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China, India seal deals worth $16bn

Jiabao says world is enough for both India, China
NEW DELHI: Prime Minister Wen Jiabao said China will seek to boost commerce with India while reducing his country’s $18 billion surplus this year in trade between the world’s two fastest-growing major economies.
Arriving in New Delhi with what he said was a delegation of more than 300 Chinese company executives, Wen spoke to a business conference at the start of a three-day visit meant to solidify the countries’ economic links while managing disputes over their border and China’s support for Pakistan.
He dismissed the idea of Chinese-Indian relations as “rivalry between the dragon and the elephant,” saying “there is enough space in the world for the development of both.”
Wen said his government “takes seriously the trade imbalance between our two countries and stands ready to take further steps to facilitate the access of Indian products,” to the Chinese market. His delegation will sign more than $16 billion in deals during the visit with Indian companies including ICICI Bank Ltd and Reliance Power Ltd.
The Chinese leader said he and Indian Prime Minister Manmohan Singh expect to announce an increased target for bilateral commerce, which at $60 billion this year represents 2 percent of China’s projected total of $2.8 trillion.
While India and China “have received more foreign direct investment than any other country,” investment between them “falls short of $700 million,” Wen said. He called for easier procedures for moving capital and people between the two countries to create “more favorable conditions for mutual investment.”
Wen announced more Chinese investments in India to assuage the worries of Indian politicians, peeved that the Sino-Indian trade balance is heavily in China’s favour.
Wen also said he would discuss with his Indian counterpart Manmohan Singh ways to substantially increase trade volumes.
“Economic ties constitute literally the bedrock of our relations … Both sides are keen to further enhance mutually beneficial trade and are looking at new initiatives,” said an Indian foreign ministry spokesman on Monday.
Still, total investment by China in India is small, amounting to only $221 million in 2009, representing only about 0.1 percent of China’s total outward foreign direct investment stock in that year. That figure is seven times less than what China has invested in Pakistan, according to data from China’s Ministry of Commerce. Hundreds of demonstrators wearing orange T-shirts with slogans such as “Free Tibet Now” took to the streets of central Delhi, shouting “Wen Jiabao go back!” and “Tibet’s independence is India’s security.” Although both India and China have said they are exploring a possible free-trade agreement, no real progress is expected on that front as there is some scepticism in New Delhi that Beijing may only want to dump cheap manufactured goods on India’s booming $1.3 trillion economy. While the two are often lumped together as emerging world powers, China’s GDP is four times bigger than India’s and its infrastructure outshines India’s dilapidated roads and ports, a factor that makes New Delhi wary of Beijing’s growing might. “Relations are very fragile, very easy to be damaged and very difficult to repair. Therefore they need special care in the information age,” China’s envoy to India, Zhang Yan, told reporters in New Delhi. After Wen’s December 15-17 visit he travels straight to Pakistan, India’s nuclear armed rival, for another two nights. In the days leading up to Wen’s trip, China and India have agreed on a series of business deals. -Reuters


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