Chinese Trade With INDIA AND USA

It is not astonishing and wrong to say that  allowing Foreign Direct investment in India in Retail Sector will force young Indians to become sales boy or sales girl. While China has focused on manufacturing and agriculture , Indian politicians belonging to UPA believes in increase in FDI in India. Chinese products have not only invaded India but entire world. 

Even USA depends on China for manufacturing of many products and major chunk of USA export is generated through goods manufactured in China. 

In olden days people of India, USA , USSR and other developed countries used to criticize China for their policy of communism and for not following democratic principles of allowing complete freedom to citizen , the way India has provided.

For last few years there has been complete change in the image of China. Now all developed countries and developing countries are worried of growing network and manufacturing power of China. 

Chinese youth need not go to other countries for employment , rather they are invited by other countries to set up various projects in their countries.Indian government has on the contrary exhibited its hollowness in manufacturing sector, farm sector and even in service sector. This is why Indian politicians feel pride in calling companies like Walmart to established Cold storage , ware houses and do trading activities in retail.Indian talents are constrained to seek better job in other countries.Our Finance Minister shed Crocodiles Tears on Indian talent going abroad and advises them to remain in India to serve Indian mass .

There is no doubt in it that if these giant companies start buying products directly from farmers at price as per whims of these companies, the farmers will have no alternative than to discard farming as has happened in other countries like USA.If they buy goods at cheaper rate and sell the same at cheaper rate , fate of lacs of retailers will be doomed. they will be rendered jobless and add to begging business in India.If Indian government force these companies to buy goods at Minimum price fixed by them, the selling price will be more than what it is today and hence consumers will face more hardships than they face today.

However It is not possible for Indian government to force foreign companies to buy food grains from farmers at minimum support price fixed by Indian government. 

Further these companies are allowed to import 70 percent of goods from other countries for their shops in India.It means Indian manufacturing sector will further face setback and there will be sharp fall and disincentive to Indian industries .

To add fuel to fire , imports to India will escalate to greater heights when these companies will start importing goods from other countries like China and remitting profits to their parent country. 

Since manufacturing and farm sector will face erosion in value and volume , Indian will not be in a position to increase export at rate in tune with growth rate in import, there is all possibility that Indian Trade deficit will face severest crisis and sharp downfall in value of Indian currency in world market. there is no doubt that Indian talent will get lesser scope of their employability in India as per their talent and qualification (other than marketing and salesman job). 

India will face the same crisis of unemployment which now USA is facing due to increasing dependence on China for manufacturing and trade. Inspite of preaching sermons for other countries on trade liberlisation USA is bent upon reducing outsourcing to increase employment opportunities in USA for US citizens.On the contrary Indian government is bent upon abolishing all employment opportunities , some time for say middlemen and sometimes for talented engineers and at some other times for farmers when food grain items produced by farmers will have no takers in Indian market .

I have no doubt that Indian government and corrupt politicians will realise their guilt sooner or later, but when they will understand the fault of policy it will be too late.Urban population specially belonging to upper middle class and rich class may enjoy these attractive markets in initial few years , but in due course of time such markets will widen the gap between rich and poor, create and enhance animosity between haves and have-nots and ultimately give a boost to criminal activities.This has to happen keeping in view poor administrative, police and judicial machinery of India and corrupt nature of Indian politicians.

Not only this, FDI in retail will spending habits of upper middle class and rich class people which will result in lesser savings.To add fuel to fire RBI and MOF are contemplating to further reduce interest rate which will against be a disincentive to all who used to save money in banks.Resultant effect will badly harm the investment capacity of the government and cause much erosion in manufacturing activities.

Government may get additional power by FDI in retail to distribute more and more cash subsidy to rural mass to enrich their vote bank, but ultimate effect of these cash subsidies will further reduce the working habits of rural mass and their dependence will slowly grow on easy money they will get from government in cash.Indians will add to begging profession and disincentivise working class in all sector including agriculture and manufacture.

