The implications of the first phase of the US-China trade settlement will travel far beyond China, impacting countries that deal with Beijing. In most cases, the impact on China’s trade partners, including India, will be negative. But smart Indian companies can take advantage of some aspects of the deal, especially what they failed to cover, such as the technology sector. The deal will curtail China’s ability to buy goods from non-US countries as Beijing has committed to purchasing goods and services worth $200 billion above the 2017 level from the US. Countries such as India that have been trying to persuade China to buy more have reasons to worry. India and several Asian countries are not in the same league as the US when it comes to supplying quality goods from the industrial and agriculture sectors. For instance, Indian grains, fruit and vegetables have not been able to overcome testing and quarantine requirements essential to access the Chinese market. But there are … [Read more...] about US-China trade settlement: What’s in it for India?
China trade balance
By Archana Chaudhary India is considering allowing some imports from China to be settled in yuan, people familiar with the proposal said, as the South Asian nation moves to limit its currency’s loss against the dollar. The plan would enable direct convertibility between the rupee and yuan and will help cut transaction and hedging costs, the people said, asking not to be identified citing rules. The proposal would allow Indian exports of pharmaceuticals, oilseeds and sugar to China to be settled in rupee, while keeping out trade in high volume products such as electronics, they said. India-China trade is mainly settled in US dollars since currencies between the two nations aren’t directly convertible. By allowing Indian importers to pay for Chinese goods in yuan, the South Asian nation would be able to save on dollars to pay for escalating oil import costs in the face of higher crude prices and the rupee’s slump to a record low. Oil is India’s biggest import … [Read more...] about Rupee slump is said to push India to seek yuan trade settlement
By Ritesh Singh Many of us increasingly believe these following five myths about China: 1) China’s authoritarian governance model is primarily responsible for its unprecedented economic rise; 2) China has made impressive gains by manipulating global trade and investment rules, stealing IPRs and resorting to unfair subsidies; 3) China promotes exports by all kinds of fair and foul means but remains unreceptive to imports; 4) Favourable global factors such as emergence of WTO and Information Technology Agreement (ITA) helped China to become the world’s factory; and 5) China’s been able to create its local tech biggies like Alibaba by restricting global tech giants such as Amazon. In this view, India should take the following lessons. We should be cautious about FTAs (that lead to more imports than exports), and shouldn’t be all-welcoming towards FDI and MNCs. We should promote desi companies over foreign ones. Most countries have now turned protectionist so we … [Read more...] about View: Should India follow China’s course or chart its own path to reach the $5 trillion goal?
SHANGHAI: A city in northeastern China has launched a trial programme allowing exporters to use the yuan to settle transactions with isolated neighbour North Korea, local authorities said. The scheme in Dandong will "reduce exchange rate risks and the costs of doing business" and allow registered exporters to claim tax rebates, the city government said in a statement on its website Wednesday. Beijing said in June it would expand a trial programme for cross-border yuan trade settlement to 20 Chinese provinces, including Liaoning where Dandong is located. The programme covers all foreign countries, the statement said. The move appears intended to encourage legal trade and curb smuggling between the two countries, and comes after North Korean border guards in June shot dead three Chinese citizens, all of whom lived in Dandong. The three were suspected of crossing the border to engage in illegal trade, the official Xinhua news agency said. China is North Korea's sole major … [Read more...] about China launches yuan trade settlement scheme with North Korea
BEIJING: Bank of India has become the first Indian bank to offer trade settlement facility between the rupee and the Chinese RMB from Hong Kong. This follows intense persuasion by the China Banking Regulatory Commission, which is trying to gain acceptance of the RMB as an international currency. "We are the first Indian bank to offer real-time settlement facility in RMB to Indian exporters and importers. It will be save a lot of time because settlement in US dollars usually takes three working days," Arun Kumar Arora, BoI's chief executive in Hong Kong, said during a recent visit to meeting regulators in Beijing. Indian buyers are at present making payments in US dollars, and they often have to convert rupee into the US currency for the purpose. The US dollars will no more be the intermediary currency as the BOI is offering direct settlement between the rupee and the Chinese money. Chinese exporters want their money in the local currency, which is regarded as more stable … [Read more...] about Bank of India becomes 1st Indian bank to offer trade settlement in Chinese yuan