China and india economic relationship

China and India: Greater Economic Integration - China Business Review

china and india economic relationship

BEIJING, April 27 (Xinhua) -- Economic ties between China and India have become closer in recent years. The two economies are highly. China and India are trying to write a new page of the world economy to establish a stable and predictable bilateral relationship that would. WUHAN: As Prime Minister Narendra Modi and President Xi Jinping began their two-day summit, an official status report here on India-China.

India China: India, China forging close economic ties: Chinese media | India News - Times of India

Emerging investment linkages Unlike trade, levels of investment between China and India remain relatively low. FDI requires greater knowledge of and commitment to the host economy than trade and often follows trade linkages. Recent developments, however, suggest that bilateral FDI will likely see a sharp upswing over the next five years. Investment is rapidly entering a broader range of sectors, encompassing high-tech and low-tech industries, and leading companies in both countries have their sights set on global expansion.

Given the size and growth rates of the two economies, corporate leaders from each country have realized that a leading market position in the other economy is critical to pursuing global ambitions.

China and India: Greater Economic Integration

Recent business developments also reflect this trend: Shenzhen-based Huawei Technologies Co. The company also runs a manufacturing facility there. Deeper integration ahead, but distrust lingers Two developments could lead to even greater momentum for Sino-Indian economic integration.

Larger companies in both countries are increasingly acquiring third-country companies that already have a presence in China and India.

For example, Tata Steel Ltd. As more third-country acquisitions materialize, investment linkages between India and China will deepen. A second possibility is that Chinese capital could help India accelerate its infrastructure revolution.

china and india economic relationship

China has an abundance of capital looking for attractive investment opportunities. Not all is smooth sailing, however. The recent global economic crisis, which has slowed economic growth in China and India, appears to have exacerbated the severity of these concerns. Over the last 24 months, India has issued several antidumping measures against products such as yarns and fabrics, nylon tire cords, and aluminum products from China.

Both governments appear keen to resolve these issues through mutual discussions rather than taking them to the WTO, however. A major obstacle to bilateral investment that needs to be bridged is one of lingering distrust stemming from the brief war of and unresolved border disputes. In an example of this distrust, in Julythe Indian government prevented companies from China and two other countries from investing in port infrastructure projects in the country for security reasons.

It is important to note, however, that well-established mechanisms exist that enable parties that do not fully trust each other to do business. In the coming decade, it may be possible for tens of billions of dollars from China to find their way into India. After all, if China and Japan, which have far greater emotional tensions attached to their relationship, can forge strong economic ties, why not China and India, which have led a far more harmonious relationship for over 2, years?

Companies must decide how best to leverage the growing power and economic integration of these two economies. To do so, companies can: China's construction of a military post and helicopter pad in the area in and India's grant of statehood to Arunachal Pradesh formerly the North-East Frontier Agency in February caused both sides to deploy troops to the area.

china and india economic relationship

The PRC relayed warnings that it would "teach India a lesson" if it did not cease "nibbling" at Chinese territory. By the summer ofhowever, both sides had backed away from conflict and denied military clashes had taken place. A warming trend in relations was facilitated by Rajiv Gandhi 's visit to China in December India and the People's Republic of China agreed to achieve a "fair and reasonable settlement while seeking a mutually acceptable solution" to the border dispute.

Factbox: Facts, figures about China-India economic ties - Xinhua |

Rajiv Gandhi signed bilateral agreements on science and technology co-operation, establish direct air links, and on cultural exchanges. The two sides also agreed to hold annual diplomatic consultations between foreign ministers, set up a joint committee on economic and scientific co-operation, and a joint working group on the boundary issue.

The latter group was to be led by the Indian foreign secretary and the Chinese vice minister of foreign affairs. Progress was also made in reducing tensions on the border via mutual troop reductions, regular meetings of local military commanders, and advance notification about military exercises.

Consulates reopened in Bombay Mumbai and Shanghai in December InThe sixth-round of the joint working group talks was held in New Delhi but resulted in only minor developments. Prime Minister Narasimha Rao and Premier Li Peng signed a border agreement dealing with cross-border trade, cooperation on environmental issues e.

PollutionAnimal extinctionGlobal Warmingetc. A senior-level Chinese military delegation made a goodwill visit to India in December aimed at "fostering confidence-building measures between the defence forces of the two countries. In JanuaryBeijing announced that it not only favored a negotiated solution on Kashmir, but also opposed any form of independence for the region.

Talks were held in New Delhi in February aimed at confirming established "confidence-building measures", discussing clarification of the "line of actual control", reduction of armed forces along the line, and prior information about forthcoming military exercises.

China's hope for settlement of the boundary issue was reiterated. Talks were held in Beijing in July and in New Delhi in August to improve border security, combat cross-border crimes and on additional troop withdrawals from the border.

These talks further reduced tensions. The Centre serves as the representative office of the Republic of China Taiwan and is the counterpart of the India-Taipei Association located in Taiwan. Both institutions share the goal of improving India-ROC relations, which have been strained since New Delhi's recognition of Beijing in Sino-Indian relations hit a low point in following India's nuclear tests. InChina was one of the strongest international critics of India's nuclear tests and entry into the nuclear club.

During the Kargil War China voiced support for Pakistan, but also counseled Pakistan to withdraw its forces. Nathu La was re-opened in following numerous bilateral trade agreements. The opening of the pass is expected to bolster the economy of the region and play a key role in the growing Sino-Indian trade. Chinese officials were in a quandary on this issue as any protest to India on the issue would mean an explicit endorsement on India's governance of Sikkim, which the Chinese still hadn't recognised.

InChina officially recognised Indian sovereignty over Sikkim as the two countries moved towards resolving their border disputes. Inthe two countries proposed opening up the Nathula and Jelepla Passes in Sikkim.

Wen stated that the 21st century will be "the Asian century of the IT industry. Issues surrounding energy has risen in significance.

Both countries have growing energy demand to support economic growth.

china and india economic relationship

InChina and India re-opened Nathula pass for trading. Nathula was closed 44 years prior to