It's a great honor for me to be invited by the esteemed Engineering Export Promotion Council to say something on "Doing Business with China".

We know that Engineering Export Promotion Council is a body facilitating the trade of engineering goods from India, since 1955. It is the largest Council, with 13,000 member exporters, under the auspices of the Ministry of Commerce and Industry, Government of India.

We also know that EEPC regularly organizes India engineering exhibitions and buyer-seller meets abroad to showcase India's engineering achievements and publicize Brand India in the world.

And we are particularly glad to know that EEPC is organizing an India Engineering Exhibition for the forthcoming China International Industry Fair 2008 from 4th-8th November, 2008 in Shanghai.

As I know, the China International Industry Fair is jointly organized by several ministries of China's central government and some of the most important chambers of commerce and industries in China. So it is a state-based and widely participated international event. It will be a great industrial gathering. I believe that it will be a very good opportunity for Indian engineering exporters to know China, to have a detailed picture of Chinese industries, and to explore business opportunities in China. I'm sure that anyone who visits the big fair won't feel disappointed.

Now let us go into today's topic: "Doing Business with China". It's a big topic. It's also a hot topic. In preparing my speech, I tried yesterday to search through Google to find web pages which have the exact four-word phrase "doing business with China". The search results showed there were 64,000 such web pages. I was satisfied.

Then, with curiosity, I replaced the word "China" with the word "India". Guess, what were the results? I was surprised that there were 77,000 web pages which have the exact phrase of "doing business with India".

My curiosity continued and I put the names of many other Asian countries one by one into this phrase. The results were that India enjoys the largest number of the web pages with the phrase of "doing business with that country", China is the second, and the number of such web pages of the Third and the Fourth is far behind. Finally I was satisfied with the fact that the world today is keen on doing business with both China and India.

To talk on Doing Business with China, we have two aspects: the first is why doing business with China, and the second is how to do business with China. As a diplomat, I think I might be able to say something on the first.

China has been a fast growing economy for the last three decades, and many well-known economists in the world have predicted that the momentum of the fast growth of the Chinese economy will be maintained for another twenty years.

Now let's have a quick look at a general picture of the current situation of the Chinese economy and its position in the world.

1) China's GDP reached 3.43 trillion US dollars in 2007 and China is the fourth largest economy in the world after the US, Japan and Germany. But the distance between the third and the fourth is very small and China will be the Third anytime in the near future. If measured on a purchasing power parity (PPP) basis, China is already the second largest economy in the world with a GDP of over 6.9 trillion US dollars, only second to the US.

2) China's foreign trade volume totaled 2.17 trillion US dollars in 2007, the third place in the world, after the US and Germany.

3) China's foreign exchange reserves were over 1.5 trillion US dollars at the end of 2007, the number one in the world.

4) The output of steel, coal, cement, textile, TV sets, shoes and so on, all rank the first place in the world.

5) China now has an express highway network with the total length of over 54 thousand kilometers, the second only to the US in the world.

6) The total electricity generating capacity reached 713 million kilowatts by the end of 2007, ranking the second in the world.

7) The total users of fixed telephones and mobile phones are 936 million, and both of the groups are ranking the first in the world.

8) The total users of internet are 220 million, more than that of the US and become the number one in the world.

Needless to say that the Chinese economy has many problems and particularly China's per capita income is still classified as low by world standards, at about 2,000 US dollars only. China has a long way to go.

However, what I want to emphasize here is that China, as a fast growing economy and one of the largest economies, is influencing the global economy in a big way and is providing valuable opportunities to the world.

According to latest IMF's World Economic Outlook report, for the first time in modern history, China will contribute more to global economic growth than the US this year.

As an export-oriented economy, China has manufactured for the world markets numerous goods with desirable quality and competitive price, which have increased the actual income of the people of importing countries and promoted consumption in the world.

At the same time, the scale of China's imports has expanded rapidly. China offers a broad market for the world now and the growing imports of China are creating employment opportunities in many countries.

I think these are the basic reasons why doing business with China.

Now let's have a look at the picture of the Sino-Indian trade and economic relations.

Three months ago, when the Minister of External Affairs of India, H.E. Mr. Pranab Mukherjee, inaugurated the Indian Consulate General in Guangzhou, South China, he declared that China has become India's largest trading partner.

The bilateral trade of China and India increased so rapidly in the last few years that even the leaders of the two countries failed to make correct predictions once and again.

