Trade Problems And Countermeasures Between China And India

The late 20^th century saw the slow progress of multilateral trade negotiations under WTO while the great enthusiasm and efforts of every economy power for the free trade agreement and regional economic cooperation. As a result, regional economic integration, besides economic globalization, is becoming another engine for the growth. China and India, two largest developing countries in the world, have found more and more voices in the world economy for their dynamic economic development. Trade between the two countries has grown competitively while mutually for their geographic proximity, similar national conditions and economic development stage. On one hand, the bilateral trade has grown very robustly. Each country's aggregate international trade is expanding by34% annually. In 2007, the volume of trade between two countries reached up to 38.6 billion US dollars, and China already is India's number two trading partner while India is China's number ten trading partner. On the other hand, the trade frictions between China and India have been escalating. India has frequently initiated anti-dumping investigations against Chinese commodities and many Indians are always thinking China one of their keen competitors. Therefore, it is vital to study China-India trade development and the prospects between two sides for proper trade policies to be made and better potential cooperation.Analyzing from the present situation of Sino-Indian trade, this paper is seeking to find the trade problems and the key factors affecting the bilateral trade by the theoretical and practical ways. It explains the reasons concerning the trade conflicts and puts forward some good suggestions in how to deal with the trade conflicts rationally, and in how to strengthen cooperation and make greater efforts to find a win-win solution. The essay is made up of four parts. The first part discusses the theoretical foundation of bilateral trade, pointing out the position and role of the comparative advantage theories as well as Intra-industry trade theory, which is to lay a foundation for further research for the Sino-Indian present trade situation and the causes. The second part is about the empirical work in Sino-Indian Trade development. Classifying under international trade standard, the essay has a system calculation of Sino-Indian Trade Scale, Comparative Advantage Index,Composite Index,Complementary Index and Trade Index within the Same Industry and draws a relevant conclusion. The third part mainly analyzes the problems existing in the Sino-Indian trade development and the causes. Based on the outlook of China and India's Bilateral trade development , the last part gives some suggestions on how to further develop the bilateral trade relationship in both micro and macro sides.