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Indo-Chinese deal is good news

In November, Barack Obama returned from Delhi with $10bn worth of deals with Indian business. China’s premier, Wen Jiabao has gone one better. The agreements Mr Wen struck this week in India total $16bn. The burgeoning of India and China’s economic ties is important and welcome. A similar improvement in their political relations would be better still.

Of course, economic relations are not perfect. Although it has increased by a factor of 230 in the past 20 years, bilateral trade is still low at $60bn. It is also unbalanced: China runs a huge surplus in its dealings with India. And Delhi frets that the relationship is semi-colonial: India sends China raw materials, which it returns as manufactured goods. These problems, however, are not insurmountable for determined politicians.

But even without political help, economic links are bound to improve. Apart from being neighbours, China and India account for 40 per cent of the world’s population. As their economies grow, it is inevitable that Asia’s twin giants will do ever more business.

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