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Asia's Great Game
India-China Rivalry Isn't Stopping Growing Trade Ties

India and China have several open border disputes and a growing military rivalry, but that isn’t stopping them from trading: China is India’s biggest foreign market, and bilateral trade was worth $65 billion last year. On Monday, representatives of the two countries sat down in Beijing to discuss how they can trade even more by improving India’s train tracks to better move Chinese goods. LiveMint has the story:

The working groups covered areas such as infrastructure, mainly the railways, and operationalizing agreement for service centres to be set up in India for Chinese power equipment, environment and resources protection, water management and policy coordination, collaboration on planning and urbanization, and cooperation in high technology, including the IT sector.

Officials said the working group on infrastructure will focus on collaboration in strengthening the existing tracks in India to increase speed of the trains.

A fidelity to mercantilist policies and the drive to maintain astronomically high growth rates has helped bilateral trade outweigh the growing political and military rivalry between the two countries, for the time being. Even as both countries increase their military budgets, manufacture and import more weapons, and work on regional alliances to one-up each other, they continue to work on improving their economic relationship.

This is in both countries’ interests. Better infrastructure and faster trains will mean better distribution for Chinese goods and greater connectivity for Indians. More trade may also help keep relations cordial by making a confrontation costly.

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  • Anthony

    “China is India’s biggest foreign market, and bilateral trade was $65 billion last year.” Some call it benefit of gentle commerce ( a classic positive-sum game in economic life where for India and China everybody wins and incentives change) that mitigates what Feed describes as rivalry…

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