If India further opens its market, the trade volume of the two countries is bound to increase dramatically, said Hu of the CICIR. In that case, India's trade deficit with China will also surge. Manufactured products from China such as daily commodities and electric appliances are highly competitive in the Indian market, whereas the goods that India could supply to China-with the exception of raw materials-have yet to be researched, he said.

Echoing Hu's view, Rong said India's soaring trade deficit with China might undermine China's long-held principle of boosting economic ties to fuel political ties. Addressing the trade imbalance calls for concerted efforts from both China and India, Qin said. The Chinese Government attaches great importance to India's concerns, he added. For example, it has organized trade promotion initiatives such as exhibitions to make Indian products better known to Chinese companies. China also welcomes more investment from Indian companies and is ready to create a fair and transparent investment climate for them. The regional trade arrangement to be discussed also will facilitate trade between the two countries and help India expand its investment in China, Qin said.

At the same time, China hopes India makes its products more competitive in the Chinese market by changing its export structure to meet the needs of Chinese consumers. It also hopes India cancels restrictions on Chinese companies seeking to invest in India and recognizes China's market economy status, Qin said.

As the two countries' industries are highly complementary, they will be able to find a mutually beneficial approach to cooperation, Hu said. He also suggested that the two countries form joint ventures to compete in the international market with their advantages in low production and labor costs.

India and China should make the most of their corresponding strengths in trade and business, Singh said in a speech at the Chinese Academy of Social Sciences. India's growing consumer market, skilled labor, ability to produce excellent software together with China's large market, manufacturing expertise and low production costs have laid the foundation for even more growth in their economic relations, he said.

India would like to learn China's success in building physical infrastructure, strategies to provide productive employment outside the agriculture sector and poverty alleviation, he said. He also identified science and technology, public health, education, institution building, water resource management and disaster management as areas for potential cooperation.

Since China-India relations have matured and become institutionalized, the two countries are confident about working with each other, said CICIR's Hu. The border issue is unlikely to affect their global cooperation, although it will not be resolved in the near future, he said.

The two countries' leaders have recognized the importance of their bilateral relations and will not allow unpredictable events to harm their overall development. However, they will see to it that they do not become engaged in hostile competition over political influence, trade opportunities and energy as they branch out into the international arena, Hu added.

During their meeting, Wen invited Indian President Pratibha Patil to visit China in 2009, while Singh invited Wen and Wu Bangguo to visit India. The two countries' foreign ministers are to visit each other's countries some time this year. With these high-level visits scheduled following Singh's visit, China-India relations are poised to move into the fast lane, Rong said.

Chinese Premier Wen Jiabao reached the following consensus with Indian Prime Minister Manmohan Singh:

- Increase high-level visits to enhance mutual political trust.

- Have the two countries' foreign ministers visit each other's countries in 2008 and hold the fourth round of China-India Strategic Dialogue within the year.

- Expand the scope of mutual investment; improve the two countries' cooperation in fields such as energy, science and technology and environmental protection; explore the possibility of starting talks on a regional trading arrangement between the two countries; and raise the trade target set for 2010 from $40 billion to $60 billion.

- Expand people-to-people and cultural exchanges; establish a Sino-Indian exchange fund; continue to organize the visits of 100-member youth delegations to each other's countries; and jointly hold India Festival and China Festival in 2010.

- Strengthen military exchanges and defense dialogues and carry out the second joint antiterrorism training.

- Enhance the two countries' coordination on international and regional issues to jointly deal with traditional and non-traditional security threats.

Source: Xinhua News Agency

Flourishing Relations

China-India relations have undergone all-round improvement and rapid development in recent years. Chinese Premier Wen Jiabao visited India in 2005 when the two countries announced they would set up a strategic and cooperative partnership for peace and prosperity. During Chinese President Hu Jintao's visit the following year, China and India issued a joint declaration that laid out a 10-point strategy for the two countries' cooperation to further deepen and consolidate their strategic and cooperative partnership.

Sonia Gandhi, President of India's ruling Congress Party and leader of the United Progressive Alliance, visited China in October 2007, becoming the first foreign political leader China received after the 17th National Congress of the Communist Party of China. In 2007, the leaders of the two countries also held meetings on important international occasions, including the outreach session of the Group of Eight Summit and the East Asia Summit.

China and India have strengthened their cooperation in trade, defense and other fields. The trade volume between the two countries reached $34.2 billion from January to November 2007, up 54 percent from the same period of the previous year. China is currently India's second largest trading partner, whereas India is the 10th largest trading partner of China. They conducted the first joint antiterrorism training between their armed forces in Kunming in southwest China's Yunnan Province in December 2007. The year also marked the China-India Friendship Through Tourism Year.

China and India have maintained close coordination in regional and international affairs. Mechanisms such as the strategic dialogue and antiterrorism dialogue have provided important channels for two-way communication. The two countries have reached extensive consensus on climate change and energy security. Leaders of both countries have reiterated that Sino-Indian relations have transcended the mere concept of bilateral ties to become internationally significant.

Progress has been made in resolving the sensitive issues in China-India relations. The two countries' special representatives for the border issue held three meetings in 2007, during which they had constructive discussions on formulating a framework for settling the issue.