nov-Dec 2009

November - December 2009

INDIA-CHINA CHRONICLE An ICEC Council Publication

印度中国新闻记事

1950 - 2010

60 Years of India-China Diplomatic Relations INSIDE STORY l Trend of China-India Friendship Irreversible l The China-India Relations: Protracted Conflict or Growing Cooperation? l The Geo-Civilizational Path: A Solution for China-India Relations? l 3rd India China Finance Conference l Five Predictions for the Chinese Economy in 2010

ICEC

COUNCIL Chairman

Contents

Abid Hussain

Vice Chairman V. Krishnamurthy

President P. S. Deodhar

Exec. Vice President Suresh Sharma

Advisory Board P. S. Deodhar Amir Ullah Khan Bibek Debroy C. V. Ranganathan Jairam Ramesh Mani Shankar Aiyar Rajendra S. Pawar W a n g Y a o (China) Chen Duo (China)

ARTICLES l Trend of China-India Friendship Irreversible - H.E. Mr. Zhang Yan

1

l The China-India Relations: Protracted Conflict or Growing Cooperation?

- AKM Khairul Islam

4

l The Geo-Civilizational Path: A Solution for China-India Relations?

- Liu Xi, Lucy

7

l 3rd India China Finance Conference November 10-13, 2009, Mumbai & New Delhi

9

l Five Predictions for the Chinese Economy in 2010 - Yiping Huang

13

NEWS BRIEFS l China is the World's Top Exporter of Goods, in 2009

15 15

Mohammed Saqib

l China and India in the Decade Ahead http://chinaindiacitizensinitiative.blogspot.com/

India-China Development Studies Group

REGULAR FEATURES

Secretary General

P. S. Deodhar Mohammed Saqib Navneet Sharma Chunmei Rao Furong Tian Anchit Goel Irfan Alam

l Updates on Laws in India and China

15

l TBT and SPS Notifications by India and China

16

l Upcoming Exhibitions in India and China

17

l Economic Indicators of India and China

21

Solicitors DESAI & CHINOY 88-B, Mittal Towers, Nariman Point, Mumbai 400 021.

The information contained in this magazine has been reviewed for accuracy and is deemed reliable but is not necessarily complete or guaranteed by The ICEC Council. The views expressed in this digest are solely that of the writers and do not necessarily reflect the views of The ICEC Council.

All advertising enquiries, comments and feedback are welcome at: response@icec-council.org K-19 (GF), South Extension Part-II, New Delhi - 110 049. Tel. : 011-46550348 www.icec-council.org

ICEC Council is a Registered Trust in India, Redg. No. 160 in additional Book No. IV, Volume No. 68 on pages 99 to 107.

Editorial Thoughts Dear Friends, Here’s wishing you and your near and dear ones a very happy new year! With all the major economies showing signs of recovery, 2010 should bring in hope, well-being and prosperity for the entire world and its people.

We present this issue of the newsletter with a lot of optimism. This year marks the 60th year of India-China diplomatic relations. ICEC plans to commemorate this year of friendship between the two Asian giants by bringing together articles and intellectual pieces that look at different aspects of the relationship that has shaped over the last few decades. The India-China ties have weathered many highs and lows: but both countries continue to positively engage each other. They realize the need to identify issues and work out an effective arrangement for future partnership. The Copenhagen summit in 2009 is a case in point. It has signaled that both India and China have common concerns - the challenge is to work together.

This issue, the final number of 2009, and in a way the first of 2010, plans to set the stage for celebrating the sixth decade of India and China’s formal diplomatic ties. The articles have been carefully selected to capture the uniqueness of the relationship. Ambassador Zhang Yan’s piece titled "Trend of China-India Friendship Irreversible" is a perfect choice for this issue for obvious reasons. It outlines the enthusiasm on part of both India and China to improve the bilateral relationship and take it to a new level of partnership. Yiping Huang's piece charts out the possible scenarios that may emerge for the Chinese economy. AKM Khairul Islam touches upon the different avenues and possibilities of cooperation between India and China and conveys a distinctly optimistic scenario about more such collaboration in future. The remaining articles also examine the relationship from different perspectives.

In keeping with our objective to expand the scope of this newsletter we welcome your contributions on China, India and different aspects of their relationship. We also eagerly look forward to your valuable comments and feedback.

Warmest Regards, Parama Sinha Palit, PhD

IN FOCUS Trend of China-India Friendship Irreversible

1

- Zhang Yan

I

n the second term of the United Progressive Alliance government, China-India relations have experienced a smooth transition and taken on a new momentum of sound development. In June this year, Chinese President Hu Jintao met Prime Minister Manmohan Singh in Yekaterinburg, Russia. Both leaders reiterated they would jointly promote the sound development of bilateral relations, enhance mutual trust, deepen mutually beneficial cooperation, strengthen communication and coordin ation, and push forward the Strategic and Cooperative Partnership between the two countries towards continuous, stable, and healthy development.

In his congratulatory message to Premier Wen Jiabao on the occasion of the 60th Anniversary of the Founding of the People’s Republic of China, Prime Minister Singh reaffirmed the same sentiment. In August, Chinese State Councillor Mr. Dai Bingguo paid a successful visit to India and held in-depth talks with Indian National Security Advisor M. K. Narayanan on the boundary question and exchanged views on bilateral, regional, and international issues. In September, Jairam Ramesh, Minister of State for Environment and Forests of India, visited China and exchanged views on a wide range of issues, including climate change, environment and forests with his Chinese counterparts.

In terms of economic and trade cooperation, in 2008 China became India’s largest trade partner and India the 10th largest trade partner of China. The global financial crisis has seriously impacted the real economy of both countries and caused a downturn in our industrial production and exports. The two countries do face huge challenges to sustain the growth of our bilateral trade. In spite of this, China and India as two emerging markets are still outperforming others on the whole. We have advantages such as vast markets and strong domestic demand, which have made our two countries powerhouses for the recovery of the world economy.

Both sides should tap the potentials for economic cooperation, work together to improve the trade structure and look for new areas for growth, correct the trade

imbalance, oppose trade protectionism in all forms, accommodate mutual trade concerns, and create a sound environment for trade and mutual investment. We should actively discuss the feasibility of a Regional Trade Agreement, make full use of the mechanisms of Economic and Financial Dialogue and the Joint Committee on Science, Technology and Trade, so as to create solid foundation for the steady development of bilateral economic and trade cooperation - with a view to expanding our bilateral trade to $60 billion by 2010.

In international affairs, the two sides have maintained effective cooperation and coordination within the framework of the China-India-Russia Trilateral Mechanism, BRIC, the G20, and other forums. China and India have been making joint efforts on major international issues, including climate change, the Doha Round talks, the global financial crisis, countering terrorism, energy and food security, etc., with a view to protecting the interests of our two countries and other developing countries, and promoting a fair, just, and reasonable international system.

There are good reasons for China and India to work closely on global issues. Both are developing countries, share historical experiences, and face similar tasks today. The combined population of the two countries accounts for 40 per cent of the world’s total. With the growing economic strength, China and India are enjoying a status and role that are much more appreciated in the world arena. Our common concerns and interests in international affairs require us to consolidate our coordination and cooperation.

The simultaneous emergence of China and India is an eyecatching phenomenon in today’s world. China welcomes India’s development and its bigger role in international affairs. We hope the Indian side adopts the same attitude towards China. China and India should become cooperative partners instead of competitive rivals. Both countries should seek for a win-win result instead of a zerosum game.

It is a strategic choice made by both governments and peoples, proceeding from the common and fundamental

1 This article by Ambassador Extraordinary and Plenipotentiary of the People’s Republic of China to the Republic of India appeared in the Hindu on 12/10/09. See http://www.thehindu.com/2009/10/12/stories/2009101255150800.htm.

1

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

interests of both countries, to establish the China-India Strategic and Cooperative Partnership for Peace and Prosperity. President Hu Jintao said recently that China has always, from a strategic and long-term perspective, firmly and unswervingly promoted harmonious, good neighbourly, and friendly cooperation between China and India. Indian Prime Minister Manmohan Singh, on his part, stated that the Indian government would give top priority to its relations with China and there is enough room in the world for the two countries to achieve development.

Although there are certain forces in the world that do not want to see China and India join hands, the historical trend of bilateral friendship is irreversible.

