AMN / WEB DESK
China on Tuesday said it is ready to take measures to advance normal trade with India amid reports that U.S. has replaced China as India’s biggest trading partner for the financial year 2021-22 and India’s trade deficit enlarged further with China due to COVID-19 pandemic, border stand-off and China’s “non-tariff trade barriers” on Indian products among other reasons.
Chinese foreign ministry spokesperson Zhao Lijian at a media briefing in Beijing insisted that China remains India’s largest trading partner in the calendar year 2021 with bilateral trade volume of over USD 125 billion according to Chinese statistical measures.
However, he did not respond to the issues of “non-tariff trade barriers” and the ensuing trade deficit and other constraints being mentioned by Indian businesses and said the details should be obtained from the Chinese Commerce Ministry which has not replied to the query so far.
India has been long insisting that China should open its markets for India’s IT and Pharmaceutical sectors, the country’s main strengths of exports but Beijing has not budged so far in any substantive way.
Affected parties said that China has made some undue requirements related to Covid-19 pandemic on cold chain products from India and has added some new requirements for Indian spices export among others.
Zhao said the disparity in trade figures published by China and India is a result of different statistical measurement scales. China follows the financial year from January to December, while India calculates the same from April to March every year.
He further said China does not object to the development of normal trade relations between India and the US and is not that interested in the changes of the ranking in trade volume.
On a question whether border standoff in Ladakh standoff which cast a shadow on the bilateral ties for over two years is also impacting the trade ties between the two countries, he said, “At present, the border situation is stable in general. The two sides have been maintaining close communication through diplomatic and military channels.”
He Weiwen, former Chinese diplomat and now a senior fellow at Centre for China and Globalisation (CCG) – an influential Chinese thinktank with links to China’s state council told Prasar Bharati Beijing that border issue, of course, has a negative effect on China-India trade, but only limited, adding that the border issue cannot explain why Chinese exports to India have kept rising fast.
Both governments have been working to bring it under control. He said that the pandemic situation has had negative effects on Chinese economy and trade and there was a general import slowdown in China.
He added that a sharp downturn happened in Q1,2022 when Chinese imports from India fell by 26.1% y-o-y, two-digit sharp fall, which he said is a special case that both countries should attach great attention and try to bring back to the track of growth.
However, he expressed his unawareness about the Chinese restrictions on Indian products which has also affected India’s exports to China adding that the trade measures should abide by WTO rules.
He mentioned in his reply that “Our two governments should work together to find effective ways to check the fall of Indian exports to China.”
On Tuesday, senior diplomats of the two countries exchanged views on the current situation along the Line of Actual Control (LAC) in the Western Sector in eastern Ladakh.
The two sides also agreed to hold the next (16th) round of the Senior Commanders meeting at an early date to achieve the objective of complete disengagement from all friction points along the LAC in the Western Sector in accordance with the existing bilateral agreements and protocols.
According to the data of the India’s Ministry of Commerce, in FY 2021-22, the bilateral trade between the US and India stood at USD 119.42 billion as against USD 80.51 billion in 2020-21.
During 2021-22, India’s bilateral trade with China aggregated at USD 115.42 billion as compared to USD 86.4 billion in 2020-21, the data showed.
India’s trade deficit with China rose to USD 72.91 billion in 2021-22 from USD 44 billion in the previous fiscal year as per Indian figures whereas the US is one of the few countries with which India had a trade surplus amounting to USD 32.8 billion last year.
In FY 21-22, Indian imports from China rose 44.4 percent to US$94.2 billion, but its China-bound shipments grew only 0.3 percent to US$21.3 billion.
Chinese experts are keenly following recent developments including the US emerging as top trading partner of India at a time when India is improving its relations with Quad, (US, India, Japan, Australia) and joined Indo-Pacific Economic Framework (IPEF) which has been joined by 14 countries so far including Fiji – a country from pacific islands region where both the US and China are trying to court the regional countries.
IPEF member countries include more than third of global GDP at present. China has remained a dominant trade partner of India for a long despite the widespread concerns over the ballooning trade deficit every year, but the recent developments are perceived as a trend of increasing bilateral trade with the US ringing alarm in China.
A Hong Kong based newspaper reported that experts have urged China to deepen its ties with ASEAN as US becomes India’s biggest trading partner and acting fast with the new IPEF to strengthen its ties in the region.