Chinese Imports Invade India

By Bruce Einhorn and Kartikay Mehrotra on February 23, 2012

Outsourcing specialist Tata Consultancy Services (TCS), the largest Indian IT services company, moved into the China market 10 years ago, eventually teaming up with the Chinese government to provide outsourcing services to state-owned banks and other financial institutions. A decade later the TCS head count in China is not even a rounding error in the company’s ledger: only 2,000 employees, compared with a global TCS staff of 235,000. Even with the government as a partner, an Indian company has to work hard at building relationships with potential Chinese customers. “It’s disappointing,” says Girija Pande, chairman of Asia-Pacific for TCS. Making headway in China “will take time.”

Of the 2.7 million people India’s IT services industry employs worldwide, just 16,000 are in China, according to trade association Nasscom. Indian companies struggle in China with nontariff trade barriers such as requirements to obtain security clearances before doing business with government-backed companies, according to Nasscom President Som Mittal. “The markets are really closed,” says Mittal, who wants Indian officials to make improved access a priority in talks with Chinese leaders.

In the fiscal year ending March 2011, China exported $43.5 billion in goods to India, up from $10.9 billion in 2006, according to India’s Ministry of Commerce and Industry. India’s exports to China were only $19.6 billion, up from $6.8 billion in 2006. Cheap Firefox bicycles are ubiquitous in New Delhi. Technically, it is an Indian brand—except the bikes are made almost entirely of Chinese components. Chinese-made phones and telecom equipment “have flooded the Indian market,” says Srikanth Kondapalli, a professor at the Centre for East Asian Studies at Jawaharlal Nehru University in New Delhi. “There is no reciprocity for Indian products.”

The surge of cheap goods has led some Indian executives, like their U.S. counterparts, to say government-aided Chinese rivals are undermining India’s industrial base. “Without a duty to control Chinese imports, we will continue to lean on cheaper, unproven equipment instead of building our own technology and our own industry,” says B. Prasad Rao, chairman of Bharat Heavy Electricals. The $13 billion New Delhi-based producer of power equipment is struggling to compete against lower-priced products from Shanghai Electric and Dongfang Electric. Chinese-made power equipment, such as steam turbines and boilers, is about 20 percent cheaper than equivalent Indian products, according to Ashok Khurana, director-general of the Delhi-based Association of Power Producers. “The Chinese are very shrewd marketing people and we know our side is full of suckers,” says Subramanian Swamy, president of the Janata political party and Minister of Commerce in 1991, when India signed its first free trade agreement with China.

Two months prior to the August bankruptcy of Solyndra, which highlighted the inability of U.S. solar panel makers to compete with the Chinese, Indosolar (ISLR), India’s largest maker of solar cells, defaulted on $56 million in bank loans. “China’s doing a spectacular job of keeping India’s economic growth under its thumb,” says L.R. Shrivastav, chief executive officer of Moser Baer Power & Infrastructure, another Indian solar panel producer. The Indian government may join a U.S. complaint to the World Trade Organization targeting alleged dumping by Chinese solar companies.

To keep a closer eye on dumping and government-subsidized bids for domestic contracts, India’s Department of Commerce will launch the Directorate General of Trade Remedies this spring, according to two government officials who spoke on condition of anonymity. Forty-four of India’s 69 active antidumping cases before the WTO are against Chinese industries, according to the international trade body. “Manufacturers are afraid and want barriers,” says Biswajit Dhar, director-general of Research and Information Systems for Developing Countries, a New Delhi-based think tank. “Either we’re trying to block them or we’re getting pummeled by them.”

The bottom line: China exports to India twice as much as India exports to China, stirring concerns in India that local industries cannot compete.