China has made impressive economic progress, but it is still a developing country. The major task in the foreseeable future remains the development of the national economy and improvement of the people’s livelihood. China will firmly pursue the path of peaceful development, and pose no threat to other countries. Its development means opportunity to India and other countries. Even when China becomes stronger, it will continue to adhere to the Five Principles of Peaceful Co-existence, and will never seek hegemony or engage in expansion. This is the solemn commitment the Chinese government has made to the whole world.

Recently, the Indian media reported abundantly on the India-China boundary issue. The spokesperson of the Ministry of Foreign Affairs of China has repeatedly clarified the Chinese position toward the boundary question. Indian leaders and senior officials also refuted the reports in one voice and called for media restraint. As a matter of fact, with the efforts of both sides, the China-India boundary areas generally remain peaceful and tranquil.

China strictly acts in accordance with the agreements. At the same time, both governments have been continuously seeking a fair, reasonable, and mutually acceptable solution through negotiation. The China-India Special Representative talks have made significant progress. The boundary question is an issue left over by history, sensitive and complicated, which needs to be resolved with more patience and wisdom. It is dialogue rather than storymaking that would solve the issue.

In the process of globalisation, there is a strong trend of economic integration between countries. They complement each other in different ways to achieve common development. In recent years, some Chinese companies have come to India. They not only undertake projects but also contribute in many ways to the Indian economy, especially in infrastructure development. To my knowledge, those companies usually hire a lot of local

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

workers. Take Huawei India as an example. Over 80 per cent of its staff members are locals, most of them professional and technical personnel. Among those Chinese people who come to India to work on the projects, they are required by the projects. They work along with their Indian colleagues and learn form each other. They will return to China once they complete the project.

Therefore, the Chinese companies in India are an indispensable part of economic cooperation between China and India. If we manage this properly, it will yield a win-win situation. As for the national security concerns on the part of the Indian side, I can assure you that the Chinese Government will never allow Chinese companies to engage in any acts that may undermine national security of other countries, including India.

Media play a unique role in bilateral relations. People of the two countries increase their mutual understanding and friendship through objective reporting. A positive public opinion environment is conducive and necessary to the development of bilateral relations. Indian media serve as a ‘window’ or a ‘bridge’ to the Indian public to understand China. The opinions and perspectives of the Indian media on China and on bilateral relations may influence and even shape the image of China in the eyes of the Indian government and people. The media should keep abreast with the paces of the bilateral relations and tap more positive information, so as to convey objective messages to the two peoples and serve as a booster to promote bilateral relations.

Looking ahead, I foresee a more and more active relationship. The two sides are busy working on matters relating to the Indian President’s visit to China. A hotline between the two sides will be ready soon. Chinese Foreign Minister Yang Jiechi has invited Indian External Affairs Minister S.M. Krishna to visit China at his convenience. A meeting of the Foreign Ministers of China, India, and Russia will be soon held in India. The two countries are also actively preparing to mark the 60th anniversary of the establishment of diplomatic relations in 2010, coinciding with the activities of the China Festival in India and the India Festival in China. All those interactions will push the bilateral relations to a new height.

I am of the view that the China-India relations are standing at a new starting point, facing new opportunities for development. As Chinese Ambassador to India, I am encouraged by the potential of our bilateral relations and confident about its future.

2

3

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

The China-India Relations: Protracted Conflict or Growing Cooperation?

1

- AKM Khairul Islam 2

P

ost-colonial India and Communist China faced similar types of problems such as extreme poverty, unemployment, and lack of modernization of their economies. Both countries adopted state-led economic development strategies (communism in case of China, and socialism in case of India) to improve their economic conditions. However, despite some initial success, state-led development strategies failed to solve their economic problems. China abandoned its state-led economic growth strategy in the late 1970s and India in early 1990’s. Since their market and outward-oriented and western technology driven economic reforms, both countries have been growing very rapidly. Simultaneous and high economic growth of these two countries has been providing enough resources to their state leaders to modernize their military and pursue strategic interests beyond East and South Asia.

Now both China and India are growing powers in Asia.

Future Asian security, prosperity, and peace will depend on the relationship between India and China. The questions are: what are the patters and trends in Sino-Indian relations?

Sino-Indian Relations: Historical Legacies and Current Trends Both India and China were a part of great ancient civilizations in the history of the human race. Due to geographical proximity, both countries have common cultural and historical legacies. There is plenty of evidence of continuous trade and exchange of ideas through the centuries without either political cooperation or conflict.

There is little historical evidence of intense political interactions between them due to various reasons: first, both countries were self-sufficient for their existence; second, the geographical barrier imposed by the Himalayas prevented mass migration, territorial occupation and huge trade; third, the epicenters of both of the civilizations were too far from each other that discouraged direct interactions.

The epicenter of China’s civilization was east of today’s Great Wall near Beijing, and India’s was primarily centered in the Indo-Gangetic plain, too far from China’s civilization.

After 1962 war, the relationship between the two countries was bitter until 1976 despite sporadic efforts to fix the relations. Both Indian Prime Minister Indira Gandhi and Chinese Prime Minister Zhoi Enlai moved to begin normalizing relations. Due to their efforts, diplomatic relationship was finally reinstalled in 1976 after a gap of 15 years. Sino-India relations started to improve further after the change of Chinese leadership, and notably after the death of Mao in 1976.

Deng Xiaoping, new Chinese leader initiated an ambitious market-led economic reform and modernization policy for China in 1978. Deng realized that China needed stable and peaceful relations with other countries for its economic development. He abandoned ideology-based foreign policy and aimed to improve relations with the two super powers and tried to strike a cordial relationship with its neighboring countries. As part of his foreign policy, Deng Xiaoping initiated to improve China’s relation with India.

Similarly, Indian Prime Minister Morarji Desai also emphasized the normalization of relations with China. As part of normalization of relations, he sent his Foreign Minister Atal Bihari Vajpayee to China in February 1979 to carry forward the normalization of relations. During Vajpayee’s visit to China, Deng Xiaoping remarked that “China and India should for the moment put dividing issues on side and do some actual work to improve climate to go about the problem. Neither country poses a threat to the other. How can India and China not be friends?” Mrs. Indira Gandhi came to power in 1980 after resignation of Morarji Desai. She also emphasized peaceful Sino-India relations for peace and stability in Asia. In 1981, border talk started between the two countries. However, no major breakthrough had been achieved despite several rounds of ministerial level talks held between the two countries from 1976 and 1988. Former Indian Prime Minister Rajiv Gandhi’s visited China from 19 to 23 December1988, which is considered ‘path-breaking’ for Sino-Indian relations.

During this visit, India accepted China’s proposal that bilateral relations could be improved on the basis of Panch Shila and expanded before the solution of border disputes.

1 This paper is an abridged version of the original paper prepared by AKM Khairul Islam for the Department of Political Science, Southern Illinois University at Carbondale. An expanded version of the paper is available at http://www.allacademic.com/meta/p_mla_apa_research_citation/2/8/1/6/7/p281671_index.html#citation 2 AKM Khairul Islam is a PhD candidate with the Department of Political Science, Southern Illinois University at Carbondale.

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

4

After the collapse of the Soviet Union and the end of Cold War in 1991, Sino-Indian cooperation gained further momentum. After the fall of the Soviet Union, India lost its Cold War trusted friend and ally. Soviet disintegration had some impact on India: first, it removed major barrier for better Sino-Indian relations; second, India lost 20 percent of its export market due to economic decline of the Soviet Union that forced India to improved its relations with other neighboring countries including China; third, in the emerging uni-polar system, both China and India were worried about enormous U.S. military power. Both needed to cooperate with each other to counterbalance omnipotent U.S power in Asia. The process of normalization of SinoIndian relations has evolved through three ways. First, summit meeting between the heads of state and government; regular visits of high ranking military and civilian officials, intellectuals and business leaders; third, steady and gradual processes of confidence building measures (CBMs) through different agreements and treaties.

From the beginning of the 1990s, both countries concentrated on confidence building measures such as troop reductions in the borders, regular meetings of military commanders and political leaders, and intense bilateral talks to solve border disputes. Border trade started once again in 1992 for the first time after 1962 border war, and consulate offices opened in Mumbai in India and Shanghai in China (Price & House, 2007). Sino-India relations have been developing gradually and smoothly and reaching toward maturity. China and India have common interests in many issue areas. In the last few years, bilateral relationship between the two countries has improved greatly; high level visits have continued, border talks have achieved positive progress, trade has increased manifold, exchanges and cooperation in the field of science, technology, education have improved, and mutual trust in security and military areas also enhanced. Although there have been some twists and turns, still Post-Cold War bilateral relations between the two countries on the whole are stable and peaceful.

