Sunday, December 19, 2010


Chinese premier Wen Jiabao was in India for a three day visit recently. This was a significant visit as many deals were expected to come through. This prompted me to find more about the current status of Indo-China relation. After doing some secondary research I came to know that even though there are significant political issues such as border disputes, stapled visa for kashmiris, Brahmaputra dam etc., there is a bright side of this relationship. What struck me most was the trade growth between the two countries for last five years and the great untapped potential. The trade growth has been phenomenal between the two countries as it has grown from mere $ 5 bn to $ 45 bn in last five years. This is achieved when the relationship with China has not been on the right side of the equation. India’s concern has been rightly about the large trade deficit it has with China which is at $ 19 bn i.e. staggering 42 percent. To make this trade growth sustainable and beneficial for both countries China will have to do more and open its markets for India. India exports the world quality Pharma products, Tea, Fruits etc. which have not got access to huge chinese markets yet. India, on the other hand, can also take immense benefit from the chinese expertise in plant machinery by opening its power sector. To put things in perspective, China adds 100,000 mw power generating capacity each year whereas India has managed to add only 60,000 mw capacity in last 5 years. The collaboration will go a long way in India’s quest for energy security. China and India constitutes the two-third of the world population and both are growing at the rate of above 8 percent. There is a great opportunity beckoning for both countries to get their act together in leapfrogging to an even higher growth trajectory by collaborating at a much larger scale and leaving the past bitterness behind. If recent disputes are anything to go by, this seems far from being happening.

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