CHINA REPORT : November 2005
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After five months of heated negotiations the US and China finally signed a deal in early November, resolving their bitter textile dispute. According to the deal, the US will place restrictions on exports of 34 clothing and textiles categories from China for the next three years. The 2006 growth rate for clothing exports has been set at 10 percent, 12.5 percent in 2007 and 15 percent in 2008. For textile products, the rates are 12.5 percent in 2006 and 2007 and 16 percent in 2008. After that, the USA’s right to restrict such imports will diminish. The US industry has also retained its right to use the safeguard mechanism if China ventures to flood the market in categories not covered under this agreement. During the tenure of the agreement, China can export just 3.2 percent more of the covered products to the US than if the safeguards were to be invoked on all the covered products for the three years. Analysts believe that the biggest beneficiary of the restrictions on Chinese exports will be India.
- US President George Bush paid a three day visit to China in mid-November, as part of a larger tour of East Asian countries. In meetings that were described by the American media as “polite but tense”, Chinese President Hu Jintao told President Bush that he was willing to move more quickly to ease economic differences with the United States, but gave no ground on increasing political freedoms. Some progress was made on economic issues that are of major concern to American businesses such as letting market forces set the value of the undervalued Chinese currency and protecting intellectual property from rampant piracy. President Hu made a public statement that he would "unswervingly press ahead" to ease a $200 billion annual trade surplus that China enjoys with the US. However he had set no schedule for further currency moves, which are politically unpopular in China because they would make Chinese goods less competitive abroad. Both sides also agreed to work together on areas of common interest such as denuclearization of the Korean Peninsula, co-operation in the war on terror as well as attempts to control bird flu.
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China's soaring exports pushed its trade surplus to a record 80.37 billion dollars in the first 10 months of the year. According to the China Customs Administration, exports from the January to October period in 2005 gained 31.1 percent to 614.49 billion dollars compared with the same period in 2004, while imports rose 16.7 percent to 534.12 billion dollars. Economists believe that, despite strengthening domestic demand, at the current pace of exports China's trade surplus will be around 100 billion dollars. China recorded a trade surplus of 32 billion dollars last year, which opened it to a barrage of US criticism that it keeps its currency undervalued to give it an unfair trade advantage.
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China's retail sales rose by 12.8 percent on-year to $71 billion in October, according to statistics released by the National Bureau of Statistics in November. Retail sales in urban areas during the period rose by 13.6 percent to $47.6 billion, whereas in rural areas they increased by 11.2 percent to touch $23.4 billion.
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US aerospace giant Boeing has signed a mega deal worth US$4 billion to supply 70 aircraft to eight Chinese airlines, one of the biggest purchases in China's civil aviation history. The signing coincided with visit by US President George W. Bush to Beijing. Insiders say the order will help increase Boeing's dominance over European rival Airbus in the world's fastest-growing major aviation market. The aircraft manufacturer will deliver the single-aisle 737-700 and 737-800 models to eight major Chinese airlines between 2006 and 2008, said Boeing China spokesman George Liu. The signing in Beijing is part of a broader deal to supply 150 737 aircraft, but the agreement on the other 80 planes will be after 2008 and has not yet been finalized
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The number of mobile phone subscribers in China reached a record 383 million at the end of October according to the Chinese Ministry of Information Industry. On average, China had 4.82 million new mobile phone subscribers a month in the first ten months of 2005.Although facing fierce competition from mobile communications, the number of fixed-line subscribers also rose by 36.8 million over the end of 2004, bringing the total of fixed line subscribers to 348 million at the end of October. China's mobile phone users first outnumbered its fixed-line phone subscribers in October 2003.
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Larsen and Toubro held a groundbreaking ceremony for their new factory in Wuxi New District of Jiangsu Province. The factory will begin manufacturing high-end air circuit breakers within the next eight months. L&T has already established a presence in China with the supply of high technology equipment for the hydrocarbon sector. The new factory will substantially ramp up Indian manufacturing investment in China, which till date remains small.
Activity in November 2005
A 12-member delegation of Young Indian visited Beijing, Shenzhen and Shanghai from 13th to 19th November 2005. The delegation was lead by Yi Vice-Chairman Mr Narayan Sethuramon.
Delegation from Anhui Province visited CII New Delhi on 6th November 2005.
Delegation from Yunnan Province visited CII New Delhi and Kolkata on 18th and 22nd November 2005 respectively.
Delegation from Shandong Province visited CII New Delhi on 30th November 2005.
CII AND CHINA
CII
has a long standing association with China. This has been possible
through CII’s institutional partners like China Council for Promotion
of International Trade (CCPIT), All China Federation of Industry
& Commerce (ACFIC), Ministry for Foreign Trade and Economic
Cooperation (MOFTEC), China Enterprise Management Association (CEMA)
and China International Contractors’ Association (CHINCA). Their
support has been very encouraging.