Conclusion Although Sino-Indian relations have improved a lot in recent years, still both countries consider each other as potential competitor and future strategic rival. There is no doubt that past history and especially mutual distrust due to 1962 Sino-Indian war, security complications and societal pressure will play a key role in shaping the relationship.

Similarly, growing economic interdependence, continuous political interactions, and mutuality of interests will also play a key role in shaping future relationship.

Now economic development is the number one priority for both China and India. Both countries need peaceful political and strategic atmosphere for their future economic growth. One of the major driving forces in recent Sino-

5

Indian relations is trade, which is growing very rapidly in recent years. Trade relations between the two countries stopped entirely after the 1962 border war, and it was not restarted until 1976. However, it was very insignificant in the 1980s and started to grow very rapidly since the very beginning of the 1990s. Now China is India’s second largest trading partner after the United States, and probably will be the largest trading partners within few years. According to Chinese official sources, trade between the two countries will reach US $70 billion in 2010. There is no doubt that India’s and China’s economies are competitor in many respects. However, in the last decade, Sino-India trade has increased twelve-fold that indicates both economies are complementary as well as supplementary. Major strengths of Chinese economy are manufacturing, but India’s comparative advantages are on knowledge-based service sector. Opportunities of fruitful cooperation are possible in many sectors such as manufacturing, service, tourism and investment. China and India have some common economic interests. They can gain a lot by trading with one another and investing in each other economies. Similarly, they can achieve a lot by cooperation in different international and regional economic forums. However, the robust economic relations depend on cordial political relationship and trust.

During his visit in India in 2006, Chinese President points out that “[t]he development of India and China are complementary to each other, not repulsive to each other.

China honestly welcomes India’s development, supports India in playing a greater role in international affairs, and sincerely wishes India continues new achievement in the future”. He further points out that the purpose of his visit in India “is to deepen friendship, increase mutual trust, expand cooperation, and plan for the future”. China and India are also facing some common problems such as energy security and sea lane security that require collective strategy.

According to the US Department of Energy, China’s oil consumption will rise 156 per cent and India’s oil consumption will rise 152 percent by 2025. Due to stagnant domestic production growth, both countries will become more dependent on imported oil. As a result, they will become more vulnerable to irregularities of supply and price volatility of oil and other energies. Both China and India are late comers in global oil system. They are facing fierce competition from much larger, resourceful and huge western oil companies. Cooperation between Indian and Chinese oil firms is essential. Before 2002, India and China fiercely competed for global and oil and gas fields acquisition. However, the realized that their fierce competition will harm instead of benefit them. Energy cooperation between India and China started in 2002, when India’s Oil and Natural Gas Company (ONGC) purchased 25 per cent share of Sudan’s Greater Nile Oil Field operated

by China National Petroleum Cooperation (CNPC). After that, their cooperation in energy sector has increased manifold and that is beneficial for both countries. Similarly, they need collective action in many other areas.

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

A bilateral consensus has already emerged that both countries will avoid any major conflict in the future.

However, for a cordial and harmonious relation, the leadership of both countries needs to address a number of issues, such as border disputes, U.S. factor in Sino-Indian relations and security dilemma, having potentials for causing damage to the ties of these two countries. D.S. Rajan points out that “the development of Sino-Indian relations in the last two and half decades has been a logical consequence of the strategic thought process that has been evolving gradually for some time in both countries.”

Amardeep Athwal argues that “There is no reason to expect that Sino-Indian relations will once again spiral downward given the positive momentum generated in recent years.

Both India and China set out on the path of creating dependable expectations of peaceful change and as long as the political will remains, Sino-Indian relations will

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

continue to progress.” Athwal further points out that “China and India have a lot more to lose from competing with one another than from cooperating to pursue mutual gains. In this way the world is no longer the same one that existed when China and India fought their border in 1962.

Both China and India are facing pressures to integrate into the US-led international economy and in their bilateral relations are realizing that there is much to gain from cooperation within this international environment.” Now both countries foreign policies are based on pragmatic and rational calculations instead of ideological orientations.

Both realized that their national interests are compatible despite some unresolved problems. Current Sino-India relations indicate future cooperation between the two countries. Definetely Asian’s future will not be the Europe’s past.

6

The Geo-Civilizational Path: A Solution for China-India Relations?

- Liu Xi, Lucy 1

T

he 2nd China-South Asia International Cultural Forum, under the title "India, China and Asia: GeoCivilizational Perspectives." was convened in New Delhi over the three days 4-6th Dec 2009. It drew scholars and practitioners from India, China, United States, Singapore, and etc. Sponsors of the forum included the Institute of Chinese Studies, Delhi, National University of Singapore, Nalanda-Sriwijaya Centre (Institute of Southeast Asian Studies), Singapore as well as Delhi University.

This is not the first time that the idea of a geo-civilizational perspective/paradigm has been raised in regard to contemporary Sino-Indian relations. Prof Tan Chung, the leading advocate of this idea, has argued that a geocivilizational paradigm is the only way to bail out the present international crises. He stressed this viewpoint at the above mentioned forum.

The very term "geo-civilizational perspective" was inspired from "geo-political perspective", a term familiar to many scholars in the field of International Relations. Prof Tan believes that the commonality of the geo-civilizational paradigm finds its roots in the Chinese idea of 世 界 大 同 shijie datong (grand harmony in the world) and "vasudhaiva kutumbakan" (world one family) in Sanskrit. Here, I would argue that unlike "geo-political" perspectives which are concerned principally with security and articulating strategic interests, "geo-civilizational" perspectives are directed at fostering relations between entities in a variety of spheres, not limited to security and strategic interests, reaching beyond the narrow concepts of the nation-state system. A geo-civilizational perspective expands the angles in examining international relations, extending beyond a mere security, economic and political discussion to include historical interactions, as well as cultural, religious and intellectual exchange between different entities.

There is a perception among some scholars that since China and India have had a two thousand year history of a peaceful dialogue and exchange, a geo-civilizational paradigm could recreate such friendly interactions. I would like to put forward a different opinion.

The historical Buddhist interactions during the 1st millennium have been proposed as the best illustration of a friendly dialogue between India and China. Indeed more than 2,000 years ago India was the birth place of the Buddha and, with the decline of Buddhism in India in the 13th century, the translated Chinese Buddhist texts became the main sources of studying Indian Buddhism. However, the notion that the Buddhist link constituted a real dialogue between China and India needs to be more carefully scrutinized. What kind of dialogue actually took place between Indians and Chinese? What did Indians learn from the Chinese? There are no clear answers to these questions.

The Buddhist connection seems to have been more of a oneway learning experience rather than a substantial dialogue between the two civilizations.

A geo-civilizational perspective is seen as warranted by its proponents because of the present complexities confronting India-China relations, complexities that seem impossible to resolve if simply a geo-political perspective is employed. These include issues such as the border dispute, Tibet and Pakistan, as well as the hostile attitude of the respective media towards each other. A more fundamental obstacle is the lack of mutual trust between the two states since the 1962 War. 1 The author is a Research Associate with Nalanda-Sriwijaya Center, Institute of Southeast Asian Studies (ISEAS), Singapore. The views expressed are personal.

7

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

Moreover, for some later Chinese, the Buddhist connection with India was in fact a source of some confusion. When, in the 19th century, Chinese saw that India had become a British colony and a place for opium plantation, they expressed deep disappointment at its failure to resist imperialism. They were also frustrated to witness the strong contrast between a prosperous Hinduism and a withdrawing Buddhism in India. For instance, Kang Youwei (康 有 为 ), who traveled to India in the early 20th century, clearly voiced this confusion in his Travelogue of India (印度游记). He wrote: "The Buddha and the opium were both products from the same place. How strange!".

Another article published in Beijing nübao (北 京 女 报 ) even made mockery of the Indian people and the country’s Buddhist legacy: You thought that India was just fine, huh? Then why did it invite destruction [heyi youwang ne]? It is because they knew superstition. When the British arrived in the cities, they [the Indians] just sat around praying to Buddha... praying that their city would not be destroyed. What do you think: are these Indians foolish, or what? Do they deserve to die, or what? After not too long, they became slaves of the British and they’re still resting in their dreams.

