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This is an archive article published on April 2, 2005

Let’s build the world’s largest free trade area, Beijing to New Delhi

Exploring ways to raise the level of India-China relationship during the visit of Chinese Premier Wen Jiabao next week, China has proposed t...

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Exploring ways to raise the level of India-China relationship during the visit of Chinese Premier Wen Jiabao next week, China has proposed to develop a free trade-area between the two countries. If this comes through, Chinese Ambassador Sun Yuxi said, it will be largest free-trade area in the world.

The proposal is among the 30-odd documents under discussion between various ministries on both sides as diplomats work overtime to set it all up for Jiabao and Prime Minister Manmohan Singh to take it forward. But the FTA is one proposal that, Sun believes, could do wonders in taking forward the idea of combining economic forces between the two most populous countries of the world.

‘‘China has a large manufacturing base. I believe it is the world’s factory. And India with its development in software and other areas, I feel, is the world’s office. What I am suggesting is to bring together the factory and the office,’’ said Sun at a media interaction ahead of Wen’s visit.

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With a trade that exceeds $13 billion—an increase of 79.1 per cent registered in 2004 alone—there is a promise that future holds for both countries. It is this dynamic that has made both countries to work towards a settlement of the historical boundary question.

Yuxi said there were no immediate solutions in the offing, but there could be an agreement reached on some ‘‘political parameters’’ and ‘‘guiding principles’’ this visit. This will be finalised by Special Representatives M K Narayanan and Dai Bingguo who will meet ‘‘before or during’’ the visit.

Foreign secretary Shyam Saran and Chinese Vice-Minister Wu Dawei recently concluded a meeting of the joint working group on the boundary issue at Beijing, where it was agreed that the Special Representatives would meet soon for this purpose.

According to Sun, China’s effort would be to keep the border areas ‘‘peaceful and tranquil’’. He added that the Sikkim issue was now settled and that orders have been passed to make the necessary changes in maps that are published from now on. The Chinese Ambassador said there was no confusion on this. ‘‘If you see a mistake in any Chinese map printed from now on, please let me know.’’

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China, he said, was keen on making the border ‘‘a bridge for exchanges and friendship’’. In taking this forward, both sides will agree on opening more trading points along the border much on the lines of Nathu La. However, no specific point on the demarcation of the boundary will be touched during Jiabao’s visit.

Besides this, India and China hope to strengthen cooperation in the energy sector. For starters, both sides are likely to agree on a committment not to indulge in ‘‘negative competition’’ that will be detrimental to either side’s interests.

It was agreed that a joint task force will be set up to study cooperation in this sector and work is on to include this aspect in the joint comnmunique to be issued during the Chinese Premier’s visit.

This apart, in the context of reforms in the United Nations, Sun said Beijing would like to see New Delhi play a ‘‘bigger role’’ at the UN and in the security council. He, however, remained non-committal on backing India’s bid for permanent membership with full veto rights as discussions were underways within the UN.

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