NEW DELHI: India is free to join the Regional Comprehensive Economic Partnership (RCEP), China’s Vice Commerce Minister Wang Shouwen said on Friday in New Delhi, adding that it would boost trade between India and China which is growing “very fast”.
The RCEP is the world’s largest trade bloc backed by China and groups 15 Asia-Pacific economies, including Australia, Japan, New Zealand and 10 member-states of the Association of Southeast Asian Nations (Asean).
Relations have soured between the two nuclear-armed neighbours after clashes at a disputed border site in Ladakh resulted in the deaths of 20 Indian and four Chinese soldiers in June 2020.
Shouwen, speaking during a discussion at the `Business 20 summit’ of G20 member nations, said it was India’s decision whether to join the RCEP and that the door was “always open”.
India’s Trade Minister Piyush Goyal, who chaired the discussion, said trade between India and China is growing, but “largely skewed in China’s favour”.
Prime Minister Narendra Modi spoke to China’s President Xi Jinping about India’s concerns over unresolved border issues on the sidelines of the BRICS summit in Johannesburg this week.
Both sides agreed to intensify efforts to disengage and de-escalate, India’s foreign secretary told reporters on Thursday.
Xi told Modi that improving China-India relations served the interests of the two countries and was conducive to peace, stability, and development, according to China’s official Xinhua news agency, which said the meeting was at Modi’s request.
Economic boon far off
The expansion of the BRICS group of developing countries could provide a lifeline to capital-starved new entrants Iran and Argentina, but investors and analysts say a broader economic boon for the bloc’s members is far from certain.
Leaders of the BRICS — Brazil, Russia, India, China and South Africa — invited the two, as well as Saudi Arabia, the United Arab Emirates, Ethiopia and Egypt, into the club at this week’s summit.
The move is aimed at increasing the BRICS’ clout as a champion of “Global South” nations, many of which feel unfairly treated by international institutions dominated by the United States and other wealthy nations.
The additions are a mixed bunch: Saudi Arabia and the UAE are wealthy oil producers, inflation-wracked Argentina is desperate for foreign investment, Iran is isolated by Western sanctions, Ethiopia is recovering from a civil war and Egypt’s economy is in crisis.
Some investors and economic analysts are sceptical that expansion would lead to increased foreign direct investment (FDI) within the bloc.
“Egypt has already been expecting a lot of FDI from Saudis ... and the Gulf money is not coming _ and it is not because they are not in the BRICS organisation, it is because the proposition is not attractive,” said Viktor Szabo, a portfolio manager in London.
Still, BRICS leaders and other investors touted the increased economic heft from the expansion. The new members would raise the bloc’s share of global GDP to 29 per cent from 26 and trade in goods to 21 per cent from 18, Li Kexin, a senior Chinese foreign ministry official, told a press briefing on Thursday. “I don’t know if I would say it’s a game changer, but in terms of opening up consumer markets there is scale there,” said Ola El-Shawarby, a portfolio manager in New York.
Published in Dawn, August 26th, 2023
