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China, India trying to play nice

Miranda Kennedy Nov 20, 2006

KAI RYSSDAL: China and India are two of the world’s fastest growing economies. So, when Chinese President Hu Jintao arrived in India today, there was a lot to talk about. Trade between the countries will likely top $20 billion this year. In another 15 years or so, trade between China and India alone could account for almost a fifth of the world’s GDP. As rosy an economic picture as that is, it doesn’t mean the relationship is worry free. Miranda Kennedy reports from New Delhi.

MIRANDA KENNEDY: India exports iron ore to China — lots and lots of it — to feed China’s massive energy needs. What it gets back is cheap Chinese products like batteries and shirts — so cheap that Indian companies complain they can’t compete. Roughly 80 percent of anti-dumping cases filed by the Indian government have been against China.

China has gripes too: It claims India blocks licenses and worker visas to stymie Chinese investment.

BRAHMA CHELLANEY: It’s part of the two sides’ agenda to put the accent on cooperation, which is a good thing. But I think that doesn’t hide the fact that in the long run the India-China relationship will be one of managed competition.

Brahma Chellaney, with the Center for Policy Research in New Delhi, says the competition goes a lot deeper than trade. India and China still nurse the wounds of a 1962 war. A long-running border dispute has bred a deep distrust.

CHELLANEY: The only way India can deal with China is by becoming more prosperous and by growing stronger. Growing trade and investment does not signify political progress. It is naive to believe that growing trade can allay India’s security concerns.

For proof, he says, just glance at President Hu’s schedule. After three days here, he heads to Pakistan, India’s nuclear-armed enemy. China is expected to agree to sell Pakistan civilian nuclear technology, just days after the Senate passed a bill that would let the U.S. sell the same technology to India.

In New Delhi, I’m Miranda Kennedy for Marketplace.

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