Chinese President Visits India for Trade Talks

Image via Flickr by APEC 2013

Trade talks between China and India began on Sept. 17. The conversation will focus on relations between the two countries — specifically when it comes to individual travel and export transport.According to BBC, “China’s President Xi Jinping has begun his first official visit to India, with a focus on improving trade ties and resolving the decades-old dispute over border areas. China is one of India’s top trading partners and the Asian neighbors are the world’s most populous countries.”

Recent lack of Chinese investment in India also inspired the visit. India has proven to be a valuable trade partner for China; however, the country has yet to put forth any major funds toward the relationship. Chinese officials have taken interest in Indian factories as the country looks to outsource for low-cost manufacturing opportunities.

Reuters notes, “China is India’s largest trading partner, with two-way trade at about $66 billion last year. However, $51 billion of that came from Chinese exports. India hopes new investments from China will partly help offset its trade deficit. China plans to invest about $7 billion in two industrial parks in western India, media reported this month.”

By contrast, Japan has guaranteed $35 billion toward India’s trade and operations. Economists believe China’s latest visit is an attempt to reconcile its relationship with India and surpass the funds previously pledged by other foreign partners.

The Wall Street Journal reports, “While the trade relationship between the two countries has bloomed, foreign direct investment from China has not. According to Indian government statistics, the country has received a total of around $400 million from China in investment in the last 14 years. Even if you add the $1.2 billion of direct investment India received from Hong Kong, China is still well behind the $22 billion in foreign direct investment from the United Kingdom, $17 billion from Japan, $13 billion from the Netherlands and $1.9 billion from Spain.”

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