By Liu Zongyi Source: TDB
Editor’s Notes: An Indian magazine conducted an exclusive interview with Liu Zongyi, a senior fellow of Shanghai Institute for International Studies (SIIS), and also a visiting fellow of Chongyang Institute for Financial Studies at Renmin University of China (RDCY) China-India bilateral relationship, which published at the issue 10 of The Dollar Business (TDB) Magazine. More details are as follows.
TDB: How would you describe the growth of the China-India bilateral relationship so far?
Dr. Liu Zongyi (LZ): I think the India-China bilateral relationship improved significantly only after former Indian Prime Minister Atal Bihari Vajpayee visited China in 2003. Keeping up with the growth prospect, during his visit to India in 2010, Chinese Premier Wen Jiabao accompanied by then Indian Prime Minister Manmohan Singh, promised to work towards increasing the bilateral trade to $100 billion by 2015. However, in 2015, the trade between the two countries went into stagnation mainly because of the global economic crisis and the Indian government’s political and economic barriers to the flow of Chinese investments to India. Even at a later stage, Chinese President Xi Jinping while visiting India promised to invest $20 billion in India. Both India and China agreed that Chinese companies will set up a few industrial parks in Gujarat and Maharashtra. But, the industrial parks didn’t come up as promised. The Indian government rejected a lot of the proposals. Only a handful of Chinese private investments were green signalled by India citing various reasons.
TDB: What kind of opportunities can India explore to reduce its trade deficit with China?
LZ: The trade deficit is huge from India’s point of view. But, there is a huge potential for investment and exports in the agriculture, IT and pharmaceutical sector in China. The quality of the Indian agricultural products however is not up-to-themark in comparison to similar products from other Asian countries. So, India needs to improve the quality of the agricultural as well as pharmaceutical products to gain access to the Chinese market. In fact, both China and India can collaborate to remove these quality-related issues. In addition, the manufacturing sector in China is now moving towards valued-added product manufacturing. So, there is an opportunity emerging for India to attract labour-intensive manufacturing from China.
TDB: What kind of impact have Chinese initiatives like String of Pearls, CPEC and OBOR had on the bilateral trade?
LZ: China is very active in South Asia presently, but the activities are mainly economic in nature and these activities do not emanate from explicit geopolitical ambitions. China also carries out maritime activities in the Indian Ocean, but the main objective of those activities is to safeguard China’s own investments, imports and exports. China has built ports in Sri Lanka but these ports will not only benefit China but also help South Asian Countries, including India. At the Colombo Port, 80% of the goods handled are from India.