ABSTRACT
The movement of people, ideas, and goods are the most important forms of interaction between nations. Asia’s biggest neighbours and two of the oldest living civilisations, China and India, have had such contact for centuries. Yet, bilateral economic relations as understood in the modern world are a relatively recent phenomenon. By 2014, China has become India’s biggest trade partner. 1 However, this rapidly growing trade is skewed, with India mainly exporting raw materials to China and importing manufactured goods. The political dissonance that the burgeoning trade deficit has caused needs to be addressed. China and India have been able to find common cause on a variety of international issues and are likely to be equally concerned about regionalism in world trade, with the United States seeking to establish a trans-Pacific and trans-Atlantic free trade area that would exclude both countries. China–India economic relations will be characterised by, according to Prime Minister Manmohan Singh, elements of “coordination, cooperation and competition”. 2 It is easy to see why the economic relationship between the two continental neighbours has been limited and sporadic over the centuries and till recently. It is equally easy to predict that the recent spurt in this relationship will continue in the foreseeable future. However, the two countries will have to address new challenges that have come up at the bilateral, regional, and global level.
