New Delhi:
India and China should be partners, not competitors, as the world tilts toward Asia, Prime Minister Wen Jiabao of China said Wednesday in a speech here to hundreds of businessmen from both countries, his first stop on a three-day tour.
"There is enough space in the world for the development of both China and India," Mr. Wen said, "and enough areas for us both to cooperate."
The countries are in the "process of rapid industrialization and urbanization" built on a foundation of fast and sustainable growth, he said. Now, they should "open our markets to each other so we can give strong support to each other's economic growth."
Trying to play down competition between the two countries, Mr. Wen said China and India should "draw upon each other," because they have a different mix of industries, products, technologies and expertise.
Mr. Wen arrived with 300 business executives from China, many of whom cheered when he took the stage in a ballroom in a New Delhi hotel, then pulled out cellphones to snap his photo.
"The 21st century is the Asian century," he said. "It is also the century in which China and India can make great achievements."
As the visit began, a handful of deals were finalized or announced between companies from the two countries.
Huawei, a leading Chinese manufacturer of telecommunications equipment, said Tuesday that it planned to spend $2 billion to expand its Indian operations over the next five years, including a research and development campus in Bangalore that would employ 1,000.
Companies in the Reliance ADA Group, the Indian conglomerate controlled by Anil D. Ambani, said Wednesday that they would receive financing from Chinese banks totalling about $3 billion, much of which would be used to buy goods from Chinese companies.
Reliance Power, the group's energy company, said in October that it would buy boilers, turbines and generators for its coal power plants worth $10 billion from the Shanghai Electric Group. On Wednesday, a company executive said it had secured financing for part of that deal from Chinese banks, while Reliance Communications said it would get a $1.9 billion loan from China Development Bank.
But while Indian and Chinese politicians speak of closer ties, diplomats from both sides played down expectations of any significant trade announcements or groundbreaking partnerships between the world's most populous nations.
The Chinese ambassador to India, Zhang Yan, speaking in New Delhi on Monday, dubbed the relationship between the two countries "very fragile," while the Indian foreign secretary, Nirupama Rao, spoke vaguely of the need for the countries to move toward "congruence and cooperation."
India and China are home for more than a third of the world's population, share a 2,500-mile border and are expected to drive global economic growth for years to come. But ties between the two have been dampened by mistrust and even open hostility. The two countries have tussled over land and water rights, and more quietly over questions of intellectual property and employment visas.
Economically, "India and China both can rise, but there are a lot of conflicts," said Ramgopal Agarwala, a former World Bank economist in China who is now a senior adviser to RIS, an emerging markets research organization in New Delhi. "Both sides want to sort them out, but no one knows how."
Business ties were frayed this year after Indian officials effectively banned the import of Chinese telecommunications equipment, citing security concerns, and clamped down on the percentage of overseas workers that foreign companies could hire in India, a response to Chinese companies' bringing in Chinese workers to build power plants in India.
Chinese companies that have set up in India, like Lenovo and Huawei, have recorded disappointing profits and problems with distribution networks and bureaucracy, analysts say.
China's foreign direct investment in India is minuscule compared with that from the United States and Britain, and is dwarfed even by countries like Finland and Cyprus. From April 2000 to September 2010, Chinese foreign direct investment in India was $52 million compared with $9 billion from the United States, according to Indian government figures.
"From the Indian side, there has been a lot of suspicion of the strategic intentions of state-owned Chinese enterprises," said Jonathan Holslag, a research fellow at the Brussels Institute of Contemporary China Studies. "Over all, it has been very difficult for Chinese companies to get their share of the Indian market."
That does not mean that economic ties are nonexistent. Bilateral trade between the two countries is set to reach $60 billion in India's current fiscal year, up from $42 billion in the fiscal year that ended last March, and China is India's largest trade partner. Still, that relationship strongly favors Beijing - India exported $11.6 billion to China in the last fiscal year.
Where and how to fix that imbalance is unclear, analysts and economists in India say.
Chinese officials have said they would like to see a trade agreement between the two countries, but Indian officials say there are too many concerns about subsidies in the Chinese market that could influence prices.
When it is all over, perhaps the most important thing that can come from the visit this week is a plan to do it again, sooner, analysts said.
"I hope there will be a greater interest in knowing each other," Mr. Agarwala, the RIS adviser, said. "In my judgment, that would be a very concrete result."