Even though the existence of a real, substantial dialogue between China and India in the past remains questionable, this does not mean that the two Asian giants cannot today initiate dialogue as a new phenomenon. Even if we "discount" the most cited example of a historical Sino-India friendship, this does not mean that a geo-civilizational perspective has no validity. To the contrary, in agreement with Prof Tan, I would like to argue that the geocivilizational perspective is an innovation that offers a useful avenue for better communication between China and India.

Both proud of their ancient civilizations, China and India tend to be self-centred and lack willingness to engage in dialogues when they meet each other.

The geocivilizational paradigm becomes most relevant because it goes beyond a mere geo-political perspective, and provides more opportunities to promote dialogue in multiple spheres.

Firstly, a geo-civilizational paradigm creates a historical perspective, which is essential for China and India if they

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

are to begin to understand each other. For the Chinese, the present is made from the past. Without studying the history behind China’s contemporary development and problems, any lessons drawn cannot be in-depth. The Indians have a civilization even longer than Chinese, albeit a very different type of civilization. For two nations who value their history, a historical perspective is the key to bringing them closer. A breakthrough in the 2nd ChinaSouth Asia Cultural Forum was that it dedicated two panels to discussing the China-India interaction during the premodern times. These included papers such as the "Bengal connections with Yunnan", "Chinese perception of India during the colonial period” as well as "Indians in Xinjiang and the Anglo-Russian Great Game." Such attempts presented a wider picture of Sino-Indian relations in a broader framework of space and time.

Secondly, a geo-civilizational paradigm helps to create a social and cultural perspective which is crucial for achieving a better understanding between the two countries, especially for China to understand India. One of the greatest puzzles for Chinese is the diversity and dynamics of Indian civil society and culture. Since in China the state has been the primary driver of development from ancient time until the present, it is not within the natural Chinese logic to believe that India's development is mainly driven by the private sector and civil society rather than a concrete state master plan. Thus, Chinese people first need to stop using Chinese frames of reference to explain India's story; and then to study the various social actors, the private sector and civil society in particular, behind the growing Indian economy and changing society. Learning from India through its social and cultural aspects will also provide a good reference for building a more independent and vibrant civil society in China.

In conclusion, instead of dwelling in the past to search for evidence of a geo-civilization Sino-Indian dialogue, a geocivilization paradigm may earn its significance by its present relevance. A geo-civilizational paradigm could be an innovative approach worthy of further exploration for improving understanding between China and India.

Through an inclusive geo-civilizational perspective which generates greater historical, social and cultural comprehension and appreciation, it may be possible to initiate a real dialogue between the two giants of Asia, based on humility and respect.

8

3rd India China Finance Conference Mumbai & New Delhi, India November 10-13, 2009

From Left to Right: Mr. Anil Bharadwaj (Secretary General, FISME); Mr. Abid Hussain (Chairman, ICEC Council); Mr. Ma Delun (Deputy Governer, People's Bank of China); Mr. Dinesh Rai (Secretay, MSME)

India China Cooperation in Financial Sector "We have got out of the winter, but we are not in the spring still" Ma Delun, Deputy Governor of People’s Bank of China ICFC 2009 India-China Financial Conference (ICFC) is an annual event organized alternatively in India and China by India China Economic and Cultural Council (ICEC Council) and China Society for Finance and Banking (CSFB). The event is keenly watched and participated by the top leadership from public and private financial institutions of both the countries. This year, the conference was held during 10 - 13 November 2009 in partnership with Indian Banks Association (IBA) in Mumbai and Federation of Indian Small and Medium Industries (FISME) in New Delhi.

The conference began with the welcome address by ICEC Council President, Mr. P.S. Deodhar. The conference covered a broad range of topics ranging from the impact of 9

the recent financial crisis on the economies of India and China, the climate for infrastructure finance, rural banking and micro finance to regulatory framework facing the banking, insurance and capital markets in India & China.

A consensus emerged that both the countries have faced the financial crisis with a limited impact on their economies because of their prudential banking regulations, distance from the severely affected western markets and culture of saving. Importantly, post the financial crisis, regulations that balance innovation and risks need to be implemented.

During the inaugural session, Dr. K Ramakrishnan, the Chief Executive of the Indian Banks Association, pointed that India-China trade was increasing year on year. The two countries have already surpassed their bilateral trade target INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

of 2010 in 2009. But this year, the financial crisis has led to a 32 percent drop in bilateral trade, or about US$19 billion in the first half of the year, added Mr Ramakrishnan. He also mentioned that China’s imports from India are very concentrated and iron ore consists of 53% of total imports from India. Dr. Ramakrishnan also mentioned that bilateral trade between India & China had the potential to grow manifold especially in the areas of biotechnology, information technology, education, tourism, health and finance. He urged China’s banking officials to present how China can help in addressing India’s large infrastructure requirements.

The Chinese delegation comprising the Deputy Governor of People’s Bank of China (PBC), Mr. Ma Delun, Deputy Director General Research Bureau, PBC, Dr. Yi Cheng and the Deputy Counsel General of China in Mumbai, Mr. Li Xiangyang also expressed their appreciation at the growing trade and socio-cultural ties between India & China. Dr. Yi Cheng said he expected India-China trade to grow to US$60 billion by 2010, it has already surpassed US$51.8 billion in 2008.

Mr. Ma Delun assured the audience that India & China can get out of the abyss of the International financial crisis, "We have got out of the winter, but we are not in the spring still," he said. He also indicated that India and China could partner in many areas, including rural economic growth, where each country had expertise in certain aspects. While Mr Delun expressed scepticism over the US economy and its high unemployment rate, he said that China’s US$4 trillion stimulus package has helped the country clock a higher growth rate. From 6.8% in the fourth quarter of 2008, the economy grew by over 8.9% in the third quarter of 2009 and Mr. Delun said he was confident of an 8% growth for 2009.

On the sidelines of the conference and on the backdrop of rumours of pressure on the Chinese government to appreciate its currency "Yuan", Mr. Delun also said that the People’s Bank of China is contemplating a gradual liberalisation of its exchange rate. "Our exchange rate policy will have a better role in our balance of payments management," he was interpreted as having said.

Mr. Delun’s counterpart at the Reserve Bank of India, Ms. Shyamala Gopinath, the Deputy Governor of the Reserve Bank of India (RBI), said that due to India’s robust and prudent banking sector, the industrial sector is recovering and the economy had a limited impact due to the financial crisis. She said that while globally all countries should unite to seek a way out of the financial crisis and towards sustainable development; it was also the responsibility of each country to seek its own unique way forward. She expressed concern on the volatility of India’s capital flows and its impact on the financial stability of emerging economies like India. Last year the Indian market witnessed large-scale withdrawals by foreign institutional investors. However, from January this year, the FIIs have INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

been net investors to the tune of US$13 billion. She also said that last year, for the first time since 1998, India’s capital account balance turned negative mainly due to net outflows under portfolio investment, banking capital and short-term trade credit. Mrs. Gopinath also expressed her concerns over rising inflation, food prices and lowered credit growth.

During the second session, 'Impact of financial crisis on Indian and Chinese banking and strategies with dealing with the crisis', Mr. Xiao Yuanqi, the Director General at the China Banking Regulatory Commission laid out a few best practices of Chinese banks followed by them in the year after the crisis. He said, all Chinese banks had a minimum capital adequacy ratio of 8%. The quality of capital was improving and profitability of banks was on the rise with Return on Equity (ROE) and Return on Assets (ROA). Banks exhibited transparency of information and that corporate governance had improved. Agreeing with Mr. Xiao, Mr. Yang Dongping, Chief Risk Officer, Bank of Communications added that countries needed to keep in check their macro regulations while maintaining a balance between profit and responsibility. They need to follow rules and market discipline and work with integrity. He also said that banks should innovate and spread their risks, however the key is to identify the balance between stability and innovation.

While expressing the Indian perspective, Dr. Rajiv Kumar, Director and Chief Executive Indian Council for Research on International Economic Relations (ICRIER), said that the financial crisis affected all aspects of the Indian economy including financial markets, exports and exchange rates and that all national regulatory authorities should work together to contain the spread of future risks.

Expressing the upturn in the economy, Mr Kumar said that gross non-performing assets (NPAs) have fallen over the last few years. NPAs accounted for 5.2% in 2004-05, they accounted for 2.3% in 2007-08. Net FII and FDI inflows were on the rise and the stock market had bounced back.

