NEW DELHI, (Reuters) – Chinese Premier Wen Jiabao began a visit to India yesterday, pledging to improve market access for Indian companies and insisting the world was big enough for both Asian giants to prosper as partners.
Wen said he was looking forward to an early launch of negotiations for a free trade agreement between the world’s two fastest-growing major economies, despite Indian worries that it might be a dumping ground for cheap manufactured goods from China.
“China and India are partners for co-operation, not rivals in competition. There is enough space in the world for the development of both China and India,” Wen told business leaders at the India-China Business Cooperation Summit in New Delhi.
“China takes seriously the trade imbalance between our two countries,” Wen said, adding that he would discuss with his Indian counterpart Manmohan Singh ways to substantially increase trade volumes and may open up the Chinese economy to Indian IT, pharmaceutical and agricultural companies.
“The fast economic growth between China and India has been an important engine for the world economy.”
In remarks seen as an effort to play down tensions between the two rivals, who still distrust each other, Wen said Chinese companies would sign deals with Indian firms worth more than $16 billion ranging from power equipment to telecoms gear.
Wen’s visit is the first by a Chinese premier in five years and he brings with him more than 300 business executives. The two countries, home to more than a third of the world’s population, fought a war in 1962 and relations remain uneasy despite their booming trade relationship and rising global clout.
Both have stood together to resist Western demands in world trade and climate change talks, but they have also clashed over China’s close relationship with Pakistan, fears of Chinese spying and a longstanding border dispute.
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 asked India to ease restrictions on investments, capital flows and the movement of people, a thorny subject.
India’s deficit with China could reach $24-25 billion this year, analysts said. The deficit rose to $16 billion in 2007-08, from $1 billion in 2001-02, according to Indian customs data.