Bikky Khosla | 27 Mar, 2018
China
on Monday promised to
address the issue of its massive trade surplus with India. In the
11th meeting of India-China Joint Group on Economic Relations, Trade,
Science and Technology, Chinaâs visiting trade minister Zhong
Shan said
that an
effective
discussions with India on trade relations can serve as the propeller
for the growth not only between the two countries but in the entire
region. The
promise sounds too good to be true, but with
the ongoing trade
disputes
between the US and China worsening
day by day,
the
new dynamics
looks like a definite possibility.
Last
week saw some major developments what many experts see as the
beginnings of a trade war between the
US
and China. The
Trump administration, after a seven-month long
investigation
into Chinaâs tactics, imposed tariffs
on up to $60bn of Chinese products and
investment.
The
move came on the back of another
similar move
early this month
in the form of higher
tariffs on steel and aluminium
imports into the US.
In retaliation, China imposed tariffs on 128 American products, and
more recently threatened that China
was
not afraid of a trade war.
There
is little doubt that the escalating tension between the two biggies
is not
good news for India. First
of all, the development can impact global trade severely.
Additionally, it is very likely that the US may sooner or later
impose similar restrictions on India, considering $31
billion worth
trade deficit between the two countries in Indiaâs favour and the
Trump administrationsâ unhappiness over
import duties on American goods imposed by India.
In
the above scenario, the India-China
meeting
signals
newer dynamics in trade relation
between the two countries. During
the discussion, the Indian commerce minster raised some important
issues, including greater market access for Indian
agricultural products, IT &
IT Enabled Services (ITES) and high quality pharmaceutical products,
and cooperation in the sectors of tourism and healthcare needs. It
will be interesting to see how China will respond to this opportunity
to build a new international economic order.
I
invite
your opinions.
