Chinese PM Wen Jiabao begins bumper Indian trade trip

The potential of the two economies is enormous

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Chinese PM Wen Jiabao has begun a three-day official visit to India to boost trade between the two Asian giants, whose relationship is dogged by mutual distrust.

Mr Wen - the latest world leader to visit India recently - has been joined by some 400 Chinese business leaders.

China is India's largest trading partner - two-way trade volumes are set to hit $60bn (£38bn) this fiscal year.

The two nations fought a brief border war in 1962.

Tensions remain over their shared 3,500-km (2,170-mile) border decades on from the conflict, in which China is widely considered to have prevailed.

Analysis

China and India account for nearly 40% of the world's population, and represent two of the three largest economies in Asia.

How these two giants cope with their near-simultaneous emergence as major international players is of huge importance to the world. In the recent past, it has also been convenient for both to emphasise co-operation as a counterweight to what both saw as something of an Americo-centric world.

But that moment seems to have passed as the US has looked increasingly constrained. Beijing is clearly wary of Delhi's growing relationship with Washington, and with other Asian nations.

For Delhi, there's concern about Beijing's interest in South Asia and its relationship with Pakistan. There is perhaps also a self-consciousness that China is widely seen very much as the senior player of the two of them.

For both, there's a legacy of tensions, including an outstanding border dispute. But for the moment, they seem intent on trying manage this complex and crucial relationship.

Mr Wen - who last visited India five years ago - brings with him one of the largest teams of Chinese business leaders ever to visit India.

He said that he hoped his visit would promote friendship between India and China and deepen their relationship.

"There is enough space in the world for the development of both China and India and there are enough areas for us to cooperate," he told a business conference in Delhi.

On Wednesday, the Chinese PM visited a school to discuss Chinese culture - a week after the Indian government decided to add Mandarin to the languages taught in schools.

The chinese delegation dwarfs the number of trade chiefs led in recent weeks to India by US President Barack Obama (215), French President Nicolas Sarkozy (more than 60) and British Prime Minister David Cameron (about 40).

The Chinese premier will hold talks on Thursday with his Indian counterpart Manmohan Singh, External Affairs Minister SM Krishna and the ruling Congress party chief Sonia Gandhi.

"We are, from the Indian side, looking at the positive side of the outcome. The trade is growing between the two countries, the people-to-people exchanges are increasing, high-level visits are also increasing," Mr Krishna told Indian TV.

In October the Chinese premier told Mr Singh on the sidelines of a regional meeting in Vietnam that there was enough space in the world for both countries to develop.

Persistent disputes

Later this week, Mr Wen will travel to India's nuclear-armed neighbouring rival, Pakistan, for a two-day official visit.

Beijing is co-operating with Islamabad on missile development, cross-border infrastructure and a deep-water port.

Chinese Prime Minister Wen Jiabao arrives in Delhi on 15 December 2010 Wen Jiabao is to visit a school to discuss Chinese culture

Ties between China and India, the world's two most populous countries, have been dogged by persistent territorial and trade disputes.

Their relations have been particularly tense over the last year, says the BBC's Sanjoy Majumder.

Beijing complained in 2009 about visits by the Indian prime minister and exiled Tibetan spiritual leader the Dalai Lama to the north-eastern state of Arunachal Pradesh, which China claims in full.

China is strongly critical of India for granting residence to the Dalai Lama.

Though their bilateral trade is booming, the relationship is not benefiting India as much as it might, say analysts.

Delhi has been demanding greater access to Chinese pharmaceutical and IT markets as it seeks to level a large trade surplus in China's favour of up to £25bn.

INDIA-CHINA TRADE

  • China became India's largest trading partner in 2008
  • Bilateral trade to hit $60bn this year
  • By 2050, they are tipped to be the world's two leading economies
  • India's top exports to China include ore, fabrics, copper, precious stones and metals
  • China's top exports to India are machinery, iron and steel, fertilisers and silk

China's envoy to India, Zhang Yan, told reporters ahead of Mr Wen's visit: "Relations are very fragile, very easy to be damaged and very difficult to repair. Therefore they need special care in the information age."

Ties between the two countries were strained again in August when India cancelled defence exchanges after China refused a visa to a Kashmir-based general.

Last year, India protested against the Chinese practice of issuing visas to people from Indian-administered Kashmir on separate pieces of paper, unlike the standard visas it offered to other Indians. China gave no explanation for the move.

Russian President Dmitry Medvedev is due to visit India later this month, when agreements on various areas, including civil nuclear, defence, space and trade, could be signed.

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