China, India meet to focus on trade, despite mistrust

The leaders of India and China meet this week to try to boost trade and soothe tensions between two nations accounting for more than a third of humanity and crucial for driving global economic growth.

Wen Jiabao's three-day visit from Wednesday is the first by a Chinese premier in four years. He will be accompanied by more than 400 business leaders.

"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.

China's ambassador to India said he was hopeful that free trade talks could start, but there is some skepticism 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.

"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 December 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.

China and India plan to sign a series of business deals, including one agreed in October for Shanghai Electric Group Co to sell power equipment and related services worth $8.3 billion to India's Reliance Power.

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 percent of its exports to China.

In contrast, manufactured goods -- from trinkets to turbines -- form the bulk of Chinese exports