Similarly, liquidity in the market had increased and external commercial borrowings were down from US$4500 billion in March 2008 to US$100 billion in Aug 2009.

Another panellist in this session, Mr Venkattesh R of DCB added that India had not suffered a major set back from the financial crisis due to high saving rates, prudential policies, fiscal deficit being largely funded from internal savings, current account deficit accounting for 1-2% of the GDP. A gradual, focused and calibrated opening up of the economy and the domestic savings is being channelled into productive areas of growth in India.

During the third session on Rural Banking and Microfinance in India & China the delegates from both sides shared experiences of the importance of widening and deepening the scope of rural finance in both India and China. While both countries had a wide network of micro finance institutions and farmer schemes to service their

10

rural populations banking needs, there are difficulties in controlling risks, offering banking services to a sparse population and better catering to the needs of the poor who didn’t have a banking history.

Mr. Change Yafeng, Head, Agricultural Finance Dept. of the Agricultural Bank of China said that credit flow to the rural areas of China had increased by 25% and that 35% of the farmers now had access to microfinance. He also said that rural banks had to explore various methods to help the poor. While farmer incomes had risen over the last few years, per capital income was still low.

During the fourth session on Infrastructure Finance in India & China Ms Liu Jingsheng, Managing Director, China International Capital Corporation Ltd. said China ranks 1st in ports capacity and it is constantly growing its railway, power and roads systems. China has 86,000 kms of railway second only to the US, 2 million kms of roads and produced 800 gig watt of power five times what it produced in 1949. Mrs Jingsheng expressed how China had expanded its infrastructure in a three tier system. She said that in the 1980’s the infrastructure sector grew on government investment, during the 1990’s, infrastructure was opened to foreign direct investment and in the 2000’s capital markets support infrastructure. She shared the strategies used by the Chinese government to attract FDI into China’s infrastructure sector in the 1990’s which helped propel the country. Ms Jingsheng said that China offered foreign investors a higher Return on Equity of 15% as compared to domestic investors which were offered 11%. This incentive helped pour money into ports, transportation, energy and city infrastructure, she added.

India's 11th financial plan outlays US$50 billion towards infrastructure and promotes public private partnerships to augment growth in the sector. The Indian delegates on the other hand stressed on the need for additional finances into the sector, competition between project developers to boost efficiency, the lack of co-ordination between the various agencies. Mr Rajagopalan, Chief General Manager, IIFCL, said that 85% of the projects are already being funded by the PPP model and that 113 projects have been sanctioned between 2006-09. He added that while reforms have been implemented in India’s infrastructure sector and 100% FDI is allowed, the sector continues to be riddled with problems and financial inefficiencies.

During the fifth and last session on Regulation on Banking, Insurance and Capital Markets, the Chinese delegates Mr. Xie Gong, Director General, Dept. of market Supervision at the China Securities Regulatory Commission laid down a few ground rules for the smooth functioning of the banking and capital markets. He advocated innovation of financial products, allowing micro finance to play a bigger role, promote the development of the bond market, and initiate small companies into the stock market. Mr. Meng Long, Director General, China Insurance Regulatory Commission stressed on the need to streamline the insurance sector in China's rural and agricultural sector.

Mr. Pei Chuanzhi, Vice President, China Foreign Exchange Trade systems added that the government should guide the market development and that one of the biggest challenges they faced would be to find a balance between regulations and innovations.

From Left to Right: Mr. P.S. Deodhar (Chairman, ICEC Council); Dr. K Ramakrishnan Chief Executive, Indian Banks Association); Ms. Shyamala Gopinath (Deputy Governer, Reserve Bank of India); Mr. Ma Delun (Deputy Governor, PBC); Dr. Yi Cheng (Deputy Director General Research Bureau, PBC); Mr. Li Xiangyang ( Deputy Counsel General of China in Mumbai) 11

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

Mr. Prashant Saran, Whole Time Member SEBI and Mr. Vijay Bhaskar, Chief General Manager, BBI stressed on the need for greater transparency and adopting international standards.

As part of the concluding session of the 3rd High Level India-China Finance Conference, a Roundtable Session was held in New Delhi on 13th November, 2009. The session was organized in association with The Roundtable Session today addressed financial issues facing Small & Medium Enterprises (SME’s) in India and China.

The Roundtable Session addressed financial issues facing Small & Medium Enterprises (SME’s) in India and China.

Dr. Abid Hussain, Chairman, ICEC; Mr. P. S. Deodhar, President, ICEC; Mr. Mohd. Saqib, Secretary General, ICEC; Mr. Sandip Ghose, Regional Director, Reserve Bank of India; Mr. Anil Bharadwaj, Secretary General, FISME; Mr. Dinesh Rai, Secretary, MSME; Mr. Paul Joseph, Principal Advisor, MCX; Mr. Arun Agarwal, President & Global Head (International Banking), Yes Bank and Mr. Ashwini Mehra Executive Vice President & Head, SBI were some of the prominent faces representing India. A twenty member delegation from China headed by Mr. Ma Delun, Deputy Governor of the People’s Bank of China was here on a week-long visit to India for the conference. The Deputy Governor was accompanied by senior officials from other Chinese regulatory bodies and financial institutions, such as Deputy Governor Mr. Ma Delun, Dr. Yi Cheng, Deputy Director General Research Bureau, PBC and Mr. Li Xiangyang the Deputy Counsel General of China in Mumbai.

Dr. Abid Hussain, Chairman, ICEC Council, in his opening remarks noted that, there are striking similarities & experiences in economic growth of India & China. He also added that, both countries need to work together to foster mutual confidence and alley fears.

Prof. Anwarul Hoda, Ex-Member, Planning Commission, pointed, that in view of the huge infrastructure finance deficit, India & China should consider strategies, to work together. Such cooperation will not only bring the investment but also the technology which China has used while developing its infrastructure.

Mr. Mohd. Saqib, Secretary General, ICEC Council, expressed that there were hiccups in getting the government to completely take on the responsibility of building roads and improving infrastructure and we had to work on the PPP model. He was very forthcoming and invited China to join hands with India and form an 'India-China Infrastructure fund' that would function as a guarantor for both the countries to trade in finance and technology enabling the growth of modern infrastructure in India.

Mr. MA Delun, Deputy Governor of the People's Bank of China, outlined the key areas of bilateral cooperation between India & China. SME Finance, Rural Banking & Infrastructure finance are the areas where the two countries can mutually benefit, he added.

Mr. P. S. Deodhar, President, ICEC Council, in his concluding remarks, highlighted the cultural similarities in India & China and placed high importance of continued dialogue between the two countries.

Mr. Dinesh Rai, Secretary, MSME, highlighted the role of entrepreneurs in pioneering the economic growth of the country. He stressed that the growth of the SME sector was very crucial since it provides a large employment base and were the roadmap for the future. There are several issues that SME’s faced which needed to be tackled and he identified them as – labour issues; quality; taxation and exim policy.

Chinese delegates expressed their appreciation at the growing trade and socio-cultural ties between India & China and shared that they expected India-China trade to grow to US$60 billion by 2010 (it has already surpassed US$51.8 billion in 2008).

Mr. Anil Bhardwaj, Secretary General, FISME, said that China has earned considerable experience in SME stock exchange. Innovative financial strategies have helped China to infuse equity in SMEs. In view of SEBI’s recent decision to allow SME stock exchange in India, the need of bilateral cooperation can be easily understood.

While both countries maintained that the financial crisis last year had a limited impact on their economies because of their prudential banking regulations, distance from the severely affected western markets and culture of saving they also agreed that post the financial crisis, regulations that balance innovation and risks needed implementation.

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

12

Five Predictions for the Chinese Economy in 2010

1

-Yiping Huang 2

A

s the year 2009 fades into the distance in the rear view mirror, the Chinese economy has entered into unknown territory in 2010. Investors are universally far more upbeat than one year ago.

Policymakers talk busily about adjusting economic structure as the new top policy priority, seeing no risk in achieving above 8 per cent growth.

For some, China's ability to achieve strong growth amid global recession was the biggest surprise of 2009. To me, it was not. The Chinese government's abilities in mobilising resources have strengthened, not weakened, significantly during the past decade. If the government really believed that 8 per cent growth was critical, then that would happen.

But I also had my share of surprises in 2009. The first surprise was the stable job market. I predicted that labour market conditions would deteriorate sharply, as job creation from the capital-intensive infrastructure projects would not be sufficient to compensate for the job losses in the labour-intensive export sector. But job markets remained stable during the economic downturn. The country even experienced widespread shortage of migrant workers. It turned out that construction of capitalintensive projects is actually very labour intensive.