CII has been making consistent efforts
to promote Indian industry’s synergies with China. The CII Office
in Shanghai and Beijing serves as the nodal reference point for
Indian business community in China. Several of our members including
TATAs, Sundaram Fasteners, Ranbaxy, NIIT and others have already
established presence in China. Updated information on trade policy,
economic conditions, rules and regulations on doing business, incentives
for Joint Ventures etc are provided on a regular basis.
The CII China desk in India serves
to monitor and strengthen economic and bilateral trade relations
between the two countries; Broaden awareness and understanding in
China of the changing economic scenario in India and encourage Chinese
companies to look at India as an investment destination.
CII, in close cooperation with Embassy
of India, Beijing, has organised two “Made in India” Exhibitions
in Beijing in 2003 and 2004. The exhibitions served to increase
bilateral trade between India and China, to promote Joint Ventures
and Investment and cooperation between the two countries. Some of
India’s leading companies participated at the Made in India Shows
in Beijing.
CII greatly values its partnership
with CCPIT. Recently, CII organized the “India China Business Conclaves”
in New Delhi and Kolkatta in association with our government and
the CCPIT, to enhance trade and economic cooperation between our
countries.
The participation of China as a “partner
country” in the CII International Engineering and Technology Fair(IETF)
in 2003 was another example of CII’s strong partnership with China.
It is through such shows, fairs and
sectoral and regional missions that CII serves to develop business
to business contacts which are essential for cementing the burgeoning
economic relationship of our two countries.
CII
has fourteen MoU partners in China:
- China Council for Promotion of
International Trade (CCPIT)
- China Council for Promotion of
International Trade (CCPIT), Chengdu
- All China Federation of Industry
& Commerce (ACFIC)
- China Enterprise Management Association
(CEMA)
- Ministry of Foreign Trade &
Economic Cooperation (MOFTEC)
- China International Contractors’
Association (CHINCA)
- Hong Kong General Chamber of Commerce
(HKGCC)
- Shenyang Information Industry Bureau
- Shanghai Pudong Software Park
- Jiangsu Province and Sun-Wah Hi-Tech
Group, Hong Kong
- Nanjian City (Capital of Jiangsu
Province)
- CCPIT, Hubei Sub-Council
- CCPIT, Wuhan Sub-Council
- Shanghai Chemical Industry Association
There is momentum in business that
has been established and CII will continue to focus on already established
existing channels of communication into the next millennium to facilitate
greater cooperation between India and China.
sectors.
CII
has fourteen MoU partners in China:
- CII and ICRIER jointly organised
a meeting with the delegation from the Yunnan Province on the
9th March 1999.
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CII met the delegation from CCPIT
(China Council for the Promotion of International Trade) on
the 11th March 1999.
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Met the business team from CCPIT,
Guangzhou Sub-Council on 16 August 1999
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CII organised a meeting with
the Shanghai Municipal Economic Commission on 18 October 1999
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CII representative participated
in the Seminar on “India-China Trade and Investment Opportunities”
in Beijing on the 16 November 1999, organised jointly by the
Embassy of India in Beijing and the Ministry of Foreign Trade
and Economic Relations, China
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CII participated in the China
Business Summit, held in Shanghai and Beijing in April 1999,
organised by the World Economic Forum.
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CII organised a Seminar on “China
means business” in November 1999.
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CII met H E Mr Tang Jiaxuan,
Foreign Minister of China on 22 July 2000 during his visit to
India
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CII organised the China Commodity
Fair in December 2000 in cooperation with the Ministry for Foreign
Trade and Economic Cooperation
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CII organised the visit of H
E Mr Shao Qiwei, Vice Governor of the Yunnan Province of China
and the accompanying delegation to Delhi and Mumbai (4 – 9 December
2000)
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CII organised the visit of Mrs
Carrie Yau, Secretary, Information Technology & Broadcasting
Bureau, Hong Kong in January 2001 to Delhi, Hyderabad and Bangalore.
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CII organised the visit of Mr
Stephen Ip, Secretary for Financial Services, HKSAR in March
2001
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Met Mr Peter Woo, Chairman of
the Hong Kong Trade Development Council & the accompanying
business team in April 2001.
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CII organized a CEOs Delegation
to Hong Kong coinciding with the visit of Mr Yashwant Sinha,
Finance Minister to Hong Kong in May 2001.
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Met a 7-member delegation from
Jiangsu Province in November 2001.
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Met a 40-member delegation from
All China Federation of Industry & Commerce, China in December
2001
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Met a 9-member delegation from
the Shanghai WTO Affairs Consultation Centre, Shanghai in December
2001
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CII organised the visit of Mrs
Carrie Yau, Secretary, Information Technology & Broadcasting
Bureau, Hong Kong in January 2001 to Delhi, Hyderabad and Bangalore.
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CII organized the first ever
Joint Delegation of Members of Parliament, Trade Union Leaders
and Industry Delegation to China in July 2001 led by Mrs Najma
Heptullah, Chairperson, Rajya Sabha.
