The fourth China-India strategic economic dialogue is an effort to increase trade between two of the biggest economies in the world. Bilateral trade between China and India reached $70 billion last year, but the trade imbalance remains an issue to be resolved. The two countries are also hoping to increase their cooperation in the infrastructure sector.
The Sino-India strategic economic dialogue is taking place after a gap of 2 years and much has changed in the last two years in China and India.
As China’s growth moderated to 6.5 percent, India became the fastest growing economy in the world.
“During the fourth China-India strategic economic dialogue there are 5 different official committees under which the officials will be working. These include infrastructure, energy, environment, clean and renewable energy and increasing technological cooperation between both the nations. For India infrastructure remains the most important and it is hoping that in the next few years various infrastructure projects in India will get more investment from China,” Shweta Bajaj said.
A positive investment climate also took over. Official figures of Foreign Direct Investment from China to India till March 2016 stands at only $1.4 billion but there have been announcements of many investments.
During the talks the emphasis has been on increasing investment in India’s infrastructure, especially the railways sector.
Chairman of China’s National Development and Reform Commission, Xu Shaoshi, said, “China and India have a long tradition of friendship and shared interests and challenges. We are at a similar stage of development where we have to achieve the goal of sustainable and inclusive development for our people. Therefore we need to strengthen our cooperation and identify complementary and comprehensive multi-level business partnerships.”
One of the issues remains balance of trade, which is skewed in favor of China and stands at $53 billion. In order to reduce the trade deficit, India wants China to set up factories in India. India is also looking for Chinese investment in various sector under India’s flagship Make in India Scheme.
CEO of Niti Aayog, Amitabh Kant, said, “For a long time we have been importing goods from China, many times goods that are Made in India but the time has come for us to pursue a strategy where it should be invested by China but made in India. So we welcome Chinese companies to focus on both manufacturing and infrastructure in India.”
The challenges to bilateral trade between China and India remain. To ease them out China and India want to increase people to people contact, have regular business interactions and have an increase in government facilitation to have an environment conducive for private sector investments.