Source: Global Times Published: 2021-07-13
China's trade with India in the first half of this year showed an upward trajectory but edged down 7 percentage points from the January-May period, probably due to the easing COVID-19 situation in India and a decline in iron core trade, experts said.
China's foreign trade with India grew 62.7 percent from January to June in dollar terms compared with the same period last year, making China-India trade growth the second highest among China's trade with other trading partners, after China-South Africa, continuing a growing momentum seen in the first five months, according to data from the General Administration of Customs (GAC) on Tuesday.
China's exports and imports to India reached $57.48 billion in the first six months of the year, with imports increasing 69.6 percent year-on-year and exports growing 60.4 percent year-on-year.
The increase in bilateral trade is largely spurred to an extent by India importing medical goods from China to combat the second wave of the pandemic, Zhao Gancheng, a research fellow at the Shanghai Institute for International Studies told the Global Times on Tuesday.
According to the data released by the Ministry of Foreign Affairs, China exported more than 26,000 ventilators and oxygen generators, more than 15,000 monitors, and nearly 3,800 tons of medical materials and drugs to India in April.
The growth of two-way trade between China and India, however, edged down slightly from that in the January-May period which saw the bilateral trade growth hit 70.1 percent in US dollar term to $48.16 billion, with Chinese exports to India up 64.1 percent and imports up 90.2 percent on yearly basis.
The decline in the growth rate is probably due to an easing pandemic situation in India and a drop in iron ore trade between the two countries, Liu Zongyi, secretary-general of the Research Center for China-South Asia Cooperation at Shanghai Institutes for International Studies told the Global Times on Tuesday.
From January to April this year, China imported a total of 20.28 million tons of iron ore from India, an increase of nearly 66 percent from the same period of last year, accounting for nearly 90 percent of India's total iron ore export, according to market data.
"The growth of China's iron ore imports from India in the January-April periods triggered worries from steel manufacturers in India on the shortage of domestic iron ore, who have called for a reduction in exports to China," Liu said, "On the other hand, it may also be due to a reduction in China's imports due to sufficient domestic supply."
In the first six months of this year, China imported goods worth $14.7 billion from India and exported that $42.6 billion to India.
If this momentum can be maintained in the second half of the year, China is expected to maintain the position as India's largest trading partner, Zhao predicted.
However, it should be noted that this wave of growth may lead to further expansion of India's trade deficit with China and promote the county to take measures to suppress Chinese products from entering the Indian market as it did in the past years after seeing a widening trade deficit with China, Zhao said.
"If India does not offend China, and does not provoke geopolitical conflicts, there is still a vast space for cooperation," Zhao said.
Bilateral trade in 2020 declined 5.6 percent to $87.6 billion, the lowest since 2017, data from Chinese customs showed. But even amid such a complicated environment, China still overtook the US to become India's largest trading partner in 2020.
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