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China and India Sign Major Trade Pact January 17, 2008

Posted by davidzweig in economics.
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This post from the Miami Herald views this development as having both real substance and profound impact, and it takes a Latin American perspective. However, the analysis applies to all nations and regions. For example, if this plays out as expected, it will reduce China’s need for dollar-denominated exports.

This week, Indian Prime Minister Manmohan Singh and China’s Premier Wen Jiabao said they would increase the bilateral trade target for 2010 from $40 billion to $60 billion, and that the two countries will start talks for a preferential trade agreement.

While international summits often produce ambitious joint declarations that never materialize, most experts take the China-India commitments seriously. Since China and India signed a ”strategic partnership” agreement in 2005, bilateral commerce has skyrocketed: their $20 billion trade target for 2008 was achieved in 2006.

”Records are tumbling when it comes to India-China trade,” The Times of India newspaper said Wednesday in an editorial. “China may soon become India’s largest trading partner.”

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