Bilateral trade after four months of this year reached $20.87 billion, down 6.2 per cent
Even as External Affairs Minister Salman Khurshid is expected to reinforce India's message to China to address the trade imbalance during his two-day visit which begins here on Thursday, new trade figures have shown that India's exports to China in April are down by 24 per cent from a year earlier — the biggest decline among all of China's major trading partners.
Figures released here on Wednesday by the Chinese General Administration of Customs (GAC) painted a gloomy picture of the state of bilateral trade, despite a surprising boost in China's overall trade performance that bettered market expectations. India's trade deficit with China, after four months of this year, has ballooned to almost half of the entire trade volume.
Bilateral trade after four months of this year reached $20.87 billion, down 6.2 per cent. Trade last year fell by 12 per cent to $66 billion, even as both countries set an ambitious target of $100 billion by 2015.
Indian exports to China are down 24 per cent as of April, reaching $ 6.02 billion. The decline contrasted with rising figures for exports from other developing countries among China's biggest trading partners: exports from South Africa were up 55 per cent, and those from ASEAN countries up 7 per cent.
Ban on iron ore export
One reason is the ban on exporting iron ore. And, while India has been pushing China to open up its markets to pharmaceuticals and information technology, the moves have appeared to have made little headway so far.
China’s overall trade figures, however, exceeded market expectations. The unexpected slowdown in the Chinese recovery — the economy grew 7.7 per cent in the first quarter, down from 7.9 per cent in the last quarter of 2012 — had dampened expectations ahead of the release of trade data on Wednesday, reinforced by uninspiring factory data.
Recovery may be on track
The GAC said foreign trade grew 15.7 per cent, up from the 12.1 per cent increase in March, with exports rising 14.7 per cent. Imports were up 16.8 per cent from a year earlier, suggesting the Chinese recovery may be on track.
Concerns have, however, been raised over the accuracy of export data, with many firms seen by Chinese analysts as overstating their figures in the first few months of this year.
“I have no strong conviction whether the data reflects reality,” Zhang Zhiwei, chief China economist at Nomura, told Reuters.
“China’s State Administration of Foreign Exchange recently launched new rules to crack down against capital inflows disguised as trade payments. I’m suspicious about the trade data,” Mr. Zhiwei said.