Sino-Indian trade tonic

India and China today decided to increase two-way trade by two-thirds to $100 billion over the next five years and to set up a Sino-Indian chief executive officers' forum, which would help evolve trade and investment policies of the two nations.

In a joint communique, Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao also decided to reduce the trade imbalance between the two countries, which stands at about $20 billion, by giving Indian products and services greater access to the Chinese market. Indian and Chinese banks were also allowed to set up branches in each other's territories.

"There is enough space in the world for the development of both India and China and indeed enough areas for India and China to cooperate," said the communique. The two sides have shown interest in cooperating in bidding for energy assets abroad instead of bidding against each other, with Wen underlining the possibility of such cooperation in his talks with Indians. Though this policy had been advocated by India earlier, China had not taken it seriously with gas and oil field prices still at reasonable levels and the value of its forex reserves at an all-time high. However, with oil asset prices rising and the dollar value falling, China, analysts said, was now willing to look at cooperation possibilities.

The two nations that have fought a war over a disputed border in 1962 and have been seen as economic and political rivals welcomed "each other's peaceful development" and regarded "it as a mutually reinforcing process". They believe their growing relationship offers increasing opportunities to advance their cooperation. India "welcomed Chinese investment in infrastructure", an euphemism for allowing China to invest in power and roadway projects, areas where investment proposals were regularly held up on security concerns. "They agreed to encourage greater mutual investment and project-contracting cooperation between businesses of the two sides, appropriately handle economic and trade frictions and differences and jointly oppose protectionism in all forms," said the communique. The two sides also agreed to expand economic cooperation, especially in infrastructure, environmental protection, IT, telecommunications, investment and finance. 

Source: http://www.telegraphindia.com

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