China-India Friction Rises Amid Downturn

With US demand shrinking, China is looking to India to keep its exports buoyant and buy everything from iron ore to stuffed animals. But although China is its largest trading partner, India's not happy: this year it banned toy imports for safety reasons, and the country has lodged a dozen antidumping cases against China at the WTO. "It's a cause for worry," India's commerce secretary told the Wall Street Journal.

Officials from the two nations met yesterday in New Delhi to work through some of their differences. While trade has flourished between the two countries, tensions remain high; while China promotes exporting and global markets, India is more reluctant to open its industries to international competition. And the giant democracy of India often complains that its authoritarian neighbor tilts the playing field; as one politician said, "The fundamental problem is that China isn't a market economy." (More India stories.)