Build a Synergy for Win-win Situation
--Address by Counsellor Peng Gang at International Iron Ore & Steel Making Raw Materials Conference

(Panaji, Goa, Nov. 17th, 2011)

Distinguished guests,

Ladies and Gentlemen,

Today, I am very much honored and pleased to visit Panaji, such a kind of beautiful and vibrant coastal city, and attend “International Iron Ore & Steel Making Raw Materials Conference”. First of all, on behalf of the Embassy of the People’s Republic of China and on my own behalf, I would like to express my sincere gratitude to Oreteam Exim Private Limited and all friends present here today for your long-term effort and valuable support to the development of China-India cooperative relations. Here, I’d like to take this opportunity to share with you my views on our economic and trade relations and cooperation, especially in iron ore sector.

First, on China-India bilateral trade and investment relationship

As we all know, it is very important to place iron ore trade within the context of the overall China–India economic relationship. As the two fast emerging economies in the world today, with a total population of more than 2.5 billion and a growth rate at 8 to 9 percent annually, China and India have become engines for world economic growth. Under these circumstances, our bilateral economic cooperation has acquired global significance. Through the joint efforts of both sides, bilateral economic and trade cooperation has scored significant progress. During the past 3 years, mutual investments have boosted 10 times, and Chinese enterprises have completed infrastructural projects with total value of more than 10 billion USD in India.

The bilateral trade volume reached 61.7 billion USD in 2010, 20 times of increase within 10 years. From January to September of this year, bilateral trade maintains a strong momentum of growth. The two-way trade volume reached 54.5 billion USD, increased 20% if compared with the same period of last year. China has become the largest trade partner of India, and India is also China’s largest trade partner in South Asia.

Second, on bilateral iron ore trade and cooperation

As the biggest developing country in the world, China has been the largest producer of steel for a long time. Its steel production amounted to 630 million tons in 2010, accounting for 44% of the world output. Furthermore, China is the biggest buyer of global iron ore trade, absorbing about two-thirds of the global iron ore export.

As we all know, India is the third largest producer and exporter of iron ore in the world, with more than 20 billion tons of rich ore reserves. China and India are complementary to each other in many ways, especially in ore trade sector. So India has ever been China’s second largest source of imported iron ore till 2008, with the largest quantity of 107 million tons in 2009 and the largest market share of 25% in 2005.

However, due to some reason, India’s exports of iron ore was continuing to drop while the share of Indian iron ore in China’s market dropping accordingly in recent years. In the first half of this year, Indian iron ore exports to China witnessed a market share decrease to 15% from 25% in 2005. Even so, the majority of Indian iron ore are shipped to China, which accounts for over half of India’s merchandise export to china.

Ladies and gentlemen,

During Premier Wen Jiabao’s visit to India last December, two sides set a new trade target of 100 billion USD by the year of 2015. How can we accomplish this target under the circumstance of on-going financial crisis, is a sort of challenge for us. In order to promote the bilateral trade and cooperation, especially in iron ore sector, I’d like to give five suggestions as follows:

First, our two sides should continue to deepen mutual trust, strengthen communication, promote mutually beneficial cooperation, properly handle differences, so as to enhance the development of China-India Strategic Cooperative Partnership and create a favorable macro environment for the iron ore trade between the two countries.

Second, both sides can enhance the cooperation in the areas of mining exploration, development and deep processing. According to China’s 30 years’ experience of reform and opening up, to attract more FDIs and create huge employment, our governments need to provide necessary preferential FDI policies, create better investment environment for foreign investors. From Chinese side, we would like to encourage more Chinese competent enterprises to establish more joint ventures in iron ore and steel-making sector with their Indian peers so as to increase the capability of iron processing and steel production of India. At this Conference, a lot of Chinese entrepreneurs are present here, I firmly believe that there will be a lot more agreements, contracts and MOUs reached between the two sides.

Third, to enhance cooperation in infrastructure development

According to the Indian 12th Five Year Plan, India is going to invest 1 trillion USD in infrastructure development. This opens new opportunities for the India’s mining development. The companies of both countries might strengthen cooperation and investment with each other in mining supporting transport, logistics, ports construction and improvement, with a purpose of creating favorable infrastructure conditions of mining development and trade between the two countries.

Fourth, both sides might try to establish long-term iron ore trade agreement with a new pricing system, with the purpose of establishing a long and stable supply and demand relationship and creating a good atmosphere to facilitate trade between the two countries. And furthermore, it is very important to keep a transparent and stable policy system of mining, trading and export.

Fifth, during bilateral cooperation in iron ore industry, China and India should carry out comprehensive cooperation on environmental protection and low-carbon economy, try to apply Green Innovative Technologies to produce green and clean steel and other products.

Ladies and gentlemen,

Currently, the world economic and financial situation is still turbulent, and the recovery of the world economy is slowing down. Under this circumstance, China and India have every reason to work together to tide over this difficult period and ensure a sustained and healthy development of our respective economy, bringing tangible benefits to the peoples of both countries as well as to the whole world.

Ladies and Gentlemen,

Looking back upon the history, we can see that Chinese and Indian people have always been together on their path and in their destiny, as Mahatma Gandhi once said that China and India have always stood together and gone the same way. Since China-India economic and trade cooperation has achieved great success during the first decade of 21st century, at the very beginning of the new decade, we hope that the bilateral exchange and cooperation could step onto a new high. And, I believe, in the 21st century, China and India will live in greater harmony, work closely in a spirit of mutual benefit and win-win, and create a brighter future.

Ladies and Gentlemen,

Last but not the least, I sincerely wish today’s Conference a complete success, hope everybody present here today a good health, a successful career, a very happy and prosperous family.

Thank you!

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