Concluding Delhi visit, Li promises more investments, trade

Today as China's Premier he offered 'handshake across the Himalayas in order to get a bird's eye-view of growing Indo-China relationship

Namaste! That’s how Chinese Premier Li Keqiang greeted his audience comprising students, industrialists, academicians and politicians here today. Li, who otherwise gave his entire speech in Chinese, said he was really happy to utter the word namaste, which he had learnt during a visit to India as a communist youth leader, 27 years ago. Now, as China’s Premier, he offered India a “handshake across the Himalayas in order to get a bird’s-eye view of the growing Indo-China relationship”.

Li, 55, urged Indian leaders to explore the Chinese market to increase their investments there, with competitive products. He also urged Chinese companies to identify sectors in which China could push more investments, something Prime Minister Manmohan Singh had told Li during their meeting yesterday.

“We (China and India) are huge markets, with huge potential. Our industrial structures are highly complementary. Our  markets are connected…We will remain committed to market-oriented reforms. China will provide cooperation to increase India’s exports. By exploring the market, we will be able to identify competitive products in each other’s markets. I also urge Chinese companies to look at India more carefully. We have the ability to mitigate trade imbalance,” Li said at an event organised by the Indian Council of World Affairs.

On India’s trade imbalance with China, he said China “does not enjoy having a trade surplus with India”. It would find ways through which Indian exporters could get greater access to the Chinese market.

Trade between India and China rose from $2.09 billion in 2001-02 to $75.59 billion in 2011-12, before falling to $67.83 billion in 2012-13. Simultaneously, India’s trade deficit increased from $1.08 billion in 2001-02 to $40.77 billion in 2012-13, despite 10.27 per cent contraction in total trade.

In 2012-13, China was India’s fourth-largest trading partner, against third-largest in 2011-2012, as exports fell from $18.08 billion to $13.53 billion, according to Ministry of Commerce & Industry data.

Today, Li said China was committed to expanding the scale of economic cooperation with India by establishing industrial parks and economic zones here. He highlighted the need to expedite the process of creating the BCIM (Bangladesh, China, India and Myanmar) corridor, which, he said, would open new avenues of economic ties and lead to greater integration of South Asia with the Association of Southeast Asian Nations.

China ranks 31st in the list of countries contributing foreign direct investment (FDI) to India. Currently, FDI inflows from China stand at $0.575 billion, while those from India to China stand at $0.898 billion, according to ministry data. Major Chinese companies present in India include Huawei, ZTE, Haier, Sino Steel, Lenovo, Beijing Automotive Industrial Corporation, Xindia Steel and SANY. Li stressed India and China should create new models of connectivity and strengthen trade across the border. He reiterated the need to launch negotiations for a bilateral trade pact under the Regional Trading Arrangement (RTA).

However, External Affairs Minister Salman Khurshid said talks on a bilateral trade pact with China would start only after India resolved the trade deficit issue with that country. “The Chinese side suggested an RTA, but we have said this RTA should come sequentially, after we arrest the issues of trade with them…because whatever we do beyond that, we also have to take into account other countries in our neighborhood,” Khurshid said.

Li, who would leave for Pakistan tomorrow, said China was impressed to see India’s growing influence in the international arena. He pledged China’s support for India at the United Nations. “When China and India will speak in one voice, the world must, and will, listen. A distant relative may not be as useful as a close neighbour. We have far more common interests than our differences.”

He said though China was the world’s fastest growing economy, it remained a developing country, as the country’s per capita gross domestic product was a mid-level one. Also, poverty was still a concern there, he said.

Later today, Li is scheduled to address Indian industry leaders in Mumbai and sign 13 deals across sectors such as energy, aviation and infrastructure.