India-China Trade Tensions Rise

But underneath what seems like a traditional and simple trade dispute -- India protecting its growing toy market from cheap foreign imports -- lies nearly a decade of Indian and Chinese mistrust, envy, and even complex geopolitics, say experts. Although India and China are still growing, both economies are hurting badly from the global recession. Sino (Xetra: XTP.DE - news) -Indian trade grew as much as 33% in 2008, to nearly $52 billion, according to data maintained by China's General Administration of Customs, but that's tiny compared with the $425 billion bilateral trade between China and the European Union, or the $333 billion trade between China and the U.S. As both countries experience growth rates of 7% or less, compared with 9% for India and over 10% for China before the financial crisis hit, there is an increased rivalry between them, especially when it comes to sectors where both have strong domestic manufacturers, such as steel, petrochemicals, and textiles.

India-China Trade Tensions Rise