On Thursday, Beijing’s ambassador to India, Xu Feihong, articulated China’s intent to strengthen economic relations with India. Xu expressed a keen interest in welcoming more Indian investments and commodities into the Chinese market. He underscored the need for a “sound business environment” for Chinese enterprises operating in India, aiming to foster a more cooperative economic relationship between the two nations.
Renewed Efforts to Strengthen Economic Relations
These remarks come as part of China’s broader strategy to enhance economic cooperation with India, despite lingering tensions from a deadly border clash in 2020. The confrontation along the Himalayan frontier significantly strained diplomatic and business relations between the two countries. In response, India implemented stricter scrutiny on Chinese investments and imposed additional regulations on Indian firms with Chinese stakeholders.
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However, recent developments indicate that the Indian government is reconsidering some of these restrictions. Many Indian companies have encountered difficulties in scaling up their manufacturing capabilities, leading to a review of rules that have previously hindered Chinese involvement in the Indian market.
Calls for Greater Cooperation in Various Sectors
During his address at an event in New Delhi, Ambassador Xu emphasized China’s eagerness to advance cooperation with India in various fields, including science and technology. He also advocated for the resumption of direct flights between the two countries and suggested simplifying visa procedures for Chinese citizens. These measures are intended to enhance connectivity and facilitate smoother business interactions between the two nations.
China’s Welcome for Indian Commodities and Investments
Ambassador Xu highlighted China’s openness to receiving more Indian commodities and investments. He encouraged India to provide a supportive business environment for Chinese enterprises operating within the country. This gesture reflects China’s commitment to nurturing a mutually beneficial economic relationship, despite the ongoing diplomatic challenges.
India’s Trade Relations with China
China remains India’s largest supplier of goods, particularly in the industrial sector. While India’s trade deficit with China briefly decreased following the 2020 border incident, it expanded again to $85 billion as of March 2024. This figure underscores the critical role that economic ties play between the two countries, even amidst ongoing political and diplomatic challenges.
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