The second surprise was the resilient private sector. As the economy became more dependent on state-dominant investment, it was natural to expect the private sector, mostly small and medium enterprises (SMEs), to decline.

But, in fact, SMEs continued to grow much faster than state industry throughout the economic downturn. At least three factors contributed to SMEs' outperforming the stateowned economy: they had advantage of more flexibility in response to the crisis; they benefited indirectly from contracts associated with the stimulus measures; and there were new policy initiatives ensuring that SMEs got finance through the banking system.

And, finally, the third surprise was rapid rise of asset prices.

I expected GDP growth to be strong but microeconomic conditions to deteriorate, with negative implications for the asset market. Asset prices, especially housing prices, started to surge from the second quarter. The turnaround of the asset markets was probably driven by bottoming out of the Chinese economy. But the abnormal liquidity conditions also played an indispensible role in building-up of the asset bubbles.

So how will the Chinese economy look in 2010?

The truth is nobody knows. But available information does suggest that the global economy will likely do much better in 2010 than in 2009. The U.S., E.U. and Japan all climbed out of recession during the third quarter of 2009. The global economy will probably achieve 3 per cent growth in 2010.

While prices may move upward, inflation is not likely to be a major macroeconomic risk any time soon. The central banks can take time before tightening the policies.

In the spirit of the upcoming "Year of Tiger", I offer here five predictions about likely macroeconomic trends in China in 2010. I am almost certain that many of these predictions will turn out to be false. What is important is not the conclusions, but the reasoning behind these conclusions.

Prediction 1: The renminbi will probably begin to appreciate against the dollar.

Some economists worry about inflation risks given extraordinary credit growth in 2009. But in the near term inflation is likely to be capped by the overcapacity problem.

As the economy recovers and prices move upward, the central bank will start to tighten monetary policies, most likely around the middle of the year.

The soft peg of the renminbi against the dollar in the wake of global crisis was unfortunate. But policymakers remain committed to greater flexibility of the exchange rate and are likely to return to a managed float regime with reference to a basket of currencies during 2010. This should set a new path of steady and gradual appreciation of the renminbi in many of the years to come.

Prediction 2: Job market pressures may rise again even as the economy recovers.

Construction of infrastructure projects has absorbed the vast labour force released by the export sector. But these jobs are not permanent. Once construction works are completed, migrant workers will have to find new jobs again. And stable jobs can be created only when domestic demand other than state investment picks up. This could point to a brief period of recovery of economic growth and accompanied by a weakening of labour markets.

1 The article appeared in East Asia Forum on 10/01/2010. See http://www.eastasiaforum.org/2010/01/10/five-predictions-for-the-chinese-economy-in2010/ 2 Yiping Huang is professor in the Chinese Center for Economic Research at Peking University and in the China Economy Program at the Australian National University (ANU)

13

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

Prediction 3: Housing prices will probably begin to weaken.

Factors that could influence housing markets in 2010 are mixed. For instance, higher personal incomes and corporate profits could support further increases in housing prices. But overall tightening of monetary policies, particularly slower growth of bank loans and hikes in policy rates, could add to pressures on the housing market.

A prediction of weakening housing prices, however, is based on two main factors. First, the market already shows important signs of a bubble, whether judging from the income/housing price ratio or looking at the rental/price ratio. Second, policy makers already worry about consequences of asset bubbles, given the fresh lessons from the U.S. The authorities recently removed all preferential treatment for housing investment and will likely take more actions in the coming year.

Prediction 4: Structural imbalances are likely to worsen.

Almost all policymakers, from the Premier down, are talking about adjustment of economic structure in order to improve quality of growth. This is very positive. But the measures being considered, such as better credit allocation, remain administrative in nature. In fact the government has been doing the same for at least seven years. But the imbalance problems continued to worsen. I don't see any difference this time round.

So, for instance, when the global economy recovers, the government may reduce spending on infrastructure, which would eventually lower investment share of GDP. But at the same time, export growth may recover. This could mean a rebound of the current account surplus.

The root cause of the structural imbalance is distorted incentive structures, especially depressed factor costs. Until

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

more decisive steps are taken to liberalise factor markets, adjusting economic structure could remain on the top of policy agenda every year for a very long time.

Prediction 5: The government will likely introduce another stimulus package Although most analysts expect China's GDP growth to be at 9-10 per cent in 2010, it is unclear whether strong growth can sustain itself without the helping hand of the government. The ideal scenario is that when the RMB 4 trillion spending runs out, either exports or consumption or private investment or a combination of these would be strong enough to carry forward the growth.

But it is not clear that this will happen in the near term.

Exports should recover but they are unlikely to return to the levels achieved before the crisis. The growth potential of the global economy has shifted lower and rising saving ratios further limits potential for China’s export growth.

Consumption has been resilient, partly as a result of the stimulus measures. Without strong income growth, the consumption momentum could weaken. Private investment remains weak outside the housing sector.

By mid-2010, the government may be forced to consider further measures supporting growth. Clearly, any new measures will likely be more oriented toward social infrastructure.

Overall, I see a partial return of the pre-2008 growth model, which, according to Premier Wen Jiabao is not balanced, is inefficient and thus unsustainable. The government has been talking about improving quality and sustainability of growth but so far it has achieved little in that regard.

Perhaps 2011 will be a more critical year for China’s longterm growth outlook.

14

NEWS BRIEFS China is the World's Top Exporter of Goods, in 2009 The Wall Street Journal reported on Jan 6, 2010, that China is likely to export more goods than Germany in 2009. China took over the mantle of the world's top merchandise exporter from Germany in 2009, according to the latest figures, aided by a global economic crisis that has taken a greater toll on other trading powers. China exported $957 billion of goods in the first 10 months of 2009, compared with $917 billion for Germany, according to customs data compiled by Global Trade Information Services, a Geneva-based firm. No changes in November or December are expected to overturn the Chinese lead, trade experts say. China is likely to publish trade figures for the full year next week.

China and India in the Decade Ahead As 2009 came to a close, and the new year dawned, two prominent Indian economists and columnists picked up their crystal balls, and looked at the decade ahead. Among other things, both of them compared the future economic trajectories of both China and India. Sawminathan Aiyar makes eight predictions in his article "India to overtake China in 2020" in Times of India, on Jan 1, 2010. The first prediction compared China and India. India will overtake China as the fastest-growing economy in the world. China will start ageing and suffering from a declining workforce, and will be forced to revalue its currency. So its growth will decelerate, just as Japan decelerated in the 1990s after looking unstoppable in the 1980s. Having become the world's second-biggest economy, China's export-oriented model will erode sharply - the world will no longer be able to absorb its exports at the earlier pace. Meanwhile, India will gain demographically with a growing workforce that is more literate than ever before. The poorer Indian states will start catching up with the richer ones. This will take India's GDP growth to 10% by 2020, while China's growth will dip to 7-8%. In a more ominous vein, Mr Aiyar foresees the possibility of a water war between China and India. China, alarmed at India's rise, will raise tensions along the Himalayan border. China will threaten to divert the waters of the Brahmaputra from Tibet to water-scarce northern China. India will threaten to bomb any such project. The issue will go to the Security Council.

UPDATES ON LAWS IN INDIA & CHINA New Laws and Regulations in China for 2010 China's laws and regulations can often be confusing. Here are a few new ones that will take effect beginning in the 2010 New Year. l Immigrant workers in Guangdong province with stable incomes and permanent lodging and who have paid social

insurance for at least seven years are allowed to apply for a permanent residence permit if have a clean criminal record. l Starting January 1, 2010, China will raise the pension by 10 percent from the 2009 level, or 120 yuan ($17.57) a month per

person. In addition, migrant and urban workers would be able to transfer their pension accounts when they find new jobs in other provinces. l There are several small changes to laws regulating security guards. If one dies on duty, they will be honored with the official

title of martyr, usually reserved for those the government says have died for justice. Second, security guards are banned from performing body searches or using violence. l Mobile phone users will be charged less next year. Previously, when making a long distance call, they were charged both

local and long distance fees. Beginning in the new year, the local fees will not be charged for long distance calls.

