TheBoaoForumforAsia(BFA)AnnualConference2018washeldfromApril8to11,whereintheeconomicprospectsofIndiaaswellascooperationandexchangebetweenChinaandIndiawereimportanttopicsofdiscussion.
BilateralEconomicandTradeCooperationontheRise
InMarch,aninternationaltradepromotiongroupoftheMinistryofCommerceofChina,includingmorethan30representativesfromChineseenterprisescoveringindustriessuchastextiles,pharmaceuticals,agriculture,petrochemicals,tradeandcommerce,visitedIndia.Thetwosidessigned101tradedealsworthUS$2.37billioninNewDelhi,anamountequalto14.5percentofChina’stotalimportsfromIndiain2017.Atthesametime,the11thmeetingofChinaIndiaJointGrouponEconomicRelations,Trade,ScienceandTechnologywasalsoheldinNewDelhi.ChineseCommerceMinisterZhongShanandIndianCommerceandIndustryMinisterSureshPrabhubothexpressedwillingnesstodeepenpracticalcooperation,whichistremendouslysignificantconsideringtheglobalshadowofdepression.
Inrecentyears,relationsbetweenChinaandIndiahaveexperiencedupsanddowns.TheDongLang(Doklam)standofflastyearbroughtrelationsbetweenthetwocountriestothelowestlevelinnearly20years.DespiteIndialaunchinganti-dumpinginvestigationsonChinaandamovementto“boycottChineseproducts,”bilateraltradebetweenChinaandIndiareachedanewhighof84.4billionU.S.dollarsin2017,risingby20.3percentfromthepreviousyear.WhileChinacontinuestobeIndia’slargesttradepartner,itsimportsfromIndiahaveincreasedbynearly40percent,whichtosomeextentalleviatedthetradeimbalancebetweenthetwocountries.InvestmentcooperationbetweenChinaandIndiahasbeenincreasing.ChineseenterpriseshaveinvestedmorethanUS$8billioninIndia,andIndianinvestmentinChinagrewby18.5percentannuallyoverthepastthreeyears.
MutualBenefitsandCommonGrowth
Closertiesinbilateraltradeandinvestmentarenotonlyreflectedinmacrostatistics,butalsointhelongtermeconomicdevelopmentplansofIndiaandthedailylivesofhundredsofmillionsofIndians.SinceNarendraModibecameIndia’sprimeministerin2014,theIndiangovernmenthaslaunchedanumberofmajorinitiatives,suchas“MakeinIndia,”“DigitalIndia,”“SkillIndia”and“Start-upIndia.”Atthesametime,Indiahascontinuouslyreducedforeigninvestmentthresholds,improvedthebusinessenvironment,absorbedmorecapitaltopromoteindustrialupgrading,andcreatedmorejobs.ChineseenterprisesgrasptheopportunitiesintheIndianmarketandcontinuetoexpandinvestmentintraditionalmanufacturingsectorssuchasautomobile,machinery,andelectricalequipmentandhi-techfieldssuchastheinternet.Inrecentyears,Alibaba,TencentandotherChineseinternetgiantshaveconstantlyexploredtheIndianmarket,andprovidedChina’sdevelopmentexperienceandhugecapitalinputforlocalIndianstartups,promoting“Start-upIndia”astheyexpandedtheirsharesoftheIndianmarketandstimulatingIndia’sentrepreneurialenthusiasmandinnovativepotential.India’slargestonlinepaymentplatformPaytmthatbecamepopularafterModi’sdemonetizationcampaign,aswellase-commerceplatformFlipkart,UCBrowserandotherfamousIndianinternetbrands,arebackedbyChineseinternetcompanies.Manystart-upprojectshavebeenlaunchedthankstothesupportofChinesecapital.Thisassistancehasincreasedthepotentialfore-commerceinIndiawhileimprovingthelivesofhundredsofmillionsofIndianinternetusers.
Asforhardware,Chinesemobilephonemanufacturers,representedbyXiaomi,haveinvestedinfactoriesinIndiatoparticipatein“MakeinIndia,”creatingjobsforlocalpeoplewhileproducinghigh-qualityproducts.In2017,ChinesebrandsaccountedforhalfoftheIndiansmartphonemarketandfourofthetopfivebrandsintermsofshipments.AdvertisementsforChinesemobilephonebrandscanbeseenalloverthestreetsofIndia.VivoandOppoarethetitlesponsorsoftheIndianPremiereLeague(IPL)andIndia’snationalcricketteam,respectively.
