¡¡¡¡Recent years have seen continual growth in the importance of China and India in the world's economy and their increasing influence on regional and even global political and economic development. Average GDP growth for China exceeded 15.6% between 2000 and 2007, while India's GDP growth averaged 6.5% from 2000 to 2005. In 2008, it is generally expected that China's GDP will continue to grow at a rate of around 10% as against roughly 9.4% for India. And both economies seem quite assured of further sustained growth in the next 10-15 years, which will only create more suitable conditions for the advancement of bilateral relations.

¡¡¡¡China opens more market to India

¡¡¡¡Bilateral trade between China and India experienced a sharp increase in the period of 2000-2007 from US$2.914 billion to US$ 38.647 billion in value, averaging an annual growth of 44.7%.
¡¡¡¡The import of minerals and export of mechanical and electric products represent 58% of the total import and export of both countries, which indicates that their trade structure remains simple. Products that take a second place for both countries include chemicals and textiles for China and pearls for India, which are however likely to be traded on a larger scale in the future.
¡¡¡¡In comparison, India has a far greater reliance on China in trade.
¡¡¡¡Currently, China's market is more open to India than India's to China. Indian investors have also been quite active in China, especially in such fields as high-end software, biomedical technology and labour-intensive processing and manufacturing etc. And the list is still being expanded steadily. By contrast, Chinese investors in India have always been treated in a way that smacks of discrimination, and it has been pretty hard for domestic appliances and computer hardware from China to enter the Indian market.

¡¡¡¡Checks and balances in competition

¡¡¡¡Due to historical reasons and external conditions, the economic and trade relationship between China and India has often been more competitive than complementary.
¡¡¡¡At present, China, more than any other Indian trade partner, is heavily mired in the throngs of anti-dumping cases in India. From 1994, when the first case was launched against China, to July 31, 2006, as many as 98 cases had been launched, which, involving altogether US$760 million, accounted for no less than 47.3% of all such cases registered in India. India's official regulations forbid foreign investment in all strategic, defence and aerospace research projects, but fails to clarify such projects in any concrete manner. As a result, Chinese investment is often turned down under the pretext of national safety. This only means India is somewhat biased against China's development, and that is obviously detrimental to mutual cooperation.
¡¡¡¡An analysis of the general structure of foreign trade of both countries reveals a distinctly competitive nature. Both regard developed countries in Europe and India as their major trade partners, and competition has been particularly tough for each on certain products (textiles for example). Though pursuing different strategies, both are yet tailoring their development to the same target in future: India is working hard on infrastructure construction and manufacturing, while China, trying to maintain what it has achieved in manufacturing, is paying more attention to service. But both are forced to greatly develop labour-intensive industries to ease the pressure of employment. Having the same goal in sight means only one thing: they will become competitors in even more areas in the future.
¡¡¡¡What's more, growing support from certain developed countries to India has further worsened the current state of competition between China and India. The United States has deepened its economic dialogue since the two became strategic partners. And their joint statement on high-tech business strategy clearly shows only one per cent of all exports from the U.S. to India require official approval, and no offical approval is required at all for certain vital technologies that can be used for both military and civil purposes. Europe is now the second largest trade partner of India after the U.S., and the India-EU summit has greatly promoted their mutual cooperation.
¡¡¡¡Moreover, India has also become a focus in foreign relations development for Japan in recent years, and the two have formed a Special Economic Partnership to strengthen cooperation in IT, Industry Park construction and high-tech industries etc, which makes India the largest beneficiary of Japanese aid and one of its important investment areas in Asia.
¡¡¡¡To China, India is important both as a potential market and a destination for investment. The first challenge therefore involves further strengthening exchange and cooperation with the various levels of Indian administration and enterprise, to increase India's understanding of China's economic development to remove India's cautious guard and bias against China, to raise mutual political trust and, on that basis, to continue the active development of a China-India Free Trade Zone, enhance mutual cooperation in energy, agriculture and infrastructure facilities, improve the business environment, bring into full play each other's advantages and probe a new model for trade and economic  cooperation for both.

¡¡¡¡Link  The Progress of China-India Cooperation
¡¡¡¡Economic and trade cooperation between China and India started in the 1950s. But following the conclusion of the "China-India Trade Agreement" in 1984, economic and trade relations between the two countries had been in a poor state of stagnancy. The conclusion in 2003 of the "China-India Memo on the 'Bangkok Agreement'" and mutual discussions on the launch of a China-India Free Trade Zone in 2004 however laid a sound foundation for future development. In Jan. 2005, China and India held their first strategic dialogue. In April that same year, the "Joint Statement of China and India" created a strategic partnership for the two nations, marking the entry into a new stage of development in bilateral relationship. In Nov. 2006, during President Hu Jintao's visit to India, the two again issued a "Joint Declaration", which further deepened the partnership with "10 strategies", and signed 13 other cooperative agreements, including the "Agreement On Promoting Investment And Trade". And On Jan. 13-15, 2008, during the visit of the Indian Prime Minister to China, leaders of the two countries reached a further 10 common conclusions.