Despite a closer relationship in the diplomatic front and a fast growing bilateral trade, the two Asian economic giants are still competing on many issues. Divergent economic and industrial strategy, competition on energy sourcing, and competing interests in their participation into regional forum (ASEAN, Shanghai Cooperation Organisation) makes difficult for the two countries to build a strategic partnership. Beyond the cliché on a possible cooperation between “the factory of the world” ( China ) and “the office of the world” ( India ), Chinese and Indian firms are competitors both on their respective internal market as well as on global markets. Despite a fast growing bilateral trade, some protectionist reaction are arising in India against a Chinese proposal in favour of a free trade zone agreement made by President Hu Jintao during his last State visit to India last November. Nevertheless, as the two countries are going to weight in the coming