India and China must Join Hands to sustain Growth Momentum
“India and China have been posed with the challenge of sustaining their growth momentum. In order to promote growth the two nations must join hands. The two economic super powers comprise the global growth engine besides being the largest consumption and manufacturing markets world over. To address the sluggish growth prospects posed by economic slowdown the economies must collaborate rather than compete”, said Dr. Liu Youfa, Consul-General of the People’s Republic of China in Mumbai during an interactive meeting organized by All India Association of Industries and MVIRDC World Trade Centre Mumbai with the Consulate of the People’s Republic of China in Mumbai.
Enumerating on the need for complementing mutual complementarities Dr. Youfa said that China holds expertise in the manufacturing sector while India is home to a thriving services industry. The manufacturing sector of China contributes to nearly 47% of Chinese GDP while India contributes meager 24%. India must tap the surplus manufacturing capacity of the Chinese manufacturing hub. On the similar lines China can look forward to sharing expertise of the Indian medical, IT and education sector.
Touching upon other areas of mutual cooperation Dr. Youfa said a precondition to economic progress is infrastructural development. The Indian economy intends to invest US$ 1 trillion in its infrastructural sector. Chinese entrepreneurs must explore investments in this sector. Also, cooperation in the areas of capital market investments, modern agriculture, tourism, education, etc may be explored.
Further, Dr. Youfa addressed the critical question of trade imbalance between India and China. The bilateral trade worth US$ 65.8 billion is highly skewed in favour of China with a trade surplus of US$ 38.7 billion. To address the trade imbalance it is vital that India identifies tradeable goods with China. Secondly, India holds a potential trade surplus with the Chinese economy if it is to explore services trade export. Lastly, two-way flow of FDI between the two economies (into sectors such as infrastructure, education, IT, medicine) will address the gap in the trade imbalance, Dr. Youfa noted.
Addressing the question on the trade imbalance Mr. David Sinate, Chief General Manger, Export-Import Bank of India said the Export-Import Bank of India study explored the import demand in China vis-à-vis India’s export capability. The identified potential tradeable goods for Indian exports are electrical and electronic equipments, fuels, machinery, medical instruments, transport vehicles, plastics, pharmaceutical products, inorganic chemicals, etc. The EXIM Bank stands to finance and facilitate India’s trade and investment with China through pre-shipment and post-shipment finance, advisory services and knowledge building, Mr. Sinate added.
Present on the occasion were Mr. Arun Sehgal, President, Chempro Group and Mr. Haresh Advani, CEO, Basant Enterprise who shared their business and working experiences with China.
Earlier, in his welcome remarks Mr. Vijay Kalantri, President, All India Association of Industries and Vice-Chairman, MVIRDC World Trade Centre Mumbai said trade and economic relationships between India and China have shown rapid progress in the last few years. The bilateral trade worth US$ 3 billion in the year 2000 has crossed US$ 65.8 billion in 2012-13. However, the issue of trade imbalance in favour of China lingers. It may be addressed through cross border capital flight and diversifying areas of mutual cooperation to services, tourism, medicine and education, Mr. Kalantri added.
February 26, 2014
From L-R: Mr. David Sinate, Chief General Manger, Export-Import Bank of India, Mr. Arun Sehgal, President, Chempro Group, Dr. Liu Youfa,Consul-General of the People’s Republic of China in Mumbai, Mr. Vijay Kalantri, President, All India Association of Industries and Vice-Chairman, MVIRDC World Trade Centre, Mr. Haresh Advani, CEO, Basant Enterprise and Ms. Rupa Naik, Executive Director, All India Association of Industries and Director – Projects, MVIRDC World Trade Centre during a seminar on “Trade & Investment Opportunities in China” organized by All India Association of Industries and MVIRDC World Trade Centre with the Consulate of the People’s Republic of China in Mumbai