Study On China-india Potential Trade Cooperation

Economic globalization and regional economic integration coexist in thecurrent world. In order to seek to maximize the regional economic benefit, manycountries is beginning to shift to the cooperation of regional economic integration,when it is difficult to promote global integration further. India and China are closeneighbors in Asia, which are two largest developing countries in the world, thepopulation of the two countries accounts for more than half of the Asian totalpopulation, which provides a huge potential market. This article analysis theSino-Indian trade cooperation, the barriers between those two countries and theprospect of the potential trade cooperation. In the study, we have collected the latestdata, by analyzing them in the qualitative ways of the indexes of Degree of TradeConnection,（TCD），the index of Revealed Comparative Advantage（RCA）andTrade Complementarity Index（TCI）. The study concludes that the China-India tradecooperation has a solid foundation and there is great potential space to mine.However, the economic and non-economic constraints of trade still exist, such astariff barriers, non-tariff barriers and border disputes. Generally speaking, thecomplementarity of the trade between China and India overwhelm the competitionof it. The paper proposes the following methods to deepen the cooperation betweenthem. Firstly, China and India should build political mutual trust, secondly, choosesome important areas to implement priority cooperation, thirdly, promote theestablishment of the free Trade Area of the Sino-Indian on the basis of the"Asia-Pacific trade Agreement".fourth, lower trade barriers and reduce tradefriction, fifth, improve the environment of investment,strengthen the cooperation ofservice trade and FDI.