China and India agreed on Sunday to reopen border trade at the Nathu La Pass
on July 6 after 44 years' closure.
Officials from both sides ended the discussion on the issue in Lhasa, capital
of Tibet Autonomous Region, and signed on the agreed minutes on Sunday.
The reopening of the Nathu La Pass is expected to give a major boost to
bilateral trade between the two countries.
Trade in this area accounted for 80 percent of the total border trade volume
between China and India in the early 1900s. Trading through the pass was
suspended in 1962 after border conflicts.
"The reopening of border trade will help end economic isolation in this area
and play a key role in boosting market economy there, " said Hao Peng, vice
chairman of the autonomous region.
"It will also boost the transportation, construction and service industries,
paving the way for a major trade route that connects China and south Asia," Hao
added.
"The resumption of border trade is a great historic event, not only for
enlarging trade, but also for greater relations between the two great
countries," said Dr. Christy Fernandez, additional secretary of the Indian
Department of Commerce.
The resumption of border trade reflects the improved ties between China and
India, said Professor Liu Jiangyong with the institute of international studies
of the Beijing-based Qinghua University.
He said that China and India have been exploring ways of mutual beneficial
cooperation in the economic and trade fields, adding the accord on the
guidelines for border demarcation signed in 2005 by the two countries created a
peaceful environment.
Both sides marked 2006 as the year of Sino-Indian friendship.
More than 5,000 border residents came to Yadong county, where the Nathu La
Pass is located, every year for a trade of 3.6 million yuan (450,000 U.S.
dollars), although the trading port in Yadong did not officially open,
statistics from the county show.
China and India signed a memorandum of understanding on the resumption of
border trade at the Nathu La Pass in 2004. The Chinese State Council approved
the plan on the construction of border trade markets in Yadong in the ensuing
year.
"The reopening of the Nathu La Pass is a key move in strengthening economic
and trade ties, which will also enhance mutual political trust," Prof. Liu said.
China and India recorded 18.73 billion U.S. dollars in trade volume in 2005,
up 37.5 percent from the previous year, according to the Chinese Ministry of
Commerce. The volume is expected to exceed 20 billion U.S. dollars this year.
Currently China and India trade mostly by sea transportation. Tibet
Autonomous Region imports from and exports to India via Tianjin, a port city in
the north which is thousands of kilometers away.
Tibet is expected to benefit much from the resumption of border trade at the
Nathu La Pass, Hao Peng said.
"If only 10 percent of Sino-Indian trade goes through the pass it means at
least more than one billion U. S. dollars."
Last year the foreign trade volume of Tibet was 200 million U.S. dollars.
With the reopening of Nathu La Pass, iron ore and livestock products from
India and wool, herbs and electric appliances from China can be transported into
the other country through the short cut, Hao said.