15

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

TBT and SPS Notifications by India and China (November 2009 - January 2010) SPS/TBT Notification Number

Date

Products Affected

Details

G/SPS/N/CHN/128

25 November 2009

Modified Milk

This standard applies to the production, circulation, supervision and management of modified milk. It specifies the terms and definitions, technical requirements, food additives and nutrition fortifier, as well as the requirements of production process, packaging, labelling, storage, transportation and testing method for modified milk.

G/SPS/N/CHN/163

24 November 2009

Foods for infants and young children, raw milk and dairy products

This standard applies to determination of free biotin content in food intended for infants and dairy products. It specifies the testing methods for determination of free biotin content in foods for infants and young children, raw milk and dairy products.

G/SPS/N/CHN/201

8 January 2010

Food Additive

It regulates administrative licensing work for new varieties of food additive.

G/SPS/N/CHN/202

8 January 2010

Food Disinfectant Materials (Components)

It sets a list of the food disinfectant materials (components) which is currently allowed to use.

G/SPS/N/CHN/203

19 January 2010 Dairy Products

The purpose of the notified regulation is to unified regulate the management of import of dairy products, and ensure the quality and safety of import of dairy products.

G/SPS/N/IND/63

19 January 2010 Plants and plant materials and other regulated articles as per Plant Quarantine (Regulation of import into India) Order, 2003 and its Amendments

This notification will make possible imports of plants and plant materials into India, which were, hitherto, not permitted to be imported into India.

G/SPS/N/IND/64

19 January 2010 Plants and plant materials and other regulated articles as per Plant Quarantine (Regulation of import into India) Order, 2003 and its Amendments

This notification will make possible imports of plants and plant materials into India, through Karaikal Port, Puducherry and Pipavav Port, Gujarat.

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

16

Exhibitions in India and China (February 2010 - April 2010) INDIA S. No. Exhibition

17

Date

Place

Products / Sectors Covered

1.

Automotive Testing Expo India

Feb 02 - 04, 2010 Hyderabad International Trade Exposition Centre (HITEX), Hyderabad

Automotive Industry

2.

IndiaMART HITEX International Machine Tool Expo

Feb 02 - 04, 2010 Hyderabad International Trade Exposition Centre (HITEX), Hyderabad

Hardware, Instrumentation and Control and Other Hardware Tools & Equipment.

3.

Global Meet on Green Revolution II

Feb 08 - 09, 2010 The Lalit Hotel, New Delhi

Food & Agriculture Sector

4.

International Granites & Stone Fair

Feb 04 - 17, 2010 Bangalore International Exhibition Centre (BIEC), Bengaluru

Natural Stone Industry

5.

India International Build Expo Coimbatore

Feb 12 - 14, 2010 Vijaya Fair Grounds, Coimbatore, Tamil Nadu

Construction Industry

6.

Education Next

Feb 12 - 14, 2010 The Great India Place, Noida

Education Industry

7.

Udyog World Expo

Feb 12 - 14, 2010 Goa Expo Centre, Goa

Trade Fair for SME and B2B Sector

8.

India International Mega Trade Fair-Kolkata

Feb 12 - 22, 2010 Science City, Kolkata, West Bengal

Largest and Most Popular Retail Exhibition in Eastern India

9.

International Conference & Exposition on Water Management & Waste Water Technologies

Feb 17 - 18, 2010 India Habitat Centre, New Delhi

Water Management & Waste Water Technologies

10.

Green Building Convention

Feb 18 - 20, 2010 Auto Cluster Exhibition Centre, Pune, Maharashtra

Sustainable Development & Eco-Friendly Construction Sector

11.

Vision Rajasthan

Feb 19 - 21, 2010 Birla Auditorium, Jaipur, Rajasthan

IT, Electronics, Health Care, TT & Communications, Power, Energy, Infrastructure, Agriculture, Hand loom, Real Estate, Automobile, Consumer Electronics, Science & Technology, Research & Development.

12.

Indian Handicrafts & Gifts Fair

Feb 20 - 23, 2010 India Expo Centre & Mart Ltd, Greater Noida

Handicrafts Industry

13.

Electronics Next

Feb 24 - 26, 2010 Pragati Maidan, New Delhi

EMS, Electronic Components, Materials & Production Equipment

14.

Tex Styles India

Feb 24 - 27, 2010 Pragati Maidan, New Delhi

Textile Industry

15.

Zak Wind Power India

Feb 26 - 28, 2010 Chennai Trade & Convention Centre, Chennai, Tamil Nadu

Wind Power Sector

16.

India ETC Expo

March 02 - 04, 2010

The Karnavati Club, Ahmedabad, Gujarat

Construction Sector

17.

PV + Solar India Expo

March 04 - 06, 2010

Mumbai World Trade Centre, Mumbai, Maharashtra

Solar Industry

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

S. No.

Exhibition

Date

Place

Products / Sectors Covered

18.

Bangalore International Automotive Expo

March 11 - 15, 2010

Palace Grounds, Bengaluru, Karnataka

Auto Industry

19.

Industrial Expo Manesar

March 12 - 15, 2010

TBA, Manesar Village, Haryana

Industrial Equipments

20.

World Renewable Energy Technology Congress & Expo

March 18 - 20, 2010

Hotel Le Meridien, New Delhi

Energy Security And Sustainable Development Sector

21.

IT India Fair

March 26 - 29, 2010

Pragati Maidan, New Delhi

IT & ITES Industry

22.

Aerodrome India

April 08 - 10, 2010

Bombay Exhibition Centre (BEC), Mumbai, Maharashtra

Manufacturers Of Hardware, Consultants And Service Providers Related To Airport Infrastructure, Security And Aircraft Maintenance

23.

Arogya Kolkata

April 09 - 12, 2010

Science City, Kolkata, West Bengal

Ayurveda, Unani, Allopathic and Homeopathic Medicines Manufacturers

24.

Bulk Pack

April 09 - 12, 2010

Hyderabad International Trade Exposition Centre (HITEX), Hyderabad

Packaging Industry

25.

Chem ProTech India

April 15 - 16, 2010

Bombay Exhibition Centre (BEC), Mumbai

Chemical Industry

CHINA S. No. Exhibition

Date

Place

Products / Sectors Covered

1.

East China Fair

March 01 - 05, 2010

Shanghai New International Expo Centre (SNIEC), Shanghai

Garments, Home Textiles, Art Deco Gifts and Consumer Goods.

2.

Led China

March 02 - 05, 2010

China Import & Export Fair Pazhou Complex, Guangzhou, Guangdong

LED Industry

3.

Ningbo International Sourcing Expo

March 03 - 06, 2010

Ningbo International Conference Exhibition Center, Ningbo, Zhejiang

Household Equipment

4.

Guangzhou International March 04 - 06, Automotive Air-conditioning & 2010 Cold Chain Technology Exhibition China

China Import & Export Fair Pazhou Complex, Guangzhou, Guangdong

Air-conditioning system for whole vehicles, Refrigeration equipments

5.

Hotelex Chengdu

March 05 - 07, 2010

Chengdu New International Convention & Exposition Center, Chengdu, Sichuan

Hotels, Restaurants & Catering

6.

Asia Expo Shanghai

March 06, 2010

TBA, Shanghai

Education and Training Industry

7.

Interhometex Shenzhen Hometex Fair

March 07 - 10, 2010

Shenzhen Convention & Exhibition Center, Shenzhen, Guangdong

Home Furnishing Products

8.

Sino Pack

March 09 - 11, 2010

China Import and Export Fair Pazhou Complex, Guangzhou

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

Packaging and Processing Industry

18

S. No.

19

Exhibition

Date

Place

Products / Sectors Covered

9.

International Exhibition on Furniture Accessories Materials & Wood Products

March 10 - 13, 2010

China International Exhibition Center (CIEC), Beijing

Furniture Accessories, Materials & Wood Products

10.

China International Auto Accessories Commercial Expo

March 12 - 14, 2010

National Agricultural Exhibition Center (NAEC), Beijing

Automobile industry

11.

China International New Energy Sources & Energy Conservation & Environmental Protection Exhibition

March 16 - 18, 2010

China International Exhibition Center (CIEC), Beijing

Energy Conservation & Environmental Protection Sector

12.

China Supply Chain & Logistics Showcase

March 18 - 19, 2010

TBA, Shanghai

Supply Chain & Logistics

13.

Hometextile China

March 18 - 21, 2010

Chinese Export Commodities Fairground, Guangzhou, Guangdong

Home Textile Industry

14.

China Sustainable Building Forum & Expo

March 23 - 25, 2010

Shanghai New International Expo Centre (SNIEC), Shanghai

Construction Industry

15.

