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PM addresses the india-china economic, trade and
investment summit
Tuesday, January 15, 2008
The Prime Minister, Dr. Manmohan Singh, attended the
India-China Economic, Trade and Investment Summit in Beijing. Following is the text of the Prime Minster’s address on
the occasion:
“I am delighted to have this opportunity to meet you all, a
unique gathering of businessmen and businesswomen from the two
of the fastest growing economies of the world, today.
Businessmen throughout history have been promters and
protectors of human civilization.
The India-China Economic Trade and Investment Summit is a
unique gathering of businesspersons representing as I said two
most populous countries of the world. You have grown
competitive by starting from continent - sized markets and
graduating to world markets. Businesmen of India and China are
the symbols of the growth stories of both our countries.
Businessmen are the creators of wealth. I therefore, salute
your dynamism and entrepreneurship. Your meeting today is an
expression of your confidence in the potential for economic
cooperation between our two great countries. It is equally a
testimony to the progress that business communities from our
two countries have made in working with each other. Much has
been done, much has been achieved but I honestly believe the
best is yet to come.
India and China are today the fastest growing large economies
in the world. We should remember that China, India and Europe
had almost equal shares of world income in the early 18th
century. As the 21st century unfolds, both India and China
stand poised to regain their weight in the evolving global
economy.
Our two countries will need to work together to ensure that we
contribute to, even as we benefit from, the economic
resurgence and integration of Asia. Our two economies are
becoming engines of economic growth and must use our natural
and human resources, technology and capital for the common
benefit of our region and indeed the world as a whole.
The Indian economy has witnessed growth rates of close to 9%
per year in the last three years. Our macro-economic
fundamentals are strong. We have undertaken a series of
economic reform measures to facilitate investment and growth.
Our savings and investment rates have increased to 35% of our
GDP and are rising. With a predominantly young population,
there is potential for further increase in these rates.
Although India is more integrated with the global economy than
ever before, our growth has been largely fuelled by an
expanding domestic market. All these factors give us
confidence that we will be able to step up our annual growth
rate to 10% within the next five years.
Our bilateral trade with China has doubled in the last two
years. Our trade target of 20 billion US dollars by 2008 has
been reached two years ahead of schedule. The revised target
of 40 billion US dollars by 2010 is also likely to be achieved
two years ahead of schedule.
This makes me wonder whether our two Governments have been
underestimating the capabilities of our respective industries
and their strong urge to do business with each other. We
therefore propose to set more ambitious targets.
In the area of trade, the challenge before us is to diversify
our export basket to China. I would urge Indian business to
vigorously pursue opportunities for expanding non-traditional
items of export. Such efforts, when matched by greater market
access for Indian goods in China, will help to bridge the
rising trade deficit between us.
In addition to our competitive manufacturing industries, India
has a diversified agricultural production base. Our food
processing industry is also growing rapidly and we can supply
quality agricultural and marine products to the Chinese
market. A conducive environment should be created for this
trade to expand.
The services sector accounts for more than 50% of India’s GDP
and more than 40% of China’s GDP. India has had considerable
success in positioning itself in hi-tech services in world
markets. There are today enormous opportunities for both India
and China to expand trade in services, particularly in
construction and engineering, education, entertainment,
financial services, IT and IT enabled services, transport,
tourism, and health. We will work together with the Chinese
government to remove administrative barriers and simplify
regulatory regimes in order to move forward in all these
areas.
Chinese companies have been actively engaged in the Indian
market and I welcome that phenomenon. I understand that
Chinese firms have contracted projects in India worth over 12
billion US dollars. Indian majors have set up a number of
joint ventures or subsidiaries in China in the pharmaceuticals
and software sectors, among others. This too I greatly
welcome.
We must strengthen the base of our economic cooperation
through business alliances and collaboration in technology
transfer and development. We seek to promote bilateral
investments in traditional sectors such as petrochemicals,
steel, healthcare, IT and automobiles. Equally, our
entrepreneurs should explore opportunities in new areas such
as biotechnology, advanced materials, renewable energy and low
carbon technologies.
I would therefore suggest a three-pronged strategy for the
chambers of industry and commerce of both countries to achieve
these goals and objectives. Firstly, you should jointly
develop a strategic plan for the future so that both of us a
vision of our economic cooperation and a road map for its
implementation. This will ensure that a long-term strategic
perspective that looks ahead to future challenges and
opportunities guides our relationship and ourties.
Secondly, we should develop profitable business models that
factor in our complementarities and competitive strengths and
the special needs of large markets both in India and in China.
The opportunities are many and innovation is the key word to
exploiting them.
Lastly but equally importantly, you need to acquire insight
into each other’s markets, business customs and managerial
styles. In the final analysis, doing business is about
developing understanding and trust in your partners.
Additionally, the business communities of our two countries
should develop a deeper understanding of the macro-economic
outlook, the regulatory regimes and of factors that have a
bearing on the competitiveness of enterprises in both our
countries.
I am very glad to know that the number of visitors exchanged
between our two countries approached the half million mark
last year and direct flight connections have risen to 22 a
week. This is encouraging but not good enough. We need to
encourage this growing interaction, including through easier
grant of visas.
I would like to assure this distinguished gathering that both
governments will work together to put in place an enabling
environment for greater trade, investment and economic
interaction between our two great countries. This has to
include creating a level playing field by addressing such
issues as non-tariff barriers, IPR protection and
market-related exchange rates.
All countries must compete in global markets and such
competition is not inconsistent with co-operation nor is it
adversarial. The industrialised countries constantly compete
with each other and they see this competition as constructive
and mutually beneficial.
Economic cooperation between India and China has become a
principal driver of our strategic and cooperative partnership
for peace and prosperity. Several bilateral understandings and
agreements are already in place to address different sectoral
aspects which impact on our economic cooperation. India and
China working together should develop a habit of mutually
advantageous cooperation.
In 2003, our two Governments had established a Joint Study
Group to examine the potential for economic engagement.
Pursuant to this, a Joint Task Force has finalized its report
on the feasibility of a India-China Regional Trading
Arrangement. During my visit, I look forward to discussing
further steps in this regard with the leadership of China.
In conclusion, I would like to congratulate the dedicated and
hard-working people of China for the rapid economic progress
that they have made in the last thirty years, when the reform,
opening up process was launched. I would also like to thank
the China Council for the Promotion of International Trade for
organizing this unique event, and making this partnership of
the business communities of our two countries possible to give
greater content and depth befitting our strategic and
cooperative partnership for peace and prosperity and
development.”
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