to promote sustainable development.

The strategic economic dialogue is the brainchild of the Chinese premier Wen Jiabao and Prime Minister Dr Manmohan Singh, and is largely seen as aimed towards addressing the basic issue that the India-China trade deficit over the last couple of years has grown bigger.

Obviously, this does not augur well for the emerging economies.
On the other hand, there is no denying both the countries are key members of emerging international bloc BRICS and as such have important role to play jointly as emerging economies in the region.

The trade deficit has already reached 14 billion US dollars this year, where as India's trade with China is expected to touch 70 billion US dollar this year.
The two sides now hope to scale up the trade ties to 100 billion US dollars by 2015, with Indian side especially looking for greater cooperation in IT, pharmaceuticals and engineering products.

There is gradual appreciation to these vital facts even among the Chinese leadership. The Chinese delegation leader Zhang was therefore right in his diagnosis that both India and China are faced with identical problems in pursuing developmental activities.
"Closer cooperation will not only benefit our two countries but also
help boost the confidence of developing countries as a whole,” quote unquote, he said.
This spirit was unequivocally appreciated by Indian delegation leader Montek Singh Ahluwalia and hence the maiden strategic economic dialogue has rightly sought to deepen bilateral investments, further open up markets and share developmental experiences.

Taking these initiatives further, yet another key development is the setting up of an India-China CEO Forum to enhance economic engagement and to make corporate sectors party to this cooperation.

True, over the past decades both the countries have got embroiled into skirmishes and diplomatic differences; but now both the sides are sincere about what they say, “enhance pragmatic cooperation” in economic sectors.
The economic policy makers on both sides agree that both the countries have their own limitations in handling the respective domestic macro-economic situations and therefore there ought to be the mid and long-term economic and social development plans.
This can be achieved only by mutual cooperation between two emerging economies.
In the recent times, both China and India have come together even in dealing with major global issues like climate change. Both have also tried to give a tremendous momentum to the BRICS conglomeration.

India on its part has been pursuing to build up a relationship of "cooperative partnership" with China.
It’s true, the history of 60 years relations between the two countries cannot be simply put on the backburner. But it goes without saying that at least on economic and trade front, both tend to benefit immensely by mutual cooperation.
For reasons best known to diplomatic historians, strategically both the countries have not been natural allies. But on the economic front they probably owe to each other and more importantly to their respective interests to cooperate. This ‘pragmatic’ roadmap would definitely put both the countries on a fast-track towards the higher plane of achievements.

(ends)

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