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        <hl1 id="Headline" class="1" style="Headline" MainHead="true">
          <lang class="3" style="Headline" font="Patrika18" fontStyle="Bold" size="15">Trade imbalance to cast shadow on China-India talks
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          <lang class="3" style="Byline" font="Patrika18" fontStyle="Bold" size="15">REUTERS, Beijing/new Delhi
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      <p style=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">Chinese Premier Wen Jiabao faces a tough task when he arrives in India next week to allay New Delhi's fears over China's rise as a global power, and to smooth tensions in an often-fractious relationship.
</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">Wen plans to spend Dec 15-16 in New Delhi, after which he will travel to Pakistan, India's closest rival, for another two nights.</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">Despite a boom in bilateral commerce in the past decade and cooperation on global issues such as climate change, India and China remain suspicious of each other's growing international clout and influence.</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">"The relationship is a mixture of third-world solidarity and strategic rivalry. Those two elements are here to stay," said Jean Pierre Cabestan, an international relations professor at Hong Kong Baptist University.</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">"But India will need to balance China's growing power even more tomorrow than today."</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">The growing economic interdependence between China and India is likely to head Wen's agenda forthe trip.</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">Analysts say he could announce more Chinese investments in India or lower trade barriers to assuage the worries of Indian politicians, peeved that the Sino-Indian trade balance is heavily in China'sfavour.</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">India's deficit with China could reach $24-25 billion this year, said Srikanth Kondapalli, head of East Asian studies at Jahawarlal Nehru University.</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">The deficit rose to $16 billion in 2007-08, from $1 billion in 2001-02, according to Indian customs data.</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">Prime Minister Manmohan Singh is likely to press Wen for reassurances that China will open its market wider, especially in value-added sectors such as financial services and information technology.</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">China is India's biggest trading partner, with bilateral trade expected to pass $60 billion this year.</lang>
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      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">But even with greater market access, it is likely to be a long time before India can close the trade gap.</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">"I don't see the deficit narrowing rapidly," said Dibyesh Anand, an international relations professor at London's University of Westminster. "Even if tariffs are lowered</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">on manufactured products, India can't compete with China on manufactured products."</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">TRADE IMBALANCE</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">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.</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">In contrast, manufactured goods — from trinkets to turbines—form the bulk of Chinese exports.</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">In an illustration of India's dependence on Chinese manufacturing, Shanghai Electric Group Co agreed in October to sell power equipment and related services worth $8.3 billion to India's Reliance Power.</lang>
      </p>
      <p class=".Bodylaser">
        <lang class="3" style=".Bodylaser" font="Patrika15 Ultra" fontStyle="Bold" size="130">Even if India and China are the world's two largest emerging economies, the development gap between them remains large, due in part to a decade's head start for Chinese economic reforms. "India's at a phase of capital expenditure that is 15 years behind China. That's just the way it is," said Chetan Ahya, a Morgan Stanley economist in Singapore.</lang>
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