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China and India, two of the worlds great civilizations, are now on the centre of the world

stage as economic powers. Both China and India show the potential of reshaping the future of
the worlds economy. The two countries hold more than one-third of the global population
and account for nearly 20 per cent of the world economy. By 2050, China and India are
expected to have become the worlds largest economies, with more than one-third of global
gross domestic product (GDP). Against the adverse global economic environment brought
about by the financial crisis, China and India economies maintained significant growth at
10.3% and 8.7% respectively in 2010. It has been widely predicted that both countries will
maintain this momentum of high growth in the coming years
Modern India is, in many ways, a success. Its claim to be the worlds largest democracy is not
hollow. Since independence in 1947, life expectancy at birth has more than doubled, and percapita income has grown fivefold. In recent decades, reforms pushed up the countrys once
sluggish growth rate to around 8 percent per year. The size of Indias middle class has
quadrupled over the past 15-20 years. Overall population growth has slowed considerably,
with large gains in per capita income. Indias demographics are beginning to resemble those
of the developed West - a move away from a high birth rate, overpopulation and predominant
poverty towards smaller families and increased average income. There still remains, of
course, a major issue of poverty and poor education.

India economic growth relies

considerably on a combination of growing domestic market demand and investment in


knowledge-intensive industry and services.
However, when we consider the extent of economic growth, comparisons favour China over
India. For years, Indias economic growth rate ranked second among the worlds large
economies, after China, which it has consistently trailed by at least one percentage point.
Despite India's impressive economic growth, China is still decades ahead of India in its
economy. China has directed massive investment into the creation of industrial capacity, with
increasing manufacturing efficiency, leading to increased productivity, aimed substantially at
export markets, which explains the made in China products that flood the global markets
today. The returns have funded education, healthcare and scientific research leading to further
economic growth. Chinas approach of accelerating development by expanding human
capability has largely succeded.

However, indias boom far more sustainable. due to its dependence on its own large
domestic market, india has been to a great extent insulated from downturns in global markets;

as Indias main earnings from exports have to depend only on a few sectors, like
information technology, whereas china, which relies heavily on export, is very vulnerable in

this respect.
Besides, its nondemocratic system of government renders its socio economic status a
very fragile character, where dissent of any form is dangerous, and major decisions are
taken only at the top. Also, India has made well-publicised progress in technical and

business education in the past twenty to thirty years. The Indian phenomenon has been
concentrated on engineering technology. We have seen the emergence of very effective and
internationally competitive software and I.T. community abound Bangalore.
If China and India work together to build a fair and equitable international economic
and financial system, it will promote a robust, sustainable and balanced growth of both
countries. Although the two countries are separated by the formidable geographical obstacles

of the Himalaya, Cultural and economic relations between China and India have been in
operation since ancient times. The Silk Road not only served as a major trade route between
India and China, but is also credited for facilitating the spread of Buddhism from India to
East Asia. Bilateral trade between the two countries has seen a significant growth in recent
times.
In June 2012, China stated its position that "Sino-Indian ties" could be the most "important
bilateral partnership of the century. That month Wen Jiabao, the Premier of China, and
Manmohan Singh, the Prime Minister of India, set a goal to increase bilateral trade between
the two countries to US$100 billion by 2015

there are formidable issues in the relationship between the China and India, which includes
their long-standing border dispute, reported Chinese military incursions into Indian territory,
and established heavy military infrastructure along border areas. However, in recent years,
China and India have shown that they are able to act jointly in multilateral settings whenever
their interests coincide. Through such joint endeavours, they have become increasingly
influential in the global arena, particularly in spheres such as global economic matters.
Diplomatic co-operation is necessary for a common prosperous future