Premier Wen Jiabao will be accompanied by the biggest ever Chinese trade delegation to India when he touches down in New Delhi next Wednesday on a three-day visit, during which the two countries’ fast-growing but increasingly imbalanced trade relationship will be in focus.
As of Wednesday, more than 250 representatives from 100 Chinese companies, in sectors ranging from manufacturing and banking to Information Technology, had confirmed their participation in next week’s visit.
A provisional list featured some of China’s most well-known State-run firms, from banking behemoths Bank of China and the Industrial and Commercial Bank of China to Sinosteel, one of the world’s biggest importers of iron ore, which is India’s biggest export to China.
The list featured some surprising new entrants, most notably in the real estate and construction sector. More than 20 of China’s biggest real estate players will be represented, such as the Shanghai Urban Construction Group.
The power sector is also heavily represented, including Shanghai Electric, which recently inked a record $ 8.3 billion deal with Reliance Power to supply 36 coal-fired power generation units. The power sector is one area where Chinese companies have had considerable success in India, estimated as supplying power equipment to one in every four power plants currently coming up in India. Another is the supply of telecom equipment. Representatives from giants Huawei and ZTE will accompany Mr. Wen next week.
Amid persisting political uncertainties in the bilateral relationship, trade has emerged as a key issue in the forthcoming visit. Officials have said Mr. Wen’s trip will be a “landmark” visit for bilateral ties, though breakthroughs are unlikely in any of major political issues the two countries are grappling with, such as the long-running boundary talks, China’s issuing of stapled visas or United Nations Security Council reforms.
Even in the trade relationship, a widening trade imbalance, in China’s favour, has increasingly concerned Indian officials. While bilateral trade has seen rapid growth, with the two countries on track to meet a $ 60 billion target this year and China set to again become India's largest trade partner, the trade deficit grew to a record $ 16 billion. As of October, bilateral trade stood at $ 50 billion, with Indian exports, mainly made up of iron ore and raw materials, making up $ 17 billion.
But Indian officials say the overall growth in trade still remains a source of optimism amid other uncertainties. On Mr. Wen’s last visit to India, in 2005, two-way trade was less than $ 20 billion.