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CII organized a Business meeting
in honour of Mr Zhu Rongji, Premier of China, during his visit
to India in January 2002.
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CII met the Business Delegation
led by Mr Yu Xiasong, Chairman, CCPIT in January 2002
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CII organized a Leisure cum Business
Mission to China coinciding with the launch of the direct flight
between India and China in March 2002
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Buyer Seller meeting with Business
Delegation from Guangxi Province, China, May 2002
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CII President’s Visit to China
as an honoured guest at the the 50th anniversary celebrations
of China Council for the Promotion of International Trade (CCPIT),
May 2002
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Meeting with China Software System
and Method Delegation led by Mr Gao Sumei, Section Chief of
Economic Operation Department of the Ministry of Information
Industry, China (6th November 2002)
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Interaction and Buyer Seller
Meeting with 80 Member Delegation from China participating at
IITF 2002 (16th November 2002)
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Meeting with CCPIT Delegation
led by Mr Liu Wenjie, Vice Chairman, CCPIT on 25th November
2002
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Meeting with Bureau of Fair Trade
for Imports and Exports, MOFTEC, China led by Mr Chen Zhou,
Director General of Department of Asian Affairs, MOFTEC( 18
December 2002)
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Participation of China as “Partner
Country” in IETF 2003/80 Chinese companies participated in IETF
2003
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Interaction and Buyer Seller
Meeting with 40 member Chinese Delegation, coinciding with IETF
2003
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Briefing on Chinese Enterprises
& Commodities by Ministry of Foreign Trade and Economic
Cooperation(MOFTEC), China, coinciding with IETF 2003
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Briefing on East China Fair (30th
July 2003, New Delhi)
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Interaction with Zhejiang Provincial
Government Delegation (1st October 2003, Gurgaon)
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CII CEOs Delegation to China
coinciding with the visit of the Indian PM to China (June 2003)
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Made in India Show, Beijing (16-19
October 2003)
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India Week China/CII Delegation
to China coinciding with Made in India Show (13-19 October 2003)
- Meeting with Chinese Delegation
led by Ms Liao Dafeng, Vice Director, Department of Foreign Investment
Administration, Ministry of Foreign Trade and Commerce (MOFCOM)
(24th October 2003, New Delhi)
- India – China (Chengdu) Economic
Cooperation: Interaction with the CCPIT Chengdu Software Industry
Delegation (30th October 2003, New Delhi) led by Mr Hao Kangli,
Deputy Mayor, Chengdu People’s Municipal Government & Signing
of CII-CCPIT Chengdu MoU.
- Meeting with Haiyan Delegation
led by Mr Huang Weishu, Mayor, Haiyan County, People’s Republic
of China (17th November 2003, New Delhi)
- Interaction with Dr Zhu Min, Advisor,
Bank of China (27th November 2003, New Delhi)
- India China Business Seminar coinciding
with the visit of the ACFIC Delegation led by Mr Xie Boyang Leader
(ACFIC Delegation) & Vice Chairman, All China Federation of
Industry and Commerce (ACFIC) (28th November 2003, New Delhi)
& Renewal of CII-ACFIC MoU
- Interaction with CCPIT Zhejiang
IT Delegation (19th December 2003, New Delhi)
- Meeting with Chinese Economists
(12 March 2004, New Delhi)
- Meeting with China Machinery Industry
Federation Delegation (23 March 2004, New Delhi)
- Meeting with Hai Nan Delegation,
China (22 April 2004, New Delhi)
- Interaction with SMERT IT Delegation
, China (29th April 2004, New Delhi)
- Meeting with Shenzhen delegation,
China (17 May 2004, New Delhi)
- Meeting with Zhejiang Delegation,
China (24 May 2004, New Delhi)
- Interaction with Chinese International
Contractors Association (CHINCA) (1st June 2004, New Delhi)
- India China Business Conclaves
(3rd & 6th August, New Delhi & Kolkatta)
- Meeting with CR’s of North East
Asia Region (September, New Delhi & Mumbai)
- Meeting with Mr Ismail Tiliwaldi,
Chairman, Xinjiang Region, China(10 Oct 2004)
- Meeting with CCPIT, Hubei (Nov
2004)
- Meeting with CCPIT, Wuhan (Nov
2004)
- Meeting with Anhui Delegation,
China (10 Nov 2004)
- Meeting with Shanghai Chemical
Industry Association Delegation (15 Nov 2004)
- Made in India, China (1-4 December
2004)
- Meeting with China Electricity
Council Delegation( January 2005)
- Meeting with Shanghai Institute
for International Studies (February 2005)
- Meeting with Chinese Mechanical
Engineering Society Delegation (February 2005)
- Conference on “The China Miracle”
(March 2005)
- Visit to CII headquarters by Liaoning
Province Delegation (April 2005)
- Joint Business Meeting with H.E
Mr Wen Jiabao, Premier of China (11th April 2005)
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