China, India meet to focus on trade, despite mistrust

By Sui-Lee Wee and Henry Foy

NEW DELHI, Dec 14 (BestGrowthStock) – The leaders of India and
China meet this week to try to boost trade and soothe tensions
between two nations accounting for more than a third of
humanity and crucial for driving global economic growth.

Wen Jiabao’s three-day visit from Wednesday is the first
by a Chinese premier in four years. He will be accompanied by
more than 400 business leaders.

“Economic ties constitute literally the bedrock of our
relations… Both sides are keen to further enhance mutually
beneficial trade and are looking at new initiatives,” said an
Indian foreign ministry spokesman.

China’s ambassador to India said he was hopeful that free
trade talks could start, but there is some scepticism in New
Delhi that Beijing may only want to dump cheap manufactured
goods on India’s booming $1.3 trillion economy.

While the two are often lumped together as emerging world
powers, China’s GDP is four times bigger than India’s and its
infrastructure outshines India’s dilapidated roads and ports,
a factor that makes New Delhi wary of Beijing’s growing might.

“Relations are very fragile, very easy to be damaged and
very difficult to repair. Therefore they need special care in
the information age.” China’s envoy to India, Zhang Yan, told
reporters in New Delhi.

While India and China have cooperated on global issues
such as climate change, they have clashed over China’s close
relationship with Pakistan and fears of Chinese spying. A
longstanding border dispute also divides them.

India fears China wants to restrict its global reach by
possibly opposing its bid for a permanent U.N. Security
Council seat or encircling the Indian Ocean region with
projects from Pakistan to Myanmar.

But India knows it must engage China as both nations exert
their global clout. Wen’s trip comes a month after U.S.
President Barack Obama’s visit. French President Nicolas
Sarkozy and British Prime Minister David Cameron also visited
India this year.

Assistant Chinese Foreign Minister Hu Zhengyue said on
Monday that everything would be up for discussion during the
Dec. 15-17 visit to New Delhi.

Wen then travels straight to Pakistan, India’s nuclear
armed rival, for another two nights.

“No issues are off the table,” Hu told reporters in
Beijing on Monday, adding the visit was to expand bilateral
trade, increase cooperation and promote regional peace and
stability.

China and India plan to sign a series of business deals,
including one agreed in October for Shanghai Electric Group Co
to sell power equipment and related services worth
$8.3 billion to India’s Reliance Power .
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India has sought to diversify its trade basket, but raw
materials and other low-end commodities such as iron ore still
make up about 60 percent of its exports to China.

In contrast, manufactured goods — from trinkets to
turbines — form the bulk of Chinese exports.
(Writing by Alistair Scrutton)

China, India meet to focus on trade, despite mistrust