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Chinese Premier Li Keqiang Visits India, Other Countries

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China Power

Chinese Premier Li Keqiang Visits India, Other Countries

Trade and business are high on the agenda as Li visits India, Pakistan, Switzerland, and Germany.

Chinese Premier Li Keqiang has started his first overseas trip since the change in government in March. Li will cover four countries through May 27 with visits that will focus heavily on economic issues.

His first stop is India, where he is meeting with Indian President Pranab Mukherjee and Prime Minister Manmohan Singh, while also attending a China-India Business Cooperation Summit where he will deliver a keynote speech.

Although some believe that the premier’s time in India will be overshadowed by the recent border incident, the charm offensive China launched ahead of the trip has sought to minimize the chances of that happening. It just may work.

Although the border issue will be discussed, both sides have a strong interest in ensuring the trip goes off smoothly, which is why there has been such intense diplomacy after China’s forces withdrew from their position on the border.

Both sides will be seeking to play up the economic aspect of the trip. Bilateral trade between India and China has skyrocketed to US$66 billion last year, but remains highly imbalanced with India running a US$29 billion deficit with China. India has called on China to address this issue, which Beijing has pledged to do. On Thursday, Vice Commerce Minister Jiang Yaoping said this effort would continue on this trip, with Li expected to bring an investment promotion mission and one of the biggest ever business delegations with him.

The investment mission and business delegation will follow Li to his next stop in Pakistan, where he is scheduled to meet both the outgoing and incoming Presidents of Pakistan, Asif Ali Zardari and Muhammad Nawaz Sharif, respectively. The trip is mostly symbolic for how soon after the election a senior level Chinese delegation will be in Islamabad, but China has said that three intergovernmental agreements on economic and trade cooperation will also be signed during the trip.

After leaving Pakistan, Li will head to Europe for stops in Switzerland and Germany. In many ways Chinese-EU ties have been robust under President Xi Jinping and Premier Li, with China signing its first free trade agreement with a European state, hosting two European heads of states and the EU foreign policy chief, and gaining permanent observer status at the Arctic Council, all of which may help expand Chinese-EU trade considerably in the future.

Yet there have also been a number of irritants in China’s relationships with individual European nations and increasingly the EU as a whole. In the former category is the ongoing spate between China and the United Kingdom (still part of Europe, for now anyway) over Prime Minister David Cameron’s meeting with the Dalai Lama. More problematic from China’s perspective is the increasing scrutiny its trade practices are being given by the EU, with Brussels threatening trade sanctions against China’s solar and telecommunication companies as part of anti-dumping and anti-subsidy legislation.

These issues may well find themselves on the backburner while Li is in Switzerland and Germany. In the former country, Premier Li will meet with President Ueli Maurer and other officials in what China’s Foreign Ministry has said will be an effort to establish bilateral ties that are “a model of friendly exchanges between countries with different social systems.” Bureaucratic jargon aside, discussions will likely focus on concluding a free trade agreement that both sides said was close to being signed following the ninth round of negotiations held last week.

In Germany, the Chinese premier expects to meet with President Joachim Gauck and Chancellor Angela Merkel, as well as give a speech to a business luncheon as part of Li’s effort to increase ties with non-governmental groups inside Germany. After the meeting with Merkel the two leaders plan to announce the “year of languages” between the two countries, a new initiative aimed at boosting the study of each other’s languages.

Vice Foreign Minister Song Tao placed a high premium on ties with Germany during a press conference on Li’s trip that was held on Thursday.

"China-Germany relations are at the forefront of China-Europe relations, featuring the most frequent high-level contacts and the most effective dialogue mechanisms," Song said, according to Chinese media reports.

According to China’s Vice Commerce Minister, Jiang Yaoping, China’s trade with Germany last year accounted for nearly 30 percent of its trade with the entire EU. The two countries’ economies are increasingly complementary as the export-reliant German economy seeks to open up markets outside of Europe and Chinese leaders seek to transition to a consumption economy.