http://www.businessweek.com/articles/2012-02-23/chinese-imports-invade-india

Country:  CHINA P RP

S.No.	\Year	2007-2008	2008-2009	2009-2010	2010-2011	2011-2012
1.	EXPORT	4,359,741.59	4,266,133.36	5,471,392.87	7,024,221.14	8,747,082.09
2.	%Growth		-2.15	28.25	28.38	24.53
3.	India's Total Export	65,586,352.18	84,075,505.87	84,553,364.38	114,292,192.18	146,595,939.96
4.	%Growth		28.19	0.57	35.17	28.26
5.	%Share	6.65	5.07	6.47	6.15	5.97
6.	IMPORT	10,911,607.12	14,760,559.50	14,604,861.20	19,807,907.58	27,599,864.35
7.	%Growth		35.27	-1.05	35.63	39.34
8.	India's Total Import	101,231,169.93	137,443,555.45	136,373,554.76	168,346,695.57	234,546,324.45
9.	%Growth		35.77	-0.78	23.45	39.32
10.	%Share	10.78	10.74	10.71	11.77	11.77
11.	TOTAL TRADE	15,271,348.70	19,026,692.86	20,076,254.07	26,832,128.72	36,346,946.43
12.	%Growth		24.59	5.52	33.65	35.46
13.	India's Total Trade	166,817,522.10	221,519,061.32	220,926,919.14	282,638,887.75	381,142,264.41
14.	%Growth		32.79	-0.27	27.93	34.85
15.	%Share	9.15	8.59	9.09	9.49	9.54
16.	TRADE BALANCE
17.	India's Trade Balance	-35,644,817.75	-53,368,049.58	-51,820,190.38	-54,054,503.39	-87,950,384.49

http://commerce.nic.in/eidb/iecnt.asp

8 per cent slump in Indian exports to China widens trade gap

The fall is largely on account of the steep decline in the export of iron ore following recent bans

Indian exports to China fell by 8 per cent in July — the biggest decline in Chinese imports from any major country — further widening an already record trade deficit that has increasingly strained trade ties.

Indian exports to China fell to $12.9 billion after seven months of this year, according to figures released here on Friday. Imports fell 3.3 per cent to $26.6 billion, taking India’s deficit to $13.7 billion.

Officials said the fall was largely on account of the steep decline in the export of iron ore following recent bans. Iron ore, which is by far India’s biggest export product to China, fell by almost 50 per cent in the first six months of this year to $3.3 billion, down from $6 billion in the same period last year.

GLOOMY PICTURE

Friday’s trade figures, released by the Chinese General Administration of Customs (GAC), painted a gloomy picture overall for the Chinese economy. Export growth fell to a six-month low in a reflection, Chinese officials said, of persisting global sluggishness, falling European demand and increasing factory costs.

Exports rose one per cent in July, compared with 11.3 per cent growth the previous month. Imports increased at a slower 4.7 per cent, down from 6.3 per cent in June. “The July data were poor indeed,” Zheng Yuesheng, who heads the GAC’s statistics department, told reporters. “It will be an arduous task to fulfil our foreign trade target, as external demand is weak. The weaker than expected trade data has increased pressure on the Chinese government to take robust measures to boost the economy. With the export sector losing speed faster than expected, the government’s current investment stimulus plan looks woefully inadequate,” said Alistair Thornton of IHS Global Insight.

“This isn't a 2008 collapse, but it's not worth testing how close the economy can get. The government is likely to respond by ramping-up its stimulus efforts, with both monetary and fiscal guns firing.”

The lowest inflation figures in two and a half years reported recently have given the government more room to put in place strong stimulus measures. In recent weeks, the central bank has cut lending and deposit rates — for the second time this year — while the government has said it would accelerate investment in infrastructure projects.

Bilateral trade between India and China reached a record $73.9 billion last year, with the imbalance widening to $27 billion. Chinese demand for iron ore has played a major role in driving the trade relationship, which has rapidly grown this past decade up from a few billion dollars. Indian imports of Chinese machinery and of power and telecom equipment have been another major driver of trade.

COMPETITIVE PRODUCTS

With India looking to improve the nature of trade and restrict exports of ores and raw materials, officials said the need to identify competitive products as new drivers of the trade relationship had become paramount. So far, India has made little headway in pushing exports of pharmaceuticals and in information technology, where officials have so far focused their efforts to improve market access.

While India has complained of complicated registration procedures for drugs and of Chinese reluctance to accept Indian software products, Chinese officials say Indian companies have done far less than their international competitors to establish a significant presence in either sector. They say Indian pharmaceutical companies have not been active enough to push their products and engage with hospitals, while Western technology companies had established a presence in China decades earlier.

