India, China to set up trade mechanism
India and China have decided to set up a high-level mechanism on trade and investment and focus more on defence and security ties. The biggest takeaway from the two-day India-China second informal summit, named “Chennai connect”, was that it has ensured against any fundamental disruption in bilateral ties, Foreign Secretary Vijay Gokhale told mediapersons here today.
Over the past two days, the leaders focused on developments since the first informal meeting at Wuhan more than a year ago, which produced “visible progress”. Kashmir, which has caused acrimony between the two countries, was not raised.
The leaders termed terrorism as a common threat. “As countries that are large and diverse, they recognised the importance of continuing to make joint efforts to ensure that the international community strengthens the framework against training, financing and supporting terrorist groups throughout the world and on a non-discriminatory basis,” read a MEA press statement.
Taking into account the $50 billion plus trade deficit with China, which India says is economically unsustainable and sensitive to domestic industry, a new mechanism will be established to discuss trade, investment and services, at an “elevated level” to be co-headed by Chinese Vice-Premier Hu Chunhua and Finance Minister Nirmala Sitharaman.
Xi welcomed Indian investments in IT and pharma and agreed to explore the possibility of establishing manufacturing partnerships as well as identify sectors where investments can be made by companies of both countries. “China is ready to take sincere action and discuss the balance of trade in concrete way to reduce (India’s) trade deficit,” Xi reportedly told Modi.
In what seems to be a similar stand that China will take with Nepal, the two sides decided to engage more on defence and security to enhance trust between the two militaries and security forces. China has sent an invite to Defence Minister Rajnath Singh to visit China as a first step in this direction. In an article in a Nepal newspaper today, Xi wrote of the need to scale up border defence contacts and enhance security cooperation.
The leaders directed the Special Representatives on border issues to meet soon. Their previous meeting scheduled for September was aborted after the Indian side said it had scheduling issues. It was also decided to bring a new focus to people-to-people ties. “We need (favourable) public opinion to broad-base the relationship,” stressed the Foreign Secretary.
Asked for a timeline for implementing the decision, Gokhale said the PM “expects us to do this before next informal summit. We are looking at a one-year timeframe.’’ Xi spoke of greater facilitation for Mansarovar yatris while Modi made suggestions on the connection between Tamil Nadu and China’s Fujian province.
Today the two leaders also discussed regional and international issues. Xi took note of India’s concerns on the Regional Comprehensive Economic Partnership and agreed that there was a need for a balanced trade pact among 16 countries, including India and China. Xi left for Kathmandu after attending a lunch hosted by Modi.
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