Concrete China 2010

March 31 Apr 02, 2010

China National Convention Center, Beijing

Concrete Industry

16.

China Refrigeration & Frozen Food Processing & Packaging

April 07 – 09, 2010

New China International Exhibition Center, Beijing

Food Processing Services Industry

17.

Green Fuels & Vehicles China

April 08 - 09, 2010

Shanghai New International Expo Centre (SNIEC), Shanghai

Alternative Fuels & Vehicles & Green Conventional Auto Industries

18.

China Electronics Fair

April 09 - 11, 2010

Shenzhen Convention & Exhibition Center, Shenzhen, Guangdong

Electronics Industry

19.

China Build

April 09 - 12, 2010

Dalian Star-Sea Convention & Exhibition Center, Dalian, Liaoning

Construction Industry

20.

International Sourcing ExpoHardware & Machinery Show

April 14 - 18, 2010

Guangzhou International Sourcing Cente, Guangzhou, Guangdong

Building & Machinery Hardware Industry

21.

China Import & Export Fair (Canton Fair)

April 15 - 19, 2010

China Import & Export Fair Pazhou Complex, Guangzhou, Guangdong

China's Largest Trade fair which includes Machinery and Electronics, Medicines & Health Products, Household Goods, Industrial Products, Consumer Goods, Gifts, International Pavilion

22.

China Franchise Expo

April 16 - 18, 2010

China World Trade Center (CWTC), Beijing

Franchisee & Business Opportunity Companies

23.

International Component Manufacturing & Design Show

April 18 - 21, 2010

Shenzhen Convention & Exhibition Center, Shenzhen, Guangdong

Component Manufacturing & Design Industry

24.

China International Medical Equipment Fair

April 18 - 21, 2010

Shenzhen Convention & Exhibition Center, Shenzhen, Guangdong

Pharmaceutical Industry

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

S. No.

Exhibition

Date

Place

25.

China International Industry Fair Chongqing

April 20 - 22, 2010

Chongqing International Industry Equipment Sector Convention & Exhibition Center, Chongqing

26.

Beijing International Automotive Exhibition

April 23 May 02, 2010

Beijing China International Exhibition Center (CIEC), Beijing

Automotive Parts & Components

27.

China Shenzhen International Gifts Handicrafts Watches & Houseware Fair

April 25 - 28, 2010

Shenzhen Convention & Exhibition Center, Shenzhen, Guangdong

Handicrafts, Gifts, Watches and House Ware Industry

28.

Shanghai Environmental Protection Exhibition - EPTEE

April 27 - 29, 2010

Intex Shanghai, Shanghai

Environment Management and Waste Management, Air Pollution Control, Clean Energy, Cleaning Management

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

Products / Sectors Covered

20

Economic Indicators

21

Indicator

India

China

GDP

US$ 1242000 Million (2009)

US$ 4910000 Million (2009)

GDP Growth Rate

6.7% (2008-2009)

8.7% (2008-2009)

Exports

US $14606 Million (December 2009) (9.3% higher in dollar terms than exports during December, 2008)

US$ 1200000 Million (2009) (Down 16% from 2008)

Imports

US $ 24753 Million (December 2009) (27% higher in dollar terms than imports during December, 2008)

US $ 1010000 Million (2009) (Down 11.2% from 2008)

Trade Balance (April-December 2009)

US $ -76242 Million

US$ 18430 Million

Foreign Exchange Reserves

US$ 280,955 Million (As on January 29, 2010)

US$ 2132000 Million (As on December 2009)

Foreign Direct Investment (FDI)

US$ 25,556 Million (Jan-Dec 2009)

US$ 90030 Million (2009)

Number of Telephone Subscribers

562.21 Million (December 2009)

720.552 Million (December 2009)

INDIA-CHINA CHRONICLE Nov - Dec '09 - www.icec-council.org

INDIA CHINA ECONOMIC AND CULTURAL COUNCIL K-19 (GF), South Extension Part-II, New Delhi - 110 049.

Tel. : +91-11-46550348

MEMBERSHIP FORM Name of Company :

.............................................................................................................

Address

.............................................................................................................

:

.............................................................................................................

Tel.

:

......................................................... Fax : ........................................

Email

:

.............................................................................................................

Company Website

:

.........................................................

Main Product / Service

:

.............................................................................................................

Annual Turnover

:

.........................................................

Principal Representative

:

......................................................... Position : .................................

Mobile No.

:

............................................ Email : ..................................................

Primary Reason for Membership

:

.............................................................................................................

Membership Category

:

......................................................... Annual / Life : ..........................

Entrance Fee Rs.

:

.................. Annual Subscription Rs ................... Total Rs. ...............

Cheque / DD No.

:

............................ Date : ............................ Rs. : ............................

Name of Bank

:

.............................................................................................................

Authorised Sign.

:

Name : ............................................... Signature : ..............................

Position : ............................................ Date : ......................................

FOR OFFICE USE ONLY Duration Membership No. : ..........................................

From

To

ICEC

COUNCIL

GUIDELINES FOR FILLING UP THE MEMBERSHIP FORM Schedule A and B given below show membership category and subscription

SCHEDULE A Sl. No.

Category

Subscription (Rs.)

1.

Chief Patron

25,00,000 and more

2.

Patrons

5,00,000 and more

3.

Donors

1,00,000 and more

SCHEDULE B Sl. No.

Category

One Time Annual Entrance Subscription Fee (Rs.) (Rs.)

Total (Rs.)

1.

Corporate (Less than Rs. 20 Cr.)

3,000

10,000

13,000

2.

Corporate (Less than Rs. 100 Cr.)

6,000

20,000

26,000

3.

Corporate (More than Rs. 100 Cr.)

10,000

30,000

40,000

4.

Professional / Personal

2,000

5,000

7,000

5.

Chambers / Associations

6,000

20,000

26,000

Notes : 1. Old members are exempted from payment of entrance fees.

2. To download membership form online kindly visit our website www.icec-council.org 3. Membership form after filling requested information in full along with the Cheque / DD of entrance fee and subscription as specified in the schedule drawn in favour of India China Economic and Cultural Council payable at Delhi / New Delhi may be sent by Registered post or through a Courier Services to:

Membership Panel ICEC Council K-19 (GF), South Extension Part-II, New Delhi - 110 049.

Tel. : +91-11-46550348 Email : response@icec-council.org

MUTU FASHION inherits two generations of manufacturing experience in T-shirts since 1959. MUTU FASHION, was established in 2005 to manufacture 100% cotton T-Shirts with a speciality in Polo T-shirts. We cater to all categories, Men, Women, Boys and Girls. We aim at producing Polo T-Shirts by employing the latest technical advancement and innovative techniques available today. At Mutu Fashion, we strive for exceptional quality, durability, and comfort.

HEAD OFFICE Yuvraj Complex, Mannarai, Tirupur 641607. India.

Tel : +91-421-2221961 / 2782 Fax : +91-421-2221953 Email : sylvanm@gmail.com POLO FACTORY MUTU FASHION SF 430, 431, Kiluvankadu, Kaniyur Post, Avinashi Road, Coimbatore. India.

Tel : +91-421-2911166 Fax : +91-421-2333773

PROCESSING FACTORY FASHION PROCESS MILL Yuvraj Complex, Mannarai, Tirupur 641607. India.

Tel : +91-421-2221961 Fax : +91-421-2221953

GLOBAL OFFICE 18721, Saticoy St., Reseda, CA 91335-2750, USA. Email : krishkris@hotmail.com

www.mutu fashion.com

ICEC

COUNCIL

India China Economic & Cultural Council NEW DELHI OFFICE Mr. Irfan Alam K-19 (GF), South Extension Part-II, New Delhi - 110 049. India.

Tel. : 011-46550348 Email : irfan@icec-council.org SHENZHEN OFFICE Ms Chunmei Rao 304, 3/F Chinese Overseas Scholars Venture Building, South District, Hi-tech Industry Park,Shenzhen 518057 China Tel. : 86-755-86329778 Mobile : 86-13421398727 Email : amyrao@icec-council.org BEIJING OFFICE Ms. Furong Tian 15A, Gold Island Orchid Court Apartments, No. 1 Xibahe South Rd, Chaoyang District, Beijing P.R.C Tel. : 010-64402602 / 2242 / 3813 Fax : 010-64403340 Email : icec@india-china.com

www.icec-council.org