Underadversefactorsofbilateralpoliticalrelations,therisingSinoIndianeconomicandtradeexchangeisshowingtheworldthattheinterdependencyineconomicgrowthandsocialdevelopmentbetweenthetwocountriesisunstoppable.ThevastmarketcreatedbythehugepopulationofIndiaandthecountry’sstrongeconomicgrowthpotentialhavemadeIndiaoneofthebestinvestmentdestinationsforChineseenterprises,andatthesametimethetwocountries’vastterritories,largepopulationsandsimilardevelopmentbackgroundsgivethemmanycommongroundsinexploringthepathsfordevelopmentandsocialgovernance.Asthetwolargestdevelopingcountriesintheworld,achievingeconomicgrowthisacommongoalofChinaandIndiaastheystrivetoimprovethelivingstandardsofthepeopleandeliminatepoverty.Inhisreporttothe19thNationalCongressoftheCommunistPartyofChina(CPC),ChinesePresidentXiJinping,alsogeneralsecretaryoftheCPCCentralCommittee,proposedbuildingChinaintoagreatmodernsocialistcountrythatisprosperous,strong,democratic,culturallyadvanced,harmoniousandbeautifulbythemiddleofthecentury.TheModiadministrationalsoproposedbuildinga“greatIndia”by2047.BothsideshavepledgedtorationallycontroldifferencesduringtheircommonriseandtodocktheChineseDreamwiththeIndiandreamthroughsustainabledevelopmentandmutualbenefits.
June20,2017:KavinBhartiMittal,CEOofHikeMessenger,speaksduringanewsconferenceinNewDelhi,India.ThestartupwasvaluedatUS$1.4billionlastyearaftersecuringUS$175millionfrominvestorsincludingTencentHoldingsLtd.andFoxconnTechnologyGroup.VCGHandinHandtoFaceTradeProtectionism
TherolesofChinaandIndiainmaintainingtheworldtradeorderandpromotingglobalizationhavebecomeincreasinglyprominentinthecontextofthegreaterprotectionismchallengesemergingintheworldtradeorderandtheprocessofglobalization.
Asbeneficiariesofeconomicglobalization,therapideconomicgrowthofChinaandIndiareliesonarationalglobaltradeorder.However,ChinaandIndiafacemanychallengeseconomicallyduetothegradualintroductionofU.S.PresidentDonaldTrump’sprotectionisttradepolicy.IndiaandChinaarelistedamongthetencountrieswithwhichtheUnitedStateshasthehighesttradedeficits.TrumphasrepeatedlythreatenedtooverhaulH-1Bvisassinceheranforpresident,causingseriousconcerninIndia’sIToutsourcingindustry.ThemeasurewillaffecttensofthousandsofIndianITemployeeswhoworkintheUnitedStatesandmakeahugeimpactonIndianITserviceexport.ThehightariffsimposedbytheUnitedStatesontheimportofironandsteelproductsareestimatedtodisruptglobalsteelpricesandaffectrelatedIndianindustries.AmericantradeprotectionismisboundtoimpactIndia’seconomicgrowthandindustrialdevelopmentasthecountryurgentlyneedstoboostthescaleandlevelsofitsmanufacturingindustry,relieveunemploymentpressuresandtapintothepotentialofitsdemographicdividend.
AsvictimsofAmerica’stradepolicy,ChinaandIndiacancounternotonlybyexpandingbilateraltradethroughdeepeningeconomicexchange,butalsobycarryingoutbroadercooperationinthemaintenanceandformulationofglobaltraderules.InhisspeechattheWorldEconomicForum(WEF)inDavosin2017,PresidentXiJinpingcalledfor“developingglobalfreetradeandinvestment,promotingtradeandinvestmentliberalizationandfacilitationthroughopeningupandsayingnotoprotectionism.”AttheclosingceremonyoftheWEFannualmeetinginDavosinJanuarythisyear,PrimeMinisterModialsoexpressedIndia’ssupportforglobalfreetradeandlistedtradeprotectionism,climatechangeandterrorismasthethreemajorchallengesthattheworldfacestoday.Asthetwofastest-growingmajoreconomiesintheworld,ChinaandIndiashouldplayaleadingroleinmaintainingtheworldtradeorderandpromotingglobalization,injectgreatenergyintotheirowneconomicdevelopment,andfosterstableandpeacefulglobalgovernance.
TheauthorisanassistantresearcherattheInstituteofSouthandSoutheastAsianandOceanianStudiesundertheChinaInstitutesofContemporaryInternationalRelations.