Free trade talks, key pacts to be focus of Manmohan Singh's visit to China

By Ashok Dixit

New Delhi, Jan.12 : The Prime Minister, Dr. Manmohan Singh, and his Chinese counterpart, Wen Jiabao, are expected to call for formal negotiations on a regional trading arrangement during Dr. Singh's three-day official visit to Beijing starting from Sunday morning.

This next step forward, according to official sources, will be based on the recommendation made by a joint task force that was appointed by both countries to study the feasibility and benefits accruing from such a regional arrangement.

Dr. Singh, who will leave for Beijing late on Saturday night, accompanied by a 25-plus member business delegation, comprising big guns of India Incorporated from a range of sectors, including manufacturing and IT, will be the first Congress Prime Minister to visit China since September 1993 (P.V. Narasimha Rao was the last one). Atal Behari Vajpayee undertook the last visit by an Indian Prime Minister to China in June 2003.

While the bilaterally sensitive boundary question is likely to be addressed and progress relating to negotiations concerning it will be assessed during this key visit, the stress is expected to be on promoting commerce.

Official sources, experts and the media in both countries are of the view that Dr. Singh will underline the significance of financial capitals Mumbai and Shanghai, as much as on seats of political power New Delhi and Beijing, in determining the future contours of Sino-Indian ties.etween January and December 2007, two-way Sino-Indian trade was worth an estimated 37 billion dollars, representing an almost 51 per cent increase over the same period in the previous year. In 2006, it crossed 25 billion dollars, a rise of 33.8 per cent over 2005 (18.7 billion dollars).

In 1992, the value of Sino-Indian trade was pegged at 338 million dollars, and during Prime Minister Vajpayee's visit in June 2003; it was valued at five billion dollars. In less than five years since, about 100 Indian companies have established a presence in China. Indian banks, industry associations, consultancies and even a law firm have also set up shop to facilitate burgeoning business ties.

The massive growth in bilateral trade is currently the toast of the globe, and according to Wang Jinzhen, the Secretary-General of the China Council for the Promotion of International Trade (CCPIT), the negotiation and finalization of a Regional Trade Agreement (RTA) could help to reduce India's trade deficit.

In a recent interaction with an Indian daily, Jinzhen said: "Unless Indians make a much more concerted effort to sell in the Chinese market, the Chinese surplus will continue."n 2006, India's trade deficit vis- -vis China was 4.12 billion dollars, and as of November 2007, it has risen to over nine billion dollars.

Prime Minister Singh will on January 14 (Monday) address some 400 members of China's business and government community at a summit organized by the China Council for the Promotion of International Trade (CCPIT)

Dr. Singh is likely to emphasize on the need for developing a multi-faceted bilateral engagement, and urge the two governments to consider shifting away from a uni-dimensional focus on the boundary dispute, an issue that has so far resulted in eleven meetings in China and India between Special Representatives (Brajesh Mishra, J.N. Dixit, M.K. Narayanan and Dai Binguo) since 2003.

The border dispute has not stood in the way of the two countries developing their relations in all areas of mutual interest and benefit.

During the visit, India and China will sign five Memoranda of Understanding and institutional mechanisms for cooperation in railways, housing, geo-sciences, land resource management and traditional medicine.

The joint task force set up by India and China is unlikely to recommend immediate activation of the RTA because of Indian business community concerns and inherent insecurities about the competitive qualities of Indian industry to counter China's manufacturing might. The lack of transparency in the Chinese pricing and accounting systems has also prompted India to hold off on granting China Market Economy Status (MES), the first step required for a possible RTA.

There are fewer than 50 Chinese business offices in India, and foreign direct investment inflows from China to India between August 1991 and December 2006, was a mere 3.61 million dollars. The Chinese view the lack of information about investment and market conditions in India, coupled with the country's stringent labour laws and poor infrastructure, as factors that don't encourage Chinese investors.ino-Indian political and economic ties are, in fact, still in a take-off phase, and Prime

Minister Singh is expected to use his meetings with Prime Minister Wen Jiabao, President Hu Jintao and the Chairman of the Standing Committee of the National People's Congress of China, Wu Bangguo to identify and develop mechanisms to promote and further enhance cross-border linkages.

ANI