Premier Wen’s visit to Delhi is more a symbolic visit rather than one to fire up trade ties between the two neighbors. Marking 60 years of diplomatic ties, 60 representing the completion of a full circle in China, the Premiers visit is seen to reignite trade, diplomatic and cultural ties. China is eager to re-embrace India, albeit on a higher plane, one which involves greater people to people contact, dispelling ignorance based on our misconceptions and forging a stronger alliance between the century old neighbors.
While 50 deals worth US$20 billion will be concluded during his visit, in an attempt to dispel India’s US$20 billion trade imbalance with China, the actual effect of his trip will be witnessed for a few years to come. Sweet and sour, Sino-India relations have taken years of cajoling, prodding and poking to move along, likewise the growth of bilateral ties between the two nations will be steered onto a stronger plane by Premier Wen’s visit, but expect no fireworks in the immediate future.
Already worked into China’s next five year plan, India has a big role to play in the growth of China. While the Middle Kingdom expects to play a big part in the power and infrastructure sector in India, China is willing to open restricted industries like pharmaceuticals to select countries including India.
Spurred on by trade ties, the two nations are also working towards resolving bilateral labour problems. Expect the visa issue on both sides of the border to be sorted out soon and tourism to flourish as an increased flight traffic takes its wings next year.
The only cautious note for Indian companies in Premier Wen’s visit should be sounded on the amount of loans taken from Chinese banks. Available at low interest rates, China is keen to lend to developing nations for them to pay Chinese companies for massive infrastructure projects. However analysts warn that increased borrowing from hungry to expand Indian firms could net them in huge liabilities with Chinese banks.