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India-China opportunities 2011-2016

December 8, 2010

Wen Jiabao’s visit to India next week, shrouded in diplomatic secrecy is seen to be extremely important to future sino-India relations. The landmark visit by the Chinese Prime Minister to Delhi is expected to lay the foundation of strong cultural and economic ties for the years to come.

Confident China is eager to prove her prowess and is keen to have India, as a key ally in the region. Eager to extand a friendly arm, promote India as a significant partner in its growth and development, the Chinese politibureau promoted its Ambassador to India Zhang Yan to the rank of Vice-Minister in the Chinese government.

Border disputes, visa issues and security tensions too are soon expected to be ironed out and India which is a mass market for Chinese goods is expected to be viewed very favorably in the dragon’s eyes. The earliest indication of this twist in foreign policy is the Chinese media which had until now shunned India as an under-developed neighbor and  is now celebrating the century old ties and growing trade between the two nations.

Changing public perceptions is the first step Beijing intends to take before it upps social and financial relations with its southern neighbor. The Communist party of China in its national draft recommendations for the next five years has stated that it is keen to work with Asian nations and make this the Asian century, with China at the helm. Although the draft National plan will only come into effect once it is passed by the CPC during their annual meeting in February 2011, China has highlighted four areas where India-China ties can be strengthened and fortified.

China plans to grow their domestic market and Indian companies will be amongst the few that will be invited to initiate and expand their collaboration with China. After years of concentrating on exports and foreign investments, Beijing has already begun giving incentives to domestic firms by bringing foreign firms on par with Chinese firms in tax. China’s domestic market has been growing annually by 14.4 percent, and is expected to skyrocket in the next few years. Spurred by nationalistic sentiments, domestic consumption is also expected to jump manifold reaching US$5 trillion by 2015. The nation also expects to become the premiere luxury goods market in the world, opening up a host of opportunities for collaborations with Indian firms.

Secondly, the Middle Kingdom is planning a readjustment of its Industrial structure, by optimizing all its sectors – agriculture, high-tech and manufacturing, modern services, finance, Medicare and logistics. According to China’s consul general in Mumbai, Niu Qingbao, Indian companies have potential to enter and successfully operate in the areas of modern services, medicare, and logistics.

Thirdly, Beijing is keen to promote the development of  a green economy. Unenthusiastic to follow the consumerist path of the west, where wastage is common, China is trying to create an economy that is proud to be frugal. China has laid out 3 trillion yuan, or 1.5 percent of the national GDP  towards the protection of the national environment and plans to learn from India which China believes has a tradition of living in harmony with nature.

Lastly, after years of cajoling each province to compete against each other, for maximum national gain, Beijing is eager to orchestrate the co-ordinated  development of its various provinces, as an integrated whole. While the western coast of China saw fervent growth during the boom decade of 1990-2000, a Go West strategy by the Chinese government is propelling growth  in East China now. Tax and infrastructure incentives, labour and land concessions, industrialization,  urbanization, preferential policies to business will further fuel massive growth and investments in East China, the integrated approach is now expected to narrow the gap between competing provinces and make china stronger as a consolidated whole.

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One Comment leave one →
  1. Preity Pinto permalink
    December 9, 2010 3:48 pm

    http://www.thehindu.com/news/national/article941278.ece – a follow up to your article on this being a landmark visit by Premiere Wen Jaibao

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