There is little give by either side on critical issues. Firstly, while Jintao's neutral demeanor has been cited by many as proof of China's acceptance of the Indo-US civilian issue, there is nothing that the Chinese have said that would indicate their acceptance and support in the Nuclear Suppliers Group (NSG). Even if China were to agree, many feel that they will bargain hard and extract concessions from both India and the US. Even as Jintao made some vague references to cooperating with India in the civilian nuclear space, his concrete proposals to Pakistan to assist building 2 reactors at Chasma each capable of producing 300 megawatt and another six down the road is a clear indication on Chinese intention.

Secondly, while China talks a lot of peaceful coexistence, it has offered cruise and ballistic missiles, electronic warfare capabilities, naval, and air weapons to Pakistan at astoundingly cheap prices. During Jintao's visit, the two nations announced collaboration to produce airborne early warning surveillance system in addition to announced development of JF-17 Thunder fighter aircraft with Chinese aviation company CATIC. Pakistan is to get the first batch of 8 medium technology fighter jets from China next year and local manufacture of aircraft will commence from January 2008.

Thirdly, while agreeing to settle the border dispute peacefully, China continues to demand large tracts of Indian territories while occupying other sectors such as the Aksai Chin with impunity. It demands these territories overtly while India has stuck to protocol and raised the border issues only privately.

Fourthly, while both nations have expressed desire to double their trade, India exports to China has been limited to mostly raw materials such as iron ore. With reduced access to Chinese markets and an inherent disadvantage in manufacturing, it is not clear what the composition of Indian exports would be. On the other hand, China has signed a free trade agreement with Pakistan (India rightly refused to sign one with China) allowing it to create a special economic zone near Lahore and a textile zone in Faisalabad and boost bilateral trade four times to USD 15 billion. This agreement will also allow large Chinese investments in Pakistan (again, India is refusing to allow unfettered access) in infrastructure and industries bring a qualitative transformation of Chinese economic presence in South Asia. Apart from opening up trade with Pakistan, China also has become Bangladesh's largest trading partner last year thereby directly challenging India's economic influence in the region. Besides, China plans to use Pakistan as a stage to address business and trade in Iran and Afghanistan.

Fifthly, China's relationship with Pakistan is set to expand on energy too to include hydro power, coal fired generation, and new alternate sources of energy therefore developing a new strategic depth based on energy with Pakistan. It is very likely, that China will try to develop such relationship with all of India's neighbors. This is part of China's strategy to invest heavily abroad and focused on energy and oil and gas sector.

Though these differences persist, the two nations are on a global competition for economic, political, and military stardom. China, which has a head start by a decade over India in its liberalization, is doing well on many economic parameters. However, there is clear sign that India is catching up fast enough to prompt Bank of America to project that India will overtake China in 25 years. With a large young and educate population, expanding markets, well globally integrated financial system, rule of law and independent judiciary, functioning democracy with robust institutions, and a large English speaking population, India has the right tools in place to realize this prophecy but has still many hurdles to overcome.