India China economic cooperation present scenario and future direction

Abstract

The two largest countries in the world in terms of population; two of the fastest growing economies globally; home to the largest trained manpower worldwide; ancient civilizations; present regional powers and potential global powers- the commonalities between India and China are indeed many. But so are the differences. The starkly different political systems, the varying approaches to development and liberalization, the role of foreign investments all set the two countries apart. For the past few years, economists, policy makers, analysts and businessmen in the two countries and also across the world have been excited with the enormous possibilities the economies of the two countries present in terms of trade. Though some of them remain skeptical and suspicious of the Indo-China relationship, there is greater optimism than ever before. There are several reasons for this. Relations between the two countries have been traditionally strained, with the 1965 war and the border dispute a sore point between the two countries. However, over the past few years, the two countries have tried to mend the relationship. The process started in the late 80s with the then Prime Minister, the late Rajiv Gandhi’s historical visit to China. It gathered further momentum with the ‘Look-East’ policy adopted by India in the 90s. On its part, China too has been actively trying to overcome differences with Asian countries like Japan and India with the realization that it cannot be remain dependent on the West for trade and investment. The result has been the growing opportunities for trade between the two countries.