Reflections on China-India Economic and Trade Relations from the Perspective of Industrial Structure

Abstract

China and India are adjacent to each other and are the top two developing countries in the world in terms of population, and the different industrial structures of the two countries have a specific impact on the economic and trade cooperation between the two countries. The article firstly analyzes the industrial structure of China's strong industry and India's strong service industry and the status quo of bilateral trade, and summarizes the problems of small trade volume, unidirectional dependence between India and China, political hostility hindering economic and trade cooperation, and the two countries' industries' complementarities are greater than competitiveness through calculations and comparisons. Based on the theory of industrial complementarities, the article proposes accordingly to increase intra-industry trade, improve the investment environment, encourage investment and technological cooperation, participate in the global value chain, set up a free trade zone and strengthen the cooperation in multilateral mechanisms, and establish a free trade zone. The establishment of free trade zones and the strengthening of economic and trade cooperation in multilateral mechanisms are six proposals.