China on Thursday assured India that it is taking a "series of measures" to address India's concern over the mounting trade deficit which last year climbed to $56.8 billion, constituting 60% of the total bilateral trade.
The trade volume between India and China declined by about $3 billion last year while India's trade deficit continues to be high amounting to $56.8 billion as both countries experienced economic slowdown, according to the data released by the Chinese customs on Tuesday.
The trade figures released by the General Administration of Customs of China (GACC) projected the total trade in Chinese currency RMB-Yuan terms registered a marginal increase of 1.6 per cent year-on-year but in dollar terms it was down by about USD three billion.
GACC Vice Minister Zou Zhiwu, who released the annual trade figures to the media, said China-India bilateral trade totalled to 639.52 billion yuan (about $92.68 billion).
He said it is 1.6 per cent increase year-on-year but in dollar terms the trade has declined from $95.7 billion in 2018 to $92.68 billion dampening hopes of the trade reaching the landmark $100 billion.
Summing up the India-China bilateral trade figures, state-run Global Times on Wednesday said China's trade surplus now accounted for about 60% of the bilateral trade.
Asked about the mounting trade deficit and India's concern, Chinese Foreign Ministry spokesman Geng Shuang told a media briefing here that "China values the Indian concerns on the trade imbalance.
"In fact, we have never stopped improving that. And in fact, we have been taking a series of measures on accelerating the reviewing process of the Indian imports into China and in the past five years China's imports from India increased by 15 %".
He claimed that the "trade deficit has dropped dramatically" but did not substantiate. He also pointed to India's participation in China's 2nd International Import Expo (CIIE) held in November at Shanghai. India was accorded the "Guest of Honour Country" status at the expo.
Geng said: "India was the country with the biggest increase in the deals reached".
According to the figures posted on the website of the Indian Embassy here, from January to November 2019 the total trade between the two neighbours in the 11 months last year has declined by 3.72 per cent amounting to USD 84.32 billion and the trade deficit for the 11 months stood at $51.68 billion.
Highlighting India's concern over the trade deficit, a note posted on the embassy website said: "while flourishing trade has brought with it all the advantages, it has also led to the biggest single trade deficit we are running with any country".
"Our trade deficit concerns are two-pronged. One is the actual size of the deficit. Two is the fact that the imbalance has continuously been widening year after year to reach $58.04 billion in 2018.
"Growth in bilateral investment has not kept pace with the expansion in trading volumes between the two countries," it said.
The note also pointed to modest investment from China.
"While both countries have emerged as top investment destinations for the rest of the world, mutual investment flows are yet to catch up. According to the Ministry of Commerce of China, Chinese investments in India between January-September 2019 were to the tune of USD 0.19 billion and cumulative Chinese investment in India till the end of September 2019 amounted to$ 5.08 billion," the note said.
Cumulative Indian investment in China until September 2019 is $0.92 billion, it said.
However, these figures do not capture the investment routed through third countries like Singapore, Hong Kong among others, especially in sectors such as start-ups, which have seen significant growth in Chinese investment, it added.