China allays India’s concerns over trade deficit

NEW DELHI - Ahead of Chinese Premier Wen Jiabao’s visit, China Monday allayed India’s concerns over the widening trade deficit, estimated to be $19.2 billion, and pitched for greater business and investment, including opening of Chinese banks in India.

“China does not purposely seek trade surplus with other countries. In the long run, a wide trade gap is not healthy and tenable, Chinese ambassador Zhang Yan said at a round table of experts organised by the Federation of Indian Chambers of Commerce and Industries (FICCI).

“The development of diversified trade, tourism and investment cooperation would be crucial for reducing the trade imbalance (currently in favour of China) and achieving the bilateral target of $60 billion this year, Zhang said.

The trade imbalance and investment-related issues will figure prominently in discussions between Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao here Thursday.

Wen begins a three-day visit to India Wednesday, his second to the country. Around 400 top Chinese businessmen are accompanying the Chinese premier to Delhi in search of deals.

“The trade deficit is huge, estimated to be $19.2 billion. This is more than the GDP of many countries, FICCI Secretary General Amit Mitra told IANS.

Pressing India not to let the border issue stand in the way of developing closer ties, the envoy called for starting the process of moving towards a regional Free Trade Agreement along with effective measures to remove trade and investment barriers.

The envoy added that while 10 Indian banks were operating out of China, no Chinese bank was operating in India. However, he expressed the hope that the Industrial and Commercial Bank of China would soon be given permission to start operations in India.

Foreign Secretary Nirupama Rao agreed on the need for scaling up trade and investment between the two continent-sized neighbours. She said that India was looking at greater investments by China in this country, particularly in the infrastructure sector.

“We need greater synergy and dialogue to explore the lessons that we could draw from the Chinese model of infrastructure development for the benefit of the business and engineering community of the countries, she said.