IDEAS home Printed from
   My bibliography  Save this paper

The Rapidly Deepening India-China Economic Relationship


  • John Whalley
  • Tanmaya Shekhar


In this paper we focus on the rapidly deepening bilateral India-China economic relationship. Each is deeply integrating into the global economy through trade and FDI inflows, China is seen as primarily manufacturing-lead growth with India as service-lead growth (see Rodrick & Subramanian (2006)). An alternative view is that India is effectively a lagged version of China, and the two have to be considered a joint global presence. India and China are thus viewed in the literature in different comparative mode. That their bilateral closeness is deepening is evident in a number of areas. On the trade front, India-China bilateral trade has increased by a factor of 33 between 1995 and 2007, and this growth has occurred at an accelerating rate. This compares with a 7 fold increase in the China’s overall trade this period. With bilateral FDI the increase is even more dramatic, around 90 fold over the same period, but admittedly from a small base. And while strategic issues remain between India and China since they are complicated by the relationships of each other with Pakistan, on bilateral economic policy coordination there has also been considerable joint movement towards joint positions. There has been a feasibility study for a possible India-China FTA. They have also jointly agreed a bilateral pact on climate policy underpinning their joint negotiating stance in Copenhagen in 2009 on a post Kyoto global climate regime; and in international forums such as the WTO (and specifically in the Doha Round) both countries have supported each others’ positions, and especially so in key meetings such as in July 2008 in Geneva.

Suggested Citation

  • John Whalley & Tanmaya Shekhar, 2010. "The Rapidly Deepening India-China Economic Relationship," CESifo Working Paper Series 3183, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_3183

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Srinivasan, T. N., 2004. "China and India: economic performance, competition and cooperation: an update," Journal of Asian Economics, Elsevier, vol. 15(4), pages 613-636, August.
    2. Wei, Wenhui, 2005. "China and India: Any difference in their FDI performances?," Journal of Asian Economics, Elsevier, vol. 16(4), pages 719-736, August.
    3. Barry Bosworth & Susan M. Collins, 2008. "Accounting for Growth: Comparing China and India," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 45-66, Winter.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Elsayyad, May & Konrad, Kai A., 2012. "Fighting multiple tax havens," Journal of International Economics, Elsevier, vol. 86(2), pages 295-305.

    More about this item


    India; China; deepening; trade; FDI; policy coordination;

    JEL classification:

    • F10 - International Economics - - Trade - - - General


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_3183. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.