MC EXCLUSIVE India, China should join hands to deal with Trump tariffs and AI threat, says Liqing Zhang, a leading professor of finance

Liqing Zhang

India and China should work together to deal with global challenges, while keeping aside their differences, Liqing Zhang, Professor of International Economics at China’s Central University of Finance and Economics has told Moneycontrol.

"India and China are large economies. They should work together to deal with global challenges such as US tariffs, climate change and technological threats posed by artificial intelligence (AI)," Zhang told Moneycontrol in an exclusive interaction.

"In many areas we can help each other. India is now facing 50 percent tariffs from US. China has also been facing similar issues with US. The two countries, thus, can develop trade relations, and deepen investments relations further," Zhang said. At present, most Chinese goods attract a 30 percent import duty in US.

Zhang added that China is strong in some areas such as EV and renewable power panels, pointing to the fact that India can consider importing more from China. On the other hand, Beijing too can benefit from New Delhi’s strengths. "India, meanwhile, is very good at some service sectors, which can benefit China."

"China has been continuing reforms in the regulations of incoming foreign investments. I am not sure if India is that open," said Zhang.

The CUFS professor said in light of uncertain geopolitical environment, India and China can find ways to work together "regionally".

"I hope someday India rethinks about joining Regional Comprehensive Economic Partnership (RCEP), as it could be the most significant FTA for both the countries."

RCEP is a major trade pact among 15 Asia-Pacific countries, and is designed to deepen economic integration and establish common rules for trade and investment across the region. The agreement was signed in 2020, and its core aim is to progressively eliminate up to 90% of tariffs on imports between member countries over a period of about 20 years.

"China and India could be competing in many areas. If we can communicate much better, the conflict could be avoided," said Zhang.