Beyond the reasons for the imbalance, the growing deficit has increasingly strained ties - India has, in recent years, filed more anti-dumping investigations against China than any other country. The trend has concerned officials on both sides of the border, particularly because trade has emerged as the biggest bright spot in a relationship that is still grappling with many strategic challenges.

http://www.thehindu.com/business/Economy/article3751046.ece

US-China Trade Statistics and China's World Trade Statistics

Table 1: China's Trade with the United States, 2001-11 ($ billion)
Notes: *Calculated by USCBC. US exports reported on a free-alongside-ship basis; imports on a general customs-value basis. Source: US Department of Commerce; US International Trade Commission (ITC)
	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011
US exports	19.2	22.1	28.4	34.7	41.8	55.2	65.2	71.5	69.6	91.9	103.9
% change*	18.3	14.7	28.9	22.2	20.5	32.0	18.1	9.5	-2.6	32.1	13.1
US imports	102.3	125.2	152.4	196.7	243.5	287.8	321.5	337.8	296.4	364.9	399.3
% change*	2.2	22.4	21.7	29.1	23.8	18.2	11.7	5.1	-12.3	23.1	9.4
US balance	-83.0	-103.1	-124.0	-162.0	-201.6	-232.5	-256.3	-266.3	-226.8	-273.1	-295.5

Table 2: Top Ten US Exports to China, 2011 ($ billion)
*Calculated by USCBC Source: ITC
HTS #	Commodity Description	Volume	% Change Over 2010
84	Power generation equipment	10.8	9.70%
12	Oil seeds and oleaginous fruits	10.7	-3.10%
85	Electrical machinery and equipment	7.2	-16.60%
87	Vehicles, excluding rail	6.4	55.60%
88	Aircraft and spacecraft	6.3	10.80%
90	Optics and medical equipment	5.2	8.30%
39	Plastics and articles thereof	5	7.20%
47	Pulp and paperboard	3.8	27.10%
74	Copper and articles thereof	3.7	32.70%
29	Organic chemicals	3.5	17.80%

Table 3: Top US Imports from China, 2011 ($ billion)
*Calculated by USCBC Source: ITC
HTS#	Commodity description	Volume	% change over 2010
85	Electrical machinery and equipment	98.7	8.7
84	Power generation equipment	94.9	14.7
95	Toys, games, and sports equipment	22.6	-9.4
94	Furniture	20.5	2.7
64	Footwear and parts thereof	16.7	5.1
61	Apparel, knitted or crocheted	15.1	7.4
62	Apparel, not knitted or crocheted	15.0	1.8
39	Plastics and articles thereof	10.9	13.0
73	Iron, steel	8.6	18.0
87	Vehicles, excluding rail	8.1	17.0

Table 4: China's Trade with the World, 2001-10 ($ billion)
Notes: *Calculated by USCBC. PRC exports reported on a free-on-board basis; imports on a cost, insurance, and freight basis. Source: PRC National Bureau of Statistics
	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010
Exports	266.1	325.6	438.2	593.3	762.0	968.9	1,217.8	1,430.7	1,201.6	1,577.9
% change*	6.8	22.4	34.6	35.4	28.4	27.2	25.7	17.5	-16.0	31.3
Imports	243.6	295.2	412.8	561.2	660.0	791.5	956.0	1,132.6	1,005.9	1,394.8
% change*	8.2	21.2	39.8	35.9	17.6	19.9	20.8	18.5	-11.2	38.7
Total	509.7	620.8	851.0	1,154.6	1,421.9	1,760.4	2,173.7	2,563.3	2,207.5	2,972.8
% change*	7.5	21.8	37.1	35.7	23.2	23.8	23.5	17.9	-13.9	34.7
Balance	22.6	30.4	25.5	32.1	102.0	177.5	261.8	298.1	195.7	183.1

Table 5: China's Top Exports, 2010 ($ billion)
*Calculated by USCBC Source: PRC General Administration of Customs, China's Customs Statistics
HS#	Commodity description	Volume	% change over 2009
85	Electrical machinery and equipment	388.8	29.1
84	Power generation equipment	309.8	31.4
61, 62	Apparel	121.1*	20.5*
72, 73	Iron and steel	68.1*	44.1*
90	Optics and medical equipment	52.1	34.0
94	Furniture	50.6	30.0
28, 29	Inorganic and organic chemicals	43.2*	34.9*
89	Ships and boats	40.3	42.1
87	Vehicles, excluding rail	38.4	37.5
64	Footwear	35.6	27.1

Table 6: China's Top Imports, 2010 ($ billion)
*Calculated by USCBC Source: PRC General Administration of Customs, China's Customs Statistics
HS#	Commodity description	Volume	% change over 2009
85	Electrical machinery and equipment	314.4	29.0
27	Mineral fuel and oil	188.7	52.1
84	Power generation equipment	172.3	39.4
26	Ores, slag and ash	108.6	54.9
90	Optics and medical equipment	89.8	34.1
39	Plastics and articles thereof	63.7	31.3
28, 29	Inorganic and organic chemicals	58.2*	37.2*
87	Vehicles, excluding rail	49.5	74.5
74	Copper and articles thereof	46.1	55.8
72, 73	Iron and steel	34.5*	-6.1*

Table 7: China's Top Trade Partners, 2010 ($ billion)
Source: PRC General Administration of Customs, China's Customs Statistics
Rank	Country/region	Volume	% change over 2009
1	United States	385.3	29.2
2	Japan	297.8	30.2
3	Hong Kong	230.6	31.8
4	South Korea	207.2	32.6
5	Taiwan	145.4	36.9
6	Germany	142.4	34.8
7	Australia	88.1	46.5
8	Malaysia	74.2	42.8
9	Brazil	62.5	47.5
10	India	61.8	42.4

Table 8: China's Top Export Destinations, 2010 ($ billion)
Source: PRC General Administration of Customs, China's Customs Statistics
Rank	Country/region	Volume	% change over 2009
1	United States	283.3	28.3
2	Hong Kong	218.3	31.3
3	Japan	121.1	23.7
4	South Korea	68.8	28.1
5	Germany	68.0	36.3
6	The Netherlands	49.7	35.5
7	India	40.9	38.0
8	United Kingdom	38.8	24.0
9	Singapore	32.3	7.6
10	Italy	31.1	53.8

Table 9: China's Top Import Suppliers, 2010 ($ billion)
Source: PRC General Administration of Customs, China's Customs Statistics https://www.uschina.org/statistics/tradetable.html China import and export trends China has increased its import and export over the years. Its total value of import and export in 2007 reached USD 2.174 trillion and this raised China to become the world's third largest nation after U.S. and Germany. Below is the chart of China imports and exports and trends from year 1980 - 2007: China has a total value of import of USD 956 billion in 2007, which is an average annual increase of 25% since 2000. This is due to the increase of living standards in China which allow Chinese people to import goods from the international market. Furthermore, the influence of price rises in the international market and the further decrease of custom tax level results the growth of import in China. Below is the chart of China imports and its trends from year 1980 - 2007: China has a total value of export of USD 1218 billion in 2007, which is an annual average increase of 26% since 2000. This is due to the following reasons: first, China's exported products increased in its competitiveness and expanded their shares in the international market; second, China's utilization of foreign investment increased over the years achieving USD 74.8 billion in 2007, foreign investments results in the growth of export production; and third, reform on foreign trade system continued since early 19th centuries, and results the rose of partnerships and private enterprises which contribute to the exporting numbers. Below is the chart of China exports and its trends from year 1980 - 2007:
Rank	Country/region	Volume	% change over 2009
1	Japan	176.7	35.0
2	South Korea	138.4	35.0
3	Taiwan	115.7	35.0
4	United States	102.0	31.7
5	Germany	74.3	33.4
6	Australia	60.9	54.1
7	Malaysia	50.4	55.9
8	Brazil	38.1	34.7
9	Thailand	33.2	33.3
10	Saudi Arabia	32.8	39.2