New Delhi: Chinese Premier Wen Jiabao begins a three-day visit to India on Wednesday, trying to boost trade and soothe tensions between the two fastest-growing major economies in the world.
Wen's visit is the first by a Chinese premier in five years. He will be accompanied by more than 400 business leaders, underscoring the growing commercial ties of countries which, between them, house more than a third of the world's population.
"Impressive business delegations have accompanied Barack Obama and David Cameron, but when the Wen circus rolls into town with 100 of China's top tycoons, the red carpet needs to be a bit longer," said a commentary in the Hindustan Times on Wednesday.
"Let trade do the talking, other issues that add to the trust deficit will hopefully get addressed on the way."
The two countries, one-time rivals who went to war in 1962, are now entwined by their booming trade relationship and rising global clout. Both have stood together to resist Western demands in world trade and climate change talks.
Closer economic ties are driving much of the goodwill. China is now India's largest trade partner and two-way trade reached $60 billion this year, up from $13.6 billion in 2004.
"Economic ties constitute literally the bedrock of our relations ... Both sides are keen to further enhance mutually
beneficial trade and are looking at new initiatives," said an
Indian foreign ministry spokesman on Monday.
But although both nations have said they are exploring a possible free-trade agreement, no real progress is expected on that front as there is some scepticism in New Delhi that Beijing may only want to dump cheap manufactured goods on India's booming $1.3 trillion economy.
While the two are often lumped together as emerging world powers, China's GDP is four times bigger than India's and its infrastructure outshines India's dilapidated roads and ports, a factor that makes New Delhi wary of Beijing's growing might.
FRAGILE RELATIONS
The trade relationship is also overlaid with political and strategic rifts.
"Relations are very fragile, very easy to be damaged and very difficult to repair. Therefore they need special care in the information age," China's envoy to India, Zhang Yan, told reporters in New Delhi.
While India and China have cooperated on global issues such as climate change, they have clashed over China's close relationship with Pakistan and fears of Chinese spying. A longstanding border dispute also divides them.
India fears China wants to restrict its global reach by possibly opposing its bid for a permanent U.N. Security Council seat or encircling the Indian Ocean region with projects from Pakistan to Myanmar.
But India knows it must engage China as both nations exert their global clout. Wen's trip comes a month after U.S. President Barack Obama's visit. French President Nicolas Sarkozy and British Prime Minister David Cameron also visited India this year.
Assistant Chinese Foreign Minister Hu Zhengyue said on Monday that everything would be up for discussion during the Dec. 15-17 visit to New Delhi.
Wen then travels straight to Pakistan, India's nuclear armed rival, for another two nights.
"No issues are off the table," Hu told reporters in Beijing on Monday, adding the visit was to expand bilateral trade, increase cooperation and promote regional peace and stability.
In the days leading up to Wen's trip, China and India have signed a series of business deals.
Chinese telecoms gear maker Huawei, whose imports were banned by India only in May over spying fears, said on Tuesday it aims to invest more than $2 billion in India over the next five years.
India's Anil Dhirubhai Ambani Group (ADAG) will sew up about $3 billion in loans from Chinese banks, while Reliance Communications will sign an accord with China Development Bank for a $1.93 billion, 10-year loan.
Still, total investment by China in India is small, amounting to only $221 million in 2009, representing only about 0.1 per cent of China's total outward foreign direct investment stock in that year.
That figure is seven times less than what China has invested in Pakistan, according to data from China's Ministry of Commerce.
India has sought to diversify its trade basket, but raw materials and other low-end commodities such as iron ore still make up about 60 per cent of its exports to China.
In contrast, manufactured goods - from trinkets to turbines - form the bulk of Chinese exports.