{"id":35446,"date":"2018-10-31T17:37:41","date_gmt":"2018-10-31T12:07:41","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=35446"},"modified":"2018-10-31T17:37:41","modified_gmt":"2018-10-31T12:07:41","slug":"dont-fear-trade-deficit-china-agrees-to-tackle-trade-imbalance","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/dont-fear-trade-deficit-china-agrees-to-tackle-trade-imbalance\/","title":{"rendered":"Don\u2019t fear trade deficit:\u00a0 &#038; China agrees to tackle trade imbalance:"},"content":{"rendered":"<p><a href=\"http:\/\/www.thehindu.com\/todays-paper\/tp-opinion\/dont-fear-trade-deficit\/article19556495.ece\"><span style=\"font-weight: 400;\">Don\u2019t fear trade deficit<\/span><\/a><span style=\"font-weight: 400;\">:\u00a0 &amp; <\/span><a href=\"http:\/\/www.thehindu.com\/todays-paper\/tp-business\/china-agrees-to-tackle-trade-imbalance\/article19556462.ece\"><span style=\"font-weight: 400;\">China agrees to tackle trade imbalance<\/span><\/a><span style=\"font-weight: 400;\">:<\/span><\/p>\n<p><b>Context<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">India\u2019s trade deficit with China, which stands at over $50 billion, has been projected by many on the Indian side as an economic evil that needs to be curbed by all means.<\/span><\/li>\n<\/ul>\n<p><b>Matter of Concern<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Amidst rising political tensions between India and China, trade relations between the two countries have come under some pressure recently.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">There has been demand of bans on heavy tariffs and Chinese imports.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The trade deficit with China, in effect, is seen as a loss to India and a gain to the Chinese economy.<\/span><\/li>\n<\/ul>\n<p><b>Balance of Trade<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">The balance of trade reflects how an economy earns its foreign exchange, and how it decides to spend it subsequently.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">In the case of India\u2019s trade deficit with China, India earns Chinese yuans primarily from Chinese investors who seek to invest in assets in the country.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Successively, India uses these yuans that it receives from Chinese investors mostly to purchase Chinese goods, rather than to invest them in Chinese assets.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">This fondness among Indians for Chinese goods rather than assets, combined with Chinese preference for Indian assets rather than goods, causes India to suffer a trade deficit.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Ideal situation would have been when Indians had a greater preference for Chinese assets, and the Chinese had a greater preference for Indian goods.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The situation would then reverse and India would enjoy a trade surplus instead.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The trade deficit is thus a mirror image of a capital surplus, which is formed by the relatively larger inflow of Chinese capital into India than vice versa.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">It is high time irrational fears over trade with China, or any other country, are put to rest once and for all.<\/span><\/li>\n<\/ul>\n<p><b>China will be sending team to India<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">China has agreed to send a high-level official team led by Commerce Minister Zhong Shan by December-end to address the issue of growing trade imbalance with India.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The development could be termed a breakthrough for India which faces a ballooning goods trade deficit with its neighbour.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">China is keen to ensure that trade with India is not adversely affected by the prevailing military tension.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">In case of a full-fledged \u2018trade war,\u2019 China will have much to lose with its goods exports to India in 2016-17 valued at a whopping $61.3 billion against India\u2019s shipments worth just $10.2 billion to that country.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The trade deficit was $52.7 billion in 2015-16.<\/span><\/li>\n<\/ul>\n<p><b>Addressing India\u2019s concern<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Beijing had decided to address India\u2019s concerns regarding China\u2019s \u2018Sanitary and Phytosanitary measures\u2019 hurting Indian farm products exports to that country.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Chinese authorities have also decided to look into India\u2019s request to remove the \u2018curbs\u2019 on Indian pharmaceutical companies\/products, especially those having the approval of American, European and Japanese regulators.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Beijing would also soon take a call on eliminating the difficulties faced by the Indian IT\/business process management sector in getting greater market access in China.<\/span><\/li>\n<\/ul>\n<p><b>Anti \u2013 Dumping duty<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Anti-dumping duty is in power on 93 products concerning imports from China, covering products in broad groups of chemicals and petrochemicals, products of steel and other metals, fibres and yarn, machinery items, rubber or plastic products, electric and electronic items and consumer goods.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">\u201cIn addition, 40 cases concerning imports from China have been initiated by Directorate General of Anti-Dumping and Allied Duties.\u201d<\/span><\/li>\n<li><span style=\"font-weight: 400;\">On August 22, Indian Embassy in Beijing said the decision to impose anti-dumping duties on the 93 products were taken over a course of previous five years.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Don\u2019t fear trade deficit:\u00a0 &amp; China agrees to tackle trade imbalance: Context India\u2019s trade deficit with China, which stands at over $50 billion, has been projected by many on the Indian side as an economic evil that needs to be curbed by all means. Matter of Concern Amidst rising political tensions between India and China,&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/dont-fear-trade-deficit-china-agrees-to-tackle-trade-imbalance\/\">Continue reading <span class=\"screen-reader-text\">Don\u2019t fear trade deficit:\u00a0 &#038; China agrees to tackle trade imbalance:<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-35446","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704429671},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/35446","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=35446"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/35446\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=35446"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=35446"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=35446"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}