India-China biletrial trade: opportunities and challenges Dr. Pal Virender*, Assistant Professor *Department of MBA, G.I.M.T., Kanipla, Kurukshetra, Haryana, India. Online published on 12 November, 2011. Abstract Liberalization of foreign trade is a watershed in development policy of both India and China. To start with, both the countries adopted inward looking import substitution policies with an emphasis on self-sufficiency. Later in 1978, China adopted the policy of ‘opening up to the outside world’ and in 1991, India initiated an import liberalization policy. Comparative advantage replaced self-sufficiency as the basic tenant of trade policy and both the countries are now pursuing market-oriented and outward-looking policies. India has been a member of the WTO since its origin and China joined the WTO in the year 2001. Both the countries are adhering to the WTO rules in conducting their international trade. China was able to preserve positive trade balance for a long period with the exception of early 1950s and in mid-1980s. The remittances from overseas Chinese have made an important contribution to the balance of payments. Moreover, they also brought skill and knowledge from foreign markets to boost production and exports. Investments from Hong Kong and Taiwan made a major contribution to China's rapid growth of foreign trade after the open door policy. However, this was not the case with India, the NRI contribution is insignificant and FDI was not export-oriented. Moreover, the volume of FDI was also small as compared to China. Although India and China are natural benchmarks for each other, there are large differences between the two. In spite of some similarities and dissimilarities, there is a scope for economic cooperation between India and China. Both the countries are growing fast. They are home to the world's largest pools of skilled work force and are expected to be the engines of global economic growth in the present century. Both the countries are developing closer economic relations with each other and with the rest of the Asian countries through bilateral and regional agreements. The present study “India-China Bilateral Trade: Opportunity and Challenges” presents an overview of IndoChina bilateral trade. This overview includes growth trends in exports, imports, commodity composition, trade diversification, trade intensity, patterns exports, and imports of both the countries. Based on this analysis, potential products for future expansion of trade in between China and India have been identified. Top Keywords Complementary, Bile trial trade, Trade intensity, Intra-industry, Trade overlap, composition. Top |