Bilateral trade between India and China opened on Monday through the fabled Silk Road, reported the Hindustan Times.

“Border trade was earlier scheduled to open on May 1 but was postponed after Beijing requested New Delhi to delay the start following landslides in the Tibet Autonomous Region,” said Ujwal Gurung, Sikkim’s director of industry and commerce.

“Formal trade for the current year began on Monday and would continue until Nov 30,” Gurung told IANS.

The two Asian giants in July 2006 reopened trade across the 15,000-ft Nathu La Pass, 52 km east of Sikkim’s capital Gangtok, as part of a broader rapprochement. The move marked the first direct trade link between the nuclear-armed neighbours since a bitter border war in 1962.

Under an agreement reached between the two countries, trade takes place four days a week - Monday to Thursday - beginning May 1 each year and lasting until Nov 30 when snow makes the area impassable.

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Brazil, Russia, India and China, the world’s biggest emerging market economies or the BRIC countries, last week vowed to turn their four-way group into a powerful instrument for changing the world, affirming their global economic clout reported The Hindu. On the last day of their meeting in Yekaterinburg, in the Ural mountains, the BRIC countries institutionalised BRIC, agreeing to hold regular meetings at the level of Foreign Ministers.

They “confirmed the aspirations of the BRIC countries to work together with each other and other states in the interests of strengthening international security and stability foreign ministers from the BRIC countries said in a joint communique”, reported Reuters.

Russia’s Foreign Minister Sergei Lavrov said BRIC would work to “support global stability and ensure uninterrupted and manageable global development.”

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Foreign Ministers of Russia, India and China met for the eighth time in Yekaterinburg, Russia to reaffirm their commonality, in views on the global situation and, for the first time, set out coordinated positions on Kosovo, Iran, Afghanistan and the Asia-Pacific region, The Hindu reported.

Russian Foreign Minister Sergei Lavrov said a joint communique on boosting links between the three large developing countries would look at enhanced co-operation on humanitarian aid, fighting terrorism and combating drug trafficking.

“I believe that against the backdrop of a multi-polar world it is necessary to advance cooperation between Russia, China and India, the three countries that are rapidly growing and enjoying strong economic growth,” said Chinese Foreign Minister Yang Jiechi.

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India China trade seems to me to be soaring like a kite tied to the ground.

While both countries celebrate having achieved a trade target of US$40billion set for 2010 in 2008, there are still only 120 companies of Indian origin registered wth the Indian embassy in Beijing, and even fewer companies of Chinese origin registered with the Chinese embassy in New Delhi.

While businessmen in both countries express a desire to do business in the other, barriers - social, political and financial seem to be keeping them at bay. Of the difficulties that Chinese firms face while doing business in India, Reuters reported - Chinese firms have found profits in India hard to come by. Tax barriers are everywhere, eroding their cost advantages. Corruption is rampant, adding another layer of difficulty. And Chinese goods have a low-quality image that is very hard to shake.

The challenges are not unique to India. Most are exactly what western companies encountered when they first arrived in China some 20 years ago. But Chinese companies, whose success so far has been largely built on their home-court advantage and low costs, are much less prepared to tackle those issues. 

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A benchmark variety of Thai rice, a food stable across much of Asia, is at about US$1,000 a tonne, up threefold from last year. Meat prices have risen by 60 percent in Bangladesh in the year ending in March, and by 45 percent in Cambodia and 30 percent in the Philippines. The rise in global food prices has sparked riots last month in Egypt and Haiti, protests in other countries and restrictions on food exports in Brazil, Vietnam, India and Egypt.

In the first months of 2008, food price inflation has hit double digits in Bangladesh; People’s Republic of China (PRC); Hong Kong, China; Indonesia; Pakistan; and Viet Nam. Food price inflation is also rising in India, Malaysia, Philippines, Singapore, and Thailand. And although no 2008 figures are yet available for Sri Lanka, there is little doubt that food prices are also rising at double digits there as well. Wheat-dependent countries in Central and West Asia are also experiencing double-digit rates of food inflation says an Asian Development bank report on rising food prices.

The problem is not confined to importing countries, as net exporters are also experiencing food price inflation. In fact, the rising inflation pressure has been more intense in net exporting countries.

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In its report titled “Emerging Asian Regionalism,” the Asian Development Bank said Asia will account for as much as 35 percent of world gross domestic product (GDP) in purchasing-power parity [PPP] terms, from only 28 percent in 2005. By then, Asia’s GDP is set to be more than 50-percent larger than the European Union’s or North America’s.

While continued growth will reinforce the region’s market-led integration, official cooperation, production and financial markets integration, economic interdependence and inclusive and sustainable growth will need to intensify based on sound economic principles.

The report highlights that Asia is less integrated in finance than in trade but financial markets are now larger, deeper, and more sophisticated than they were a decade ago. The ADB Study urges policymakers to strengthen supervision, surveillance and dialogue on financial markets through creation of a new, high-level “Asian Financial Stability Dialogue.”

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As China’s voracious demand for iron ore rises, the country demands a more stable, long term pricing policy from India.  India which currently meets 16 percent of China’s iron ore demands sells iron ore on a spot basis, allowing the price to fluctuate as demand grows. India is China’s third largest supplier, after Australia and Brazil, who supply over 60 percent of their iron ore to China at contract prices, which allowed shipping costs to remain ‘relatively stable.’

‘Last year India’s spot sales to China led to additional costs of US$838.3 million for Chinese steel makers,’ Luo Bingsheng, executive vice chairman of the China Iron and Steel Association told Forbes.

Now, China plans to take serious action to make sure iron ore prices are more stablized. China will have to consider reducing purchases of iron ore from India if Indian suppliers do not moderate their ‘over-reliance’ on spot sales, he added.

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Its been a long march since Thomas Friedman declared the world to be flat. Now, it seems as economies grow larger and countries struggle to gain control of depleating natural resources national  barriers are rising.  

A story by the wall street journal says that the global economy appears to be entering an epoch in which governments are reasserting their role in the lives of individuals and businesses. Once again, barriers are rising. Call it the new nationalism.

The report goes on to say: Just a decade ago, Asia, Latin America and Russia were on financial life support from the International Monetary Fund and World Bank. The U.S. was planning yet another round of global trade negotiations. The European Union was writing a constitution to shift power to Brussels from member nations.

Now borrowers shun the IMF and World Bank. Trade talks are shelved. Barriers to foreign investment are rising around the world. State-owned companies are expanding, particularly in oil and gas. Public support of immigration restrictions is growing in countries from the U.S. to India.

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The quest for natural gas has brought age old enemies India and Pakistan to seek an agreement, allowing a pipeline from Iran to bring energy to Pakistan and India.”I am very optimistic about the IPI (Iran, Pakistan, India) pipeline as it would go a along way in meeting India’s energy requirements in the long run,” Petroleum and Natural Gas Minister Murli Deora told The Hindu on Sunday. The US$7.4 billion , 2,700-km-long pipeline is scheduled to be completed by 2011 and would initially carry 600 million cubic metres of gas per day.

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Long before Oxford, Harvard or MIT ever made their mark on the global academic stage, Nalanda University in Bihar, (north-east India) attracted students from across Asia. Founded in 427 in northeastern India, not far from what is today the southern border of Nepal, and surviving until 1197, Nalanda, meaning Giver of knowledge in Sanskrit was one of the first great universities in recorded history. It was devoted to Buddhist studies, but it also trained students in fine arts, medicine, mathematics, astronomy, politics and the art of war.

The university was an architectural and environmental masterpiece. It had eight separate compounds, 10 temples, meditation halls, classrooms, lakes and parks. It had a nine-story library where monks meticulously copied books and documents so that individual scholars could have their own collections. It had dormitories for students, perhaps a first for an educational institution, housing 10,000 students in the university’s heyday and providing accommodations for 2,000 professors. Nalanda was also the most global university of its time, attracting pupils and scholars from Korea, Japan, China, Tibet, Indonesia, Persia and Turkey.

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