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IT exports face Indian blocks

By Cong Mu Source:Global Times Published: 2012-8-30 1:30:03

China should better understand "economic nationalism" as displayed by a recent proposal by the Indian Department of Telecommunication (DOT) to restrict Chinese telecom imports, and instead increase mutual trust with India in the areas of trade and politics, experts said Wednesday.

A report presented to telecom minister Kapil Sibal on August 16 "suggested that India restrict Chinese presence only to telecom manufacturing while keeping strategic areas such as infrastructure and broadband networks for non-controversial countries like the US, Japan, South Korea, Australia, Sweden and Finland," the Indian Express reported on Tuesday.

"The DOT outlook could jeopardize future Chinese sales of third-generation wireless broadband networks while continuing to allow imports of cellphones, and computer hardware like laptops and accessories such as USB dongles," the news report said.

"There have long been Indian proposals to ban imports of Chinese telecom equipment. Imports from Huawei Technologies were restricted at one point, but this was relaxed later," Sun Shihai, an expert on Indian issues at the Institute of Asia Pacific Studies at the Chinese Academy of Social Sciences told the Global Times on Wednesday.

Huawei and ZTE, two major Chinese telecommunication equipment exporters to India, were not immediately available for comment when reached by the Global Times on Wednesday.

"India has very deep suspicions about China," Sun said, noting that it is inevitable that India would complain at a time when its national economy is booming, but it constantly records a huge trade deficit with China, one of its largest trading partners.

According to the Chinese Ministry of Commerce (MOFCOM), the bilateral trade volume between China and India in 2011 was $73.9 billion, up 20 percent year-on-year.

Meanwhile, China obviously had the better part from the trade relationship, recording a $39.7 billion trade surplus with India in the 2011/12 fiscal year, Reuters reported on Monday. In comparison, the trade gap was only $1 billion in the 2001/02 fiscal year, it said.

Despite the need for more infrastructure, India has banned Chinese firms from constructing ports and airports in the country, Sun said.

"India appears to have been wary about the influx of foreign goods," Wei Zhong, a professor with the Institute of Economics at the Chinese Academy of Social Sciences, told the Global Times. "But overall, trade between the two countries has been increasing."

During the meeting between the two countries' commerce ministers in New Delhi on Monday, the leaders affirmed their target of increasing the bilateral trade volume to $100 billion by 2015, according to a MOFCOM statement.

Chinese commerce minister Chen Deming told his Indian counterpart Anand Sharma during the meeting that China is seeking more imports from India, and hoped that Indian companies would avail themselves of trade exhibitions that would allow them to explore the Chinese market, the statement said.

Manufactured products made by Indian companies are similar to Chinese products, so the demand for them in China is not particularly strong, Sun said, hastening to add that there are some products that Indian manufacturers are better at making, such as certain automobile parts.

China should diversify the goods it purchases from India and understand the country better through improved communication, in order to avoid trade wars, Sun suggested.

The countries will soon set up a joint working group to address trade issues including protectionism, India's The Economic Times reported on Monday.

At a time of global economic uncertainty, it is vital that China and India strengthen cooperation, Chen said.

ZTE's operating profit in the first half of 2012 plunged by 226 percent year-on-year and swung to a loss of 863 million yuan ($135.8 million), the company's financial statement on August 22 showed.

"The company will focus on countries with huge populations and mainstream global telecom operators, solidify market share in emerging markets, and deepen cooperation with mainstream users of different products and earn their recognition," the company said.

The total IT market in India is expected to grow by 16.3 percent year-on-year to $43.6 billion in 2012, International Data Corp predicted in July.

Bai Tiantian contributed to this story

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