NEW DELHI — Asia’s two fast-growing economies - India and China - have looked at ways to deepen economic ties as they battle a global slowdown. A territorial dispute between the two countries, however, continues to be an irritant.
Wrapping up the second strategic economic dialogue in New Delhi on Monday, Indian and Chinese officials signed agreements to step up cooperation in areas such as railways, energy, environmental protection and information technology.
Indian and Chinese officials also agreed to coordinate strategies in areas of common interest, such as reform of the international monetary and financial systems and climate change.
Balancing trade
The two countries say it is important to raise their level of economic engagement in the current global economic situation.
The head of the Indian delegation, Montek Singh Ahluwalia, stressed the need to make their trade more balanced.
Trade between the two countries has boomed over the past decade, reaching $75 billion last year. It is heavily skewed in China’s favor, though, with the trade deficit totaling $40 billion. India exports mainly raw materials, like iron ore, while China sells cheap manufactured goods in Indian markets.
Alka Acharya, professor of Chinese studies at New Delhi’s Jawaharlal Nehru University, said the two countries want to broaden the economic relationship.
“We are looking at joint investments, joint ventures, more investments by China into infrastructure and how do we actually make the trade basket much more comprehensive than it is now. This has clearly come onto the priority,” said Acharya.
Boundary dispute
India wants greater market access in areas such as services, information technology and pharmaceuticals - areas in which its companies have a strong edge. China wants India to make it easier for Chinese workers to get visas.
Though the economic relationship is flourishing, differences over a long-running boundary dispute continue to trouble the Asian neighbors. India claims 16,000 kilometers of Chinese-controlled territory in the Himalayas, while Beijing claims the Indian state of Arunachal Pradesh, which adjoins Tibet.
Days before the economic dialogue was held, India began issuing visas to Chinese visitors with maps showing the two disputed territories as its own.
It is a tit-for-tat action by New Delhi against China, which shows the disputed regions as part of its territory in new e-passports it is issuing.
The two countries have failed to resolve the boundary dispute despite 15 rounds of talks. However, their blossoming economic relationship is expected to help keep ties between the Asian giants on an even keel in the coming years.