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The India-China Joint Economic Group is meeting after 6
years and China has brought a delegation of 40
officials and 42 business representatives. To boost
investment flow, the two countries signed a draft
agreement on investment protection and promotion. Xilai said that this agreement should spur Indian
investments into China, which is less than 1% of
foreign direct investment into China. He exhorted
Indian business to study the Chinese domestic markets
and bring in luxury and consumer goods. China says
that its national savings is currently at USD 1.7
trillion and expects it to cross USD 4 trillion.
To remove trade and investment hurdles, the two nations
have decided to set up 6 task forces to study product
homologation, non-tariff trade barriers, rules of
origins of production and raw materials, and calibrate
response to WTO negotiations. They will also set up a
CEO’s Forum in 3 months to identify potential areas
of investment and trade promotion.
China accuses India of creating obstacles to trade by
slapping anti-dumping duties on Chinese goods and not
granting “market economy” status. They say that
India’s “frequent investigations” such as
anti-dumping, safeguard measures, and special
safeguard measures are major irritants in Indo-Sino
trade and economic co-operation. They also complain of
visa hurdles for Chinese companies. Recently, Indian
investigative agencies advised Indian armed forces and
Government companies against buying Chinese networking
equipment saying that they are a major security risk
to the nation. Moreover, Chinese defense policies and
interactions with Pakistan is not helping matters any.
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