Same Wall, New Coating

The change of guard in China will not help Indian business

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NEW BOSS: Xi Jinping is the new leader of China’s Communist Party (AFP)

The new politburo, the policy-making body that runs China, was announced on 15 November. It should concern us. India’s trade deficit with China was nearly $40 billion in FY12 — over 40 per cent higher than it was in FY11. Re-balancing the trade equation is crucial to our financial health.

Trade talks launched during the visit of Chinese Premier Wen Jiabao in 2010 have not yielded any significant results.

India’s exports to China comprise mainly raw materials; copper and iron ore made up half of the exports — $19 billion — to China in FY12. In comparison, Chinese imports are more sophisticated: mobile phones and power plant equipment. China’s markets are closed for India companies engaged in our traditional exports such as software services and pharmaceuticals; several

(Bloomberg)

companies, including TCS and Ranbaxy, admit failure to significantly penetrate the Chinese market.

The new dispensation will be like the old, so breaching the Great Wall of China is not going to be any easier now.

STRICTLY BUSINESS
Indian demand for gold rose 9 per cent to 223.1 tonne in the July-September quarter. The World Gold Council has cited the revival of monsoon and re-stocking by traders before the festive and the wedding seasons for the spike.

(This story was published in Businessworld Issue Dated 26-11-2012)

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