The Hindu : Front Page : India has no option but to engage China: Manmohan

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Monday, Jan 14, 2008
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India has no option but to engage China: Manmohan

Pallavi Aiyar

“We will compete and we will cooperate because there is enough space in the world for both of us”

Offer products of value, India Inc told
New trade target likely to be announced

Beijing: Prime Minister Manmohan Singh met captains of Indian industry here on Sunday afternoon to take measure of their concerns and requests regarding the government’s role in shaping the evolution of cross-Himalayan economic ties.

The half-an-hour-long meeting was held a day ahead of a speech that Dr. Singh will give at a business meeting organised by the China Council for the Promotion of International Trade on Monday morning. The Prime Minister is expected to use this speech to spell out his vision of the future of the Sino-Indian economic engagement.

The Indian business delegation, which included top brass like Zee’s Subhash Chandra, Jet Airway’s Naresh Goyal and Hero Honda’s Pawan Munjal, raised several issues that they asked the Prime Minister to take up with the Chinese side.

“Predatory pricing”

These included concerns over what they described as China’s “predatory pricing” policies, the use of hidden subsidies and the continuous and unpredictable changes in the country’s regulatory environment.

According to Amit Mitra, secretary general of FICCI (Federation of Indian Chambers of Commerce and Industry), who was also present, “Indian industry feels that the cost of Chinese products include many non-market elements, whereas our industry is tuned to a competitive and transparent process.”

India Inc is as a result urging the government to exercise restraint when it comes to undertaking a potential Regional Trade Agreement with China. Their apprehensions are also fuelled by the widening surplus that China enjoys in its bilateral trade with India. For 2007, India’s deficit stands at around $10 billion.

“Think long-term”

In response to these concerns, the Prime Minister said that while he would try and bring some of them up during his meetings with the Chinese leadership over the next two days, the deficit with China needed to be addressed in large part by Indian industry itself.

He said India needed to offer the Chinese products of value to them, so as to make them stakeholders in India’s development.

“India has no option but to engage China and give China a stake in India,” Dr. Singh said, adding that “while the trade deficit is a source of worry we must think long-term and engage more with China.”

He called the growth of India and China, “an international public good,” and said that “at a time when the world is worrying about global recession, sustained growth in India and China can help the world economy.”

A historic necessity

He told the big wigs of corporate India that his message was that working with China was “a historic necessity.” “We will compete and we will cooperate because there is enough space in the world for both of us,” he concluded.

During the Prime Minister’s meeting with Premier Wen Jiabao on Monday, it is likely that India and China will announce a new trade target. The previous target of $40 billion by 2010 was almost met last year itself and will most likely be crossed later this year. Bilateral trade in 2007 stood at $38.6 billion.

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