Wen Jiabao for trade pact with India; ready to address trade issues

Rejecting the 'dragon-elephant' cliche that has come to define competition between his country and India, Chinese Premier Wen Jiabao today proposed a trade-opening pact between the two nations — the fastest growing economies and home to two-fifths of the world's population.

Appreciating India's concerns on trade imbalance (US$ 19 billion in favour of China), Wen said that Beijing takes the problem "seriously and stands ready to take further measures" to address it.

Accompanied by an over 300-strong business delegation which cheered him at the first major engagement during his three-day visit here, he asked India that restrictions on investments and movement of people be removed.

"It is necessary to ease restrictions concerning the reveal and approval procedure, capital flow and entry and exit of people, thus creating more favourable conditions for mutual investment," he said.

Describing his visit here as a "journey of friendship", the Chinese premier echoed Prime Minister Manmohan Singh's recent statement that there is enough space for the two Asian nations to develop and prosper.

"China and India are partners for cooperation and not rivals in competition. There is enough space in the world for the development of both China and India and there are enough areas for us to cooperate," he said.

Singh had made a similar statement ahead of his meeting with Wen during the Asean Summit in Hanoi in October.

Wen said the comparison of development in the two countries as 'dragon' for China and 'elephant' for India was not correct.

"I don't agree with such a view and I don't think business representative present today agree either. China and India are partners for cooperation and not rivals," he said.

Encouraged by a booming bilateral trade, which is set to cross US$ 60 billion this calendar year, the premier said he would discuss with Singh his proposal to enter into a market opening trade agreement.

According to commerce and industry minister Anand Sharma, Chinese companies' business engagements in India is to the tune of US$ 50 billion.

During Wen's visit, Indian and Chinese companies are signing US$ 16 billion worth investment and trade deals, on the heels of multi-billion dollar deals w ith US and French companies.

"The (investment and trade promotion) mission is scheduled to sign economic and trade agreement worth more than US$ 16 billion with Indian companies," Wen said. He would encourage the business communities to set up CEO's forum.

China is the world's fastest growing economy followed by India, which is expanding in the range of 9%. 

Agreements, which are being signed during Wen's visit include those between China Development Bank and Reliance Power, China Aluminium International Trading Co and Vedanta Aluminium Ltd, Bank of China and IDBI, Dongfang Electric Corporation Ltd and Abhijeet Projects Ltd. 

Chinese companies are already involved in project contracts of nearly US$ 40 billion in the power sector, and another US$ 10 billion in telecom.

Wen said India is strong in services sector, such as software and health care, while China is known for its manufacturing capabilities.

He further said China and India are endowed with tourism resources yet the number of tourists visiting each other countries is rather small.

"China would like to actively introduce India's tourism resources to Chinese people and encourage them to visit India," he said. He also said there should be more direct flights between the two countries.

In his speech, commerce and industry minister Anand Sharma said Indian industry would like to diversify export basket which will provide opportunities of expanding non-traditional exports.

"These efforts matched by greater market access for Indian goods in China where we have competitive advantage will help in strengthening our bilateral economic relations," he said.