Arab News | 15 November 2010
China rules out FTA with India in near future
By Walid Mazi, Arab News, Jeddah, Saudi Arabia
Nov. 15—NEW DELHI — A free trade agreement (FTA) between India and China is not possible in the near future "due to pressure from certain quarters," said a top Chinese diplomat in India, adding that though both countries are interested in having one.
"China was very interested to have an FTA with India. We pushed hard. But your government was not ready, mainly I believe due to pressure from some other quarters," said Zhang Yan, the Chinese ambassador to India.
"Those people might be afraid of free trade with China," he told reporters on the sidelines of an event organized by the Federation of Andhra Pradesh Chambers of Commerce.
"We concluded that the time is not ripe for such an agreement. But both the countries have agreed that some day we can have it," said Yan. "Some regional agreement can be worked out to expand trade in a big way."
Highlighting the India-China diplomatic relations over the past six decades, Yan said both countries have become major economic partners.
"India and China have more common interests than differences. The two countries are partners in development. Of course, China-India relations, like any bilateral relations, do face challenges and problematic issues but our ties have become increasingly mature and substantive," he said.
The bilateral trade volume, which was only $2.9 billion in 2000, surged to $51.7 billion in 2008 and the two-way investment between both the countries increased by 10 times in the last three years, he said, adding that the bilateral trade between China and India is expected to hit $60 billion this year.
He emphasized the need for enhancing mutual trust between both the countries to move their relations forward and called for high-level interaction and cooperation.
"A strong and healthy economy of China and India not only brings tangible benefits to our two peoples but also serves as power engines to the world economy as a whole," Yan said.
He called for upgrading economic co-operation, expanding people-to-people exchanges, strengthen co-operation in multilateral forum and more importantly properly address each other’s concerns.
"There is a need to upgrade the level of economic co-operation by expanding the scope of trade, improving trade configurations and reducing trade imbalance," said Yan.
Commenting on yuan appreciation, the envoy said: "We will allow the currency to appreciate on the basis of the market, but not under outside force."
The statement assumes significance in the backdrop of the US demanding that yuan be up-valued to check the Asian giant from taking advantage in international trade. The issue was also discussed in details during the G20 Summit in Seoul, South Korea.
"China knows how to manage its economy in terms of currency valuations," said Yan. "We know how to do things including exchange rates. We will do it on the basis of market and in line with our economic development."