India-China ties at a crossroads
By Ali Muthu,WNS New Delhi Correspondent
NEW DELHI - When Hu Jintao arrives in India on Monday it will mark the start of the first visit here by a Chinese president in a decade. It's a measure of how relations between the two Asian giants have been captive to years of mistrust, mutual suspicion and rivalry. But a growing trade relationship between two of the world's fastest growing economies is challenging traditional mindsets and is encouraging vastly improved ties. Trade between the two countries is expected to touch $20bn by next year - in the 1990s it hovered around the $250m mark. Many view the economic relationship between the two as complementary rather than competitive.
While India has the resources to satisfy China's growing appetite for raw materials such as iron ore, steel and plastics fuelling its massive manufacturing industry, China can provide manufacturing expertise and investment in infrastructure. Many Indian IT firms, the country's growth industry over the past decade, have already established offices in China. But for two countries which have ambitions of being the unrivalled regional superpower, it is only natural that economics is often undermined by politics. Indian industry complains that China needs to be far more transparent in its dealings - for instance, they argue that there are hidden subsidies in China allowing its products to be priced far lower than the competition. There are also fears that China is flooding India with low-quality consumer goods - a fact that is illustrated vividly by a trip to any Indian market where Chinese-made clothes, furniture, electronic goods and even firecrackers are widely available. "But many of these goods are far lower in quality than what the Chinese sell to the West, including the United States," a top industry official says, refusing to be named.
But China has its own concerns. It says Delhi is blocking investment in areas such as ports and telecommunication, citing security concerns. While India denies it discriminates against Chinese investment, a recent internal report prepared by the country's national security council argued for new legislation to monitor investment from countries which could pose a risk to national security, including China.
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