Move over Japan, China beckons Indians
By Indrajit Basu
KOLKATA - The Chinese presence in Indian markets is unmistakable - everything from cheap decorative lights to toys and numerous electric and electronic knick-knacks that come with unbelievable price tags and digestible quality.
But there is more to the Chinese tale than meets the casual eye. Though imports of Chinese goods outstrip Indian exports, according to the Confederation of Indian Industry (CII) - one of India's biggest industry lobbies - "China is fast turning out to be our biggest trade partner in East Asia". And the CII's claims will not appear tall when one looks at the growing bilateral trade between the two countries.
According to figures released by the CII, during January to August 2002, India-China bilateral trade increased by 37.5 percent over the same period in 2001. While Chinese exports to India increased by 40.8 percent, Indian exports to China rose by 33.7 percent. Going deeper into the numbers, Indian exports to China totaled $1.4 billion during January-August 2002, while imports from China totaled $1.6 billion.
The CII figures also reveal something startling: China, in fact, has overtaken Japan as a destination for Indian exports. During April 2001 to March 2002, China had already overtaken Japan as a source of imports into India, when imports from China (at $1.9 billion) beat imports from Japan (at $1.77 billion).
But the scorching growth of exports to China, that started from year 2002, has managed to replace Japan as India's biggest exporting destination in Asia. Moreover, the CII says that the numbers so far pertain to mainland China. Adding India's bilateral trade with Hong Kong - which stood at $2.6 billion during January to August 2002 - the three-way trade could well take over the slot of the second-largest trading partner of India, after the United States. India's exports to the US during the same period, which incidentally grew by about 18 percent vis-a-vis China's 33.7 percent, stood at $1.3 billion.
The CII is bullish on China; so much so that it believes China has the potential to overtake even the US as the top exporting destination. "India and China are the two fastest growing economies of the world. It is possible to increase Sino-Indian trade 40 percent," Gurpal Singh, director, CII said adding, "CII is now trying to enhance India-China bilateral trade to $10 billion by 2005 under a five-point agenda."
The agenda includes holding trade shows wherein China participates as the partner country. One such trade show, called the International Engineering and Technology Fair 2003, was held last week, which, according to Singh, saw a record participation by 80 Chinese companies from the electrical machinery, consumer products, to metal products industries.
Others on the agenda include a "Made in India Show" in Beijing in October 2003; along with this, another show called "India-China Hi-Tech" will be conducted in October in collaboration with China's Ministry of Foreign Trade and Economic Cooperation, which will focus on information and communication technology, biotechnology and pharmaceuticals; strengthening of the Indian office of the CII; and finally, the CII will start sending sectoral missions, for instance a mission on steel, to promote that industry in both countries.
The CII's China fascination does not quite end there. Discussing its role in the growth of cooperation between the two nations, Ashok Soota, president, said that other concurrent events would include an Indian fashion show, an Indian food festival and a popular music show.
But it is not just Indian industry that is focusing on the potential economic gains of increasing bilateral trade with China. The Indian government, too, is encouraging trade with China, hoping that such a step will translate into better political ties. And "learn from China," seems to be the new mantra adopted by India's minister for disinvestments, information technology and communications, Arun Shourie. "India has to learn four crucial lessons from China," said Shourie right after he took over the additional charge of India's commerce ministry early February.
First, to formulate policies that focus on higher growth. "Second, we need to learn how to implement the policies with impeccable execution; thirdly, we must learn to pay due importance to the scale of operations; and the fourth is to learn how to attract greater foreign investment by facilitating the relocation of industries from around the world in India", he said.
Fortunately for India, the feeling is mutual from the Chinese side. "India is a very important market for us and we have outlined major expansion plans here," said Linda Xia, brand manager, of a large Chinese company, Midea.
And, according to China's ambassador to India, Hua Junduo, the participation of 80 companies in the CII show was the country's largest business delegation sent to any single country, which, "reflects China's interests in building mutually beneficial relations between the two countries".
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