The Wall Street Journal-20080116-Politics -amp- Economics- India Seeks Nuclear-Power Deal With Beijing
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Politics & Economics: India Seeks Nuclear-Power Deal With Beijing
BEIJING -- India's prime minister called for cooperation with China in developing nuclear power, as the quest for energy and the fight to avert environmental sanctions bring the longtime rivals closer together.
"We can do much more to jointly develop clean and energy-efficient technologies through collaborating" on research and development, Indian Premier Manmohan Singh said in a speech on the third day of a trip to Beijing, according to Reuters.
Mr. Singh's trip is the first by an Indian prime minister to China in five years. It comes as the neighbors have begun expanding trade and other ties despite decades of hostility and a burgeoning economic rivalry that spans the oil fields of central Asia and the nascent consumer markets of Africa.
The historical tensions between the two include a 1962 war -- a conflict that is still raw for India and that has spawned continuing disagreements over the border. Continuing suspicion of China has prompted India's government to withhold investment approvals for some Chinese companies.
The two sides achieved no breakthroughs this week, but they pledged to continue rapid expansion of already rising commercial exchanges.
Bilateral trade between China and India surged to $39 billion last year from $2 billion in 1999. This week, Mr. Singh and his Chinese counterparts pledged to boost that to $60 billion by 2010.
Trade growth has been driven by booming economic expansions that are also creating huge new demand for energy in China and India. In response, both countries have been accelerating their drive to develop nuclear power and other alternative fuels. China still overwhelmingly relies on coal, but it has plans to build about two nuclear power plants a year for the next 15 years -- the world's biggest nuclear- power building boom in decades.
To Beijing's displeasure, India last year signed a deal that for the first time in three decades allows the U.S. to ship nuclear fuel and technology to India. Mr. Singh's comments appear meant in part to allay Beijing's worries over nuclear proliferation.
India and China have found common ground on other environmental issues. Both countries are fending off international efforts to limit their emissions of global-warming gases such as carbon dioxide, which is released from coal-burning power plants and cement factories -- pillars of their economic booms and urbanization drives. Curbing these gases limits economic growth, they argue, and doesn't account for the damage already done by industrialized nations.
"The rights of our people to a fair chance to improve their lot cannot be abandoned because of environmental damage caused by others who . . . squandered the earth's resources," Mr. Singh was quoted by the Associated Press as saying.
China, the world's biggest coal producer and consumer, has already surpassed the U.S. as the world's top emitter of greenhouse gas by some estimates. India, which has the world's fourth-biggest coal reserves and has ambitious plans to use even more, isn't far behind.
While closer cooperation between China and India to develop sources of energy such as nuclear power could help take pressure off overburdened global fuel supplies, their allegiance to countering limits on greenhouse gases could hurt the world environment.
Despite the size of their economies, bilateral trade between China and India remains a fraction of their total trade with other countries. China's trade last year with Singapore, a country of four million people, hit $47 billion, some 20% more than the value of Sino- Indian trade, according to China's Commerce Ministry.
India exports mostly low-value-added commodities to China, including iron ore and semifinished iron and steel. In turn, China's major exports to India have been electronic goods, coal and coke. Because these commodities are more highly valued, bilateral trade has tilted more in favor of China, which posted a roughly $10 billion surplus last year.
The two countries have talked about signing a free-trade agreement, but China has appeared more eager than India to get it sealed. India has been concerned that it has more to lose from such an agreement. India's economy is protected by high tariff rates, which on average are about 10 percentage points higher than the tax levied on most Chinese goods. India would have to get rid of these tariffs -- and lose the tax revenue its government could otherwise collect -- under a free-trade agreement.
Indian officials also worry that a flood of Chinese goods would threaten its own low-cost manufacturing base. China, in turn, complains of barriers to direct investments in India.
The free-trade agreement apparently didn't come up during official talks, a sign that more delays are to be expected in getting it finalized. During his trip, Mr. Singh said greater economic integration can happen only when both sides help create a "level playing field."
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Peter Wonacott in New Delhi contributed to this article.