When the Chinese President Mr. Hu Jintao visited India in 2006, the leaders of the two countries set the target of 40 billion US dollars of bilateral trade by 2010. In fact, that target was nearly achieved in 2007, three years ahead of schedule. So that during the Indian Prime Minister Dr. Manmohan Singh's China visit in January this year, the two countries set a fresh bilateral trade target for 2010, which has been revised from the previous target of 40 billion US dollars to a new high of 60 billion US dollars.

Now according to the statistics from the Chinese Custom House, the Sino-Indian bilateral trade reached 33.5 billion US dollars in the seven months between January and July, 2008. On this basis, we can expect that the figure for the whole year might be over 57 billion US dollars. That means there is a possibility that the three years' target set up in January might be achieved in December of the same year.

There is no doubt that the growth of Sino-Indian trade is really a great success story. The basic reason behind the story is, put it in a simple way, China needs India and India needs China. And put it in terms of economics, this is because of a fundamental fact that the economic strengths of our two countries are very much complementary.

We have a saying in China that "we are in you and you are in us", which means the two have mixed together. I see the Sino-Indian economic relations progressing this way. Recently my colleagues in our office did two pieces of research, one was on Indian Companies in China and the other was on Chinese Companies in India.

First, let's look at the Indian companies doing business in China. Do you know how many Indian companies have now set up their sub companies, joint ventures, factories or representative offices in China? The website of the Indian Embassy in Beijing lists 154 Indian companies as having such establishments across China. The website of the Indian Consulate General in Shanghai shows a similar kind of list with 83 Indian companies having a base in eastern China. But I believe that the real number must be much higher.

I am afraid my knowledge of economics is quite limited and I need a simplified way to understand this picture. By searching the internet with different criteria, I have found a few lists of Top Ten Companies in India.

In one such List of India's Top Ten Software Companies, six out of the ten have their base in China. These are: TCS, Wipro, Infosys, Satyam, MphasiS and NIIT.

In the List of India's Top Ten Pharmaceutical companies, five out of the ten have their factories or laboratories in China. These are: Ranbaxy, Dr. Reddy's Laboratories, Aurobindo, Lupin Laboratories and Sun Pharmaceutical.

In a List of India's Ten Richest Companies, five out of the ten have their factories or offices in China. These are: Reliance Industries, State Bank of India, ICICI Bank, Steel Authority of India and Tata Steel.

And in the List of India's Ten Most Respected Companies, seven out of the ten have their branches in China. These are: Reliance, Infosys, Wipro, Dr. Reddy's Laboratories, Ranbaxy, Jet Airways and ICICI Bank.

Now the picture is much clearer and I can safely say that "you are really in us".

Why are so many Indian companies keen to do business with and in China? The reasons might be simple: a large domestic market, developed supply and demand chains, good infrastructure, low cost of capital, friendly business environment and easier industrial relations.

Now let's look at Chinese Companies in India. Generally speaking, the presence of Chinese companies in India is visibly less than their Indian counterparts in China. According to the figures given by the Chinese Ministry of Commerce, there are about 60 Chinese companies which have their branches now in India and actual Chinese investment in India as registered with the Ministry is around 50 million US dollars.

However, in the sector of infrastructure, which is a booming market in India, Chinese companies are quite active, playing a growing and big role. In 2006, Chinese companies were awarded contracts worth 3.23 billion US dollars and India was the largest single overseas market that year for Chinese companies undertaking contract projects. Last year, Chinese companies won contracts worth 4.56 billion US dollars through competitive bidding, a 40% increase from the previous year. Many of these new contracts are in the power sector. These new projects, when completed, will provide a total generating capacity of more than 10,000 MW of electricity. In the sectors of telecommunication and highways, Chinese companies were awarded several large contracts in 2007, valued at 1.5 billion US dollars and 230 million US dollars respectively.

Now may I say that, at least in the infrastructure sector, "we are becoming in you" also?

Ladies and gentlemen,

I think the picture of the Sino-Indian economic cooperation I am presenting to you today shows a very positive and win-win situation. Considering the huge size of the two economies and the mutually complementary economic strengths of our two countries, I believe that the future of Sino-Indian economic cooperation is bound to be bright and shining.

I am sure that Indian engineering exporters believe the same and will not miss any business opportunities in the Chinese market, especially when you are at the China International Industry Fair 2008 in Shanghai.

Thank you.