In the Joint Declaration issued during the visit of the Indian Prime Minister to China in June 2003, it was agreed that China and India will launch a financial dialogue and cooperation mechanism to strengthen the dialogue and coordination in the financial sector. A MoU was signed between People's Republic of China and Republic of India on the launch of the financial dialogue during Chinese Prime Minister's visit to India in April 2005.

The first meeting of the China-India Financial Dialogue was held on 7th April 2006 at New Delhi, India. Both sides emphasized the important role the Dialogue has played in strengthening mutual understanding and cooperation in macroeconomic and financial areas of the two countries, and promoting bilateral relation in general. The two sides regarded the meeting as a concrete contribution to the year of China-India Friendship in 2006, and expressed their determination to maintain the momentum in their relationship in the field of economic and financial cooperation.

Macroeconomic issues

Both sides deliberated at length upon the global and Asian economic prospects. Despite expressing satisfaction at the current pace of global economic expansion, both sides expressed concerns over the downside risks to future global expansion, primarily in the form of high energy prices and growing global imbalances. The two countries also felt that removing roadblocks to global trade in goods and services was a key factor in future global growth. Accordingly, they urged the international community and the developed nations in particular, to strive harder for a successful outcome of the ongoing multilateral trade negotiations.

Strategies for sustainable growth

After closely reviewing mutual economic performance and outlook, both sides agreed that given their current growth levels, China and India, will play a key role in shaping future global growth. They also agreed that both countries should continue this momentum and sustain the current high rates, which was a prime necessity for tackling the problems of poverty and unemployment. In this regard, the two sides reiterated their commitment to achieve the Millennium Development Goals (MDGs). The two sides exchanged views on various growth strategies, ongoing social sector programmes and the role of fiscal policy in promoting equitable growth in the regard.

Financial Sector Developments

Both sides reiterated their commitment to pursuing policies as appropriate to each country for promoting growth while maintaining macroeconomic and financial stability, thus facilitating and strengthening bilateral economic ties. They exchanged information on their respective monetary policies in the context of the changing external environment; on financial sector policies; and on designing improvement in access to finance for infrastructure, agriculture and SMEs, while furthering the cause of financial inclusion. It was agreed to share experiences and hold consultations in the context of tremendous scope in both countries in the area of financial sector regulations, in particular relating to employment generation, infrastructure development and social security. The two countries also have scope to work together on the development of sound regulatory and supervisory policies based on international best practices and their adoption b! est suited to the region.

Both sides expressed happiness in sharing their economic experience and carrying cooperation to areas of growing relevance in today's economic order. They stressed the need to continue the Dialogue further.