India- China: Enduring Links

Balancing India and China
Among the most encouraging recent developments in India China Economy and India-China ties is the rapid increase in bilateral trade. A few years ago, India Inc had a fear of being swamped by Chinese imports. Today, India enjoys a positive balance of trade with China. But major industry players in India feel there is no need to give the Chinese a free ride into the domestic market so early. This is particularly, when India and China have been directly competing across several product categories. And that too, when both the applied and bound import tariffs are higher in India compared with China. Indian industry's ambivalence over the proposed Indo-China FTA stems from concerns over previous FTAs signed by the government. There's a feeling that some of these FTAs were signed in haste, and without adequate homework. Result: There has been confusion about the country of origin issue as well as the items to be put in the early harvest lists.
Balancing India and China

Competition will Continue
Energy has been a source of both cooperation and competition between China and India in recent years. They are two of the world's fastest growing energy consumers, with China importing about 40 percent of its energy needs and India 70 percent. China has consistently outbid India in the fight for energy sources. These bidding wars have inflated prices for energy assets, prompting the two sides to agree to joint bidding in third countries. To this end, they signed a "Memorandum for Enhancing Cooperation in the Field of Oil and Natural Gas" in January.

Their energy competition is also reflected in their assertions of naval power. As India reaches into the Malacca Straits, Beijing is creating a "string of pearls" surrounding India by developing strategic port facilities in Sittwe (Burma), Chittagong (Bangladesh), and Gwadar (Pakistan) to protect sea lanes and ensure uninterrupted energy supplies. India is wary of China's efforts to engage its South Asian neighbors in military and economic matters. Some Indian analysts believe that China is pursuing a two-pronged strategy of lulling India into complacency with greater economic interaction while taking steps to encircle India and undermine its security.
Competition will Continue
Related Reading:
India-China Relations: The Way Forward by Nirupama Rao

Tailpiece: Essential difference between China and India
In China the criminals are made citizens and in India citizens are made criminals. India badly needs Electoral and Police Reforms, else catching up with China is impossible!