Soon after concluding a meeting between Indian ambassador to China Nirupama Rao and China’s deputy commerce minister Zhong Shan, the Ministry of Commerce of China has expressed that trade probes by India would have a telling effect on bilateral trade. Since October, India is in the process of investigating a slew of Chinese goods, and has restricted imports of Chinese steel, textiles and petrochemicals. Moreover, both strained relations due to the ban imposed on the Chinese toys recently by India for six months which China is planning to approach the WTO for the annulment of the decision.
Besides, the Industry & Commerce Ministry of India has launched a probe last month into sodium nitrate on account of a complaint from an Indian manufacturer citing the Chinese sodium nitrate allegedly received countervailing subsidies from their government. While India began the subsidy probe, the Chinese commerce ministry spokesman, Yao Jian had warned that the probe not only hurt the legitimate rights and interests of Chinese business, but would serve as a road block to bilateral trade. The sodium nitrate is used for a wide range of application and primarily consumed by the pharma industry.
China is believed to be the worst affected nation in the global economic crisis due to slump in exports as they employed more people than any other country. According to latest reports, 20mn jobs have been wiped out from China during the last 8 months, and social unrest has become order of the day in several provinces including Hong Kong.
Apart from India, the Chinese goods are under increased pressure from other countries too, the US and the EU have imposed anti-dumping tariffs on the Chinese imports. Experts stated that though the Chinese government claimed that they had no plans of imposing ‘buy Chinese’ slogan but restrictions to their exports would force them to take drastic steps which would be detrimental to China as well as global trade.
The two-way trade between India and China in 2008 stood at about $52bn showing an increase of 34 percent from the previous year. India is regarded has the 10th largest trade partner to China.