China is selling to India a range of manufactured products at prices that defy competition, is installing high-tech companies and buying up others that are in difficulty, and submitting tenders for port modernisation projects. Faced with this onslaught, India is being circumspect: naturally it wants to develop relations with its northern neighbour, but wants to be able to control them, and to settle the frontier questions. Citing security problems, it is being reticent about overly liberal trans-Himalayan and maritime exchanges, and is keeping China at arm’s length from its port modernisation programme. On the other hand, India is allowing some of its big industrial groups to set up in China, where it is expanding in the banking sector.