3 keys for unlocking India-China economic ties: New Steps, New Horizons

The 19th National Congress of the Communist Party of China was concluded in October. In the meeting, Comrade Xi Jinping, General Secretary of the CPC Central Committee and President of the People’s Republic of China (PRC), reviewed the achievements of the past five years and charted a new course for China’s future political, economic, cultural and social development. President Xi’s report pointed out the right direction for developing China-India economic and trade relationship. In the future, following the principles of the 19th National Congress of the Communist Party of China, we will use three “keys” to unlock the potential of balanced and mutually beneficial China- India economic and trade cooperation in the “new era”.

First, build key relationships – to become trading partners based on equality and mutual benefit. As mentioned in the report of the 19th CPC National Congress, China remains firm in its commitment to building a community with a shared future for mankind and forging a new form of international relations featuring mutual respect, fairness, justice, and win-win cooperation. These are core principles China adhere to in attaining peaceful development and participatory global governance. China and India are good neighbours, friends and trading partners.
Since 2014, after President Xi visited India, the two leaders have met more than 10 times on various occasions, reached an important consensus and charted the right direction for China-India economic and trade cooperation. In the BRICS Xiamen Summit this September, President Xi stressed the importance of “the dragon and elephant dancing together” and underlined the imperative of avoiding conflicts. Prime Minister Modi also emphasized that with good bilateral relationship, 1 plus 1 could equal 11. To achieve this, we should further our practical cooperation and utilize intergovernmental and inter-corporate cooperation mechanisms to improve our economic strength and competitiveness.

With the economic and trade mechanisms like JEG, SED and China-India Financial Dialogue playing more important roles, our strategic synergy will be enhanced, trade and investment will be facilitated, bilateral trade will be more balanced and massive project cooperation will be more active. All these will lead to a spectacular future for our economic development. Meanwhile, we should also strengthen our cooperation and coordination in WTO, RCEP and other multilateral mechanisms to promote globalization and protect the overall interests of developing countries and foster more inclusive, equal and mutually beneficial economic and trade relations.

Promoting Balanced Trade

Second, focus on key issues- to build a more balanced trade structure. The 19th CPC National Congress stressed that China would pursue open, innovative, and inclusive development that benefits all, that China would not close its door to the world but would only become more open. For a long time, the imbalanced trade between China and India has been a stubborn obstacle, holding back our economic and trade relations. I’m very happy to see that with joint efforts from both sides, our trade volume may exceed $80 billion this year, reaching a five-year high. More importantly, China’s import from India has increased more than 20% while export to India remains nearly the same.

In 2018, China will host the first China International Import Exposition. This is the first large scale import themed exposition and an innovation in international trade development. We welcome the Indian businesses to showcase Indian products at the expo, along with goods from all over the world. We believe this will open new channels for Indian goods reaching Chinese families. We will work on expanding our cross-border trade, import more agricultural products from India, and promote build-to-order business models. We hope to finish FTA to enhance the level and scale of our trade, increase our import from India, opening our market wider and achieve more balanced trade with India.

Third, develop key areas-to build a mutually beneficial investment system. As emphasised in the 19th CPC National Congress report, China would give equal importance to “bringing in” and “going global,” following the principle of achieving shared growth through discussion and collaboration; and be more open and cooperative to enhance innovation capacity. With these efforts, we hope to break new grounds in opening China further through links running eastward and westward, across land and over sea. China has always made outbound investments to create mutual benefits. As statistics show, from 2012 to 2016, Chinese corporations have paid more than $13.7 million in taxes, created over one million jobs, and made contributions to host nations and the world economy.

In recent years, many economic and trade agreements in industrial park and cooperation on production capacity have been signed between China and India, establishing great platforms for investment cooperation. A group of famous Chinese corporations like Alibaba, Fosun, SAIC Motor and China Fortune Land Development have come to invest in India. These corporations not only provided funding and technical support for “Make in India” and “Start-up India” and reduced trade deficit between the two countries, but also provided jobs and tax revenue for their host states. They are highly recognized by the state governments. On November 16, I attended the Haier’s Industrial Park（Pune）Inaugural Ceremony. During the event, I had an in-depth discussion with Maharashtra Chief Minister Devendra Fadnavis. He praised the progress Haier has made in Maharashtra and called it a great epitome of foreign enterprises participating “Make in India”.

This year, in the World Bank’s Ease of Doing Business Index, India’s ranking jumped from 130th to 100th, making one of the biggest improvements among all the countries. This will further encourage Chinese corporations to invest more in India on this trend, we should work harder to optimize investment environment, push forward the revision of bilateral agreements like investment protection agreement and agreement for the avoidance of double taxation. This will create a better investment environment for corporations, regulate Chinese corporation’s investment in India and realize the social responsibilities of the corporations. Moreover, we should encourage Indian corporations to invest in China in areas with comparative advantages, like pharmacy and IT. In this way, we can create a friendly, complementary and mutually beneficial two-way investment system.

As an ancient Chinese poem goes, a thousand sails pass by the shipwreck, ten thousand saplings shoot up beyond the withered tree — new things come to the fore while old things perish. As China’s Ambassador Luo Zhaohui said time and time again, China-India relations cannot afford to wander, stall or go backwards.
We need to move in the right direction and implement the consensus our leaders reached at the Xiamen Summit. We should focus on cooperation instead of differences and solve problems to create a more health bilateral relationship. I believe, with the guidance of our leaders and the guiding principles of the 19th National Congress of the Communist Party of China, India-China economic and trade cooperation will bring real benefits to our governments, business communities and ordinary people. It will become the bedrock and anchor of our bilateral relationship. With the development of this relationship, the day when “China and India speak in one voice, and the world listens” will come soon.