India-China Economic and Trade Relations
India-China economic and trade relations before 1949
The economic and trade relations between China and India started very early in history. During the period of Emperor Wu of the Han Dynasty, Zhang Qian passed through the Western Regions and found in central Asia the bamboo battles and cloths produced in Sichuan, China. According to locals, these special products of Shu land were introduced into Central Asia via India. It can be seen that there was already a relatively close economic and trade relationship between Southwest China and India at that time. During the Tang and Song Dynasties, pearls, ivory, silk cloth, and various spices produced in India were shipped to China in large quantities and were loved by the Chinese people. Chinese commodities such as porcelain and silk flow to India and are also widely welcomed. Of course, India’s geographic location is in the middle of the Silk Road, and a considerable portion of the Chinese goods purchased are resold to the farther west.
During the Yuan and Ming Dynasties, Chinese merchant ships and merchants entered the Indian Ocean in large numbers, and Zheng He sailed to the Western Ocean many times to reach India. At that time, Caligut on the west coast of India was an important hub for economic and trade exchanges between East and West.
After Britain ruled India, it vigorously promoted trade with China. During the period from the second half of the 18th century to the eve of the Opium War in 1840, the total Sino-British trade, including India, increased more than tenfold, from 1,449,872 silver in 1760-1764 to 1728.5308 in 1830-83 Wan Yinliang. British imports of goods from China come from the UK and India. According to relevant statistics, from 1775-1779 to 1830-1833, goods from the UK accounted for 40% of the total value of goods exported to China. % And goods from India account for 60% to 70% of the total value of goods exported to China.
After the decline of the opium trade at the end of the 19th century, India mainly exported cotton, grain (wheat), and jute to China. It was not until the outbreak of the First World War that Japan replaced China as the most important importer of Indian cotton. Cotton exports to China gradually declined and were replaced by Indian cotton yarn.
After World War I and World War II, Sino-Indian trade did not develop significantly. During World War II, normal trade was difficult to develop, and the economic exchanges between China and India were mainly manifested in the fact that aid materials from the United States and Britain, and other countries were sent to China via India. After the war, China and India resumed a small amount of cotton yarn trade.
(2) Sino-Indian economic and trade relations
In 1950, China and India established diplomatic relations. During this period, the economies of China and India were relatively backward, and there was little mutual economic demand. In the 13 years from 1950 to 1962, the bilateral trade volume totaled the only US $ 26038 million. Due to the outbreak of the Sino-Indian border conflict, Sino-Indian trade almost stopped in the following 15 years and began to develop gradually until the 1990s. The trade volume between China and India was only 170 million US dollars in 1990 and reached 1.163 billion US dollars in the mid-1990s.
After the restoration of normal relations between China and India in the 1990s, China-India bilateral economic and trade cooperation continued to develop steadily. According to statistics from the Chinese Customs, bilateral trade has grown rapidly from US $ 2.9 billion in 2000 to US $ 71.654 billion in 2015. Under the adverse impact of the slowdown in global economic growth, it has continued to grow, with a cumulative increase of 25 times in 15 years, with an average annual increase Up to 24%.
According to Chinese customs statistics, in 2015, the bilateral trade volume between China and India was US $ 71.62 billion, an increase of 1.5% year-on-year, of which China’s exports were US $ 58.24 billion, an increase of 7.4%, and China’s imports were the US $ 13.38 billion, down 18.2%. At present, China is India's largest trading partner, and India is China's largest trading partner in South Asia.
(3) China-India financial dialogue. Established during Prime Minister Wen Jiabao’s visit to India in 2005, he led the Ministry of Finance of both sides in order to promote policy exchanges and substantive cooperation in the financial and financial fields of the two sides. So far, 8 dialogues have been held. The most recent dialogue was held in August 2016 in Beijing, China.
Since the Modi government came into power, it has focused on improving government governance, simplifying government and decentralization, being keen on reforms, focusing on attracting foreign investment, and vigorously developing an export-oriented economy. Prime Minister Modi has also designated special officials to coordinate Chinese companies' investment in India. According to the enterprises, the efficiency of the Indian government has improved, the infrastructure has been continuously improved, the attitude towards cooperation with China has tended to be positive and pragmatic, and the investment areas of enterprises in India have gradually expanded. However, due to the political system, the unique religious culture, and the lack of experience of my company's "going out", there are still a lot of problems that I need to solve in my investment in India.
First, the business environment is still not perfect. According to the World Bank’s new 2015 Business Environment Report, India ranks 130 out of 185 economies worldwide, which is basically the same as in previous years. In 2016, it further ranked 100, an increase of 30. Although the Indian government has repeatedly promoted policies such as "Easy doing business" to improve the business environment, the actual effect is limited. The land acquisition is slow, the work visa application is difficult, the renewal is cumbersome, and the environmental assessment procedures are complicated.
Second, the company's ability to operate internationally needs to be improved. Our company's investment abroad pays attention to efficiency, it is easy to seek progress quickly, and there is little research on laws and policies. In addition, our company is accustomed to domestic business methods and does not pay enough attention to localization work such as labor and culture, and labor disputes should occur, leading to increased investment risks. Some companies report that labor-management within the company is more difficult, absenteeism often occurs, and they are more sensitive to salary and other issues.
(3) Economic and trade agreement signed with China
In 1984, China and India signed the first intergovernmental trade agreement.
In 1994, China and India signed the Memorandum of Understanding on Double Taxation Avoidance and Bank Cooperation between the Two Countries.
In 2006, the governments of China and India signed the "Bilateral Investment Protection Agreement."
In 2014, the Chinese and Indian governments signed the "Five-Year Development Plan for Economic and Trade Cooperation."
