Shenzhen (China): Amid controversy over the setting up of China-style Special Economic Zones (SEZ), India on 29 March said the government recognised SEZs as “an useful tool” in furthering industrialisation but will implement the concept in its “own way”.
“We recognise that SEZs are a useful tool for industrial development, especially in areas where infrastructure is lacking. Where infrastructure already exist, it is perhaps not necessary to create SEZs,” India’s Finance Minister P Chidambaram said after inaugurating the first full-fledged branch of Bank of India here.
The one-time fishing village of Shenzhen is the first the SEZ in China. It was China’s first major experiment with capitalism after late Chinese paramount leader Deng Xiaoping landmark visit to the southern Guangdong province in 1986.
“Where infrastructure is not existent, a SEZ will be a useful instrument to attract investors to build the infrastructure, to take advantage of the concessions offered by the government and to industrialise that area,” Chidambaram said.
“We recognise the validity of that principle and we are trying to implement it in our own way,” the Finance Minister said.
The Shenzhen SEZ was originally established in 1979 due to its proximity to Hong Kong, then a prosperous British colony.
The SEZ was created to be an experimental ground of capitalism in “socialism with Chinese characteristics”. The location was chosen to attract industrial investments from Hong Kong since the two places share the same language and culture, local officials said.
‘India, China partners in growth, not rivals’
With the India versus China comparison gaining currency, Chidambaram said New Delhi does not view Beijing as a rival but as a partner for making the ‘Asian Century´ a reality.
“This century promises to be the Asian century. China and India are leading the drive to make this century the Asian century,” he said.
Referring to China’s stupendous economic growth that has even touched 13% in the peak years after reforms of 1978, Chidambaram said he was confident India too be able to do it over the next 10 to 20 years.
“Many other countries, envious of China or India, may regard this as China VS India. We do not do so. We regard it as China and India, working together to make this century an Asian century,” he said.
He emphasised that relations between India and China in trade, commerce, business, diplomacy and in people-to-people exchanges should strengthen in the years to come.
Chidamabaram noted that bilateral trade in 2006 grew to a record $25 billion and there exists greater scope for the businesses of the two countries to cooperate more with the setting up of more financial institutions like banks in both countries.
He was confident that the Bank of India branch in Shenzhen, one of China’s fastest growing city, will be able to tap into the booming bilateral trade and grow faster.
ICBC branch in India soon
China’s biggest state-owned bank, the Industrial and Commercial Bank of China (ICBC) is likely to set up operations in India, Chidambaram said.
“ICBC representatives met me yesterday in Hong Kong. They are planning to have a branch in India,” Chidambaram added.
So far, no Chinese bank has ventured into India. However, many Indian banks have established their presence in China, including the State Bank of India and now Bank of India, which have full-fledged banks in the booming nation.
Bank of India also has a Representative Office in Beijing, becoming the first Indian bank to have two offices in China.
Other Indian banks that have representative offices in China include Bank of Baroda, Canara Bank, Punjab National Bank and ICICI Bank.
Indian Ambassador to China, Nirupama Rao said that seven Indian banks were awaiting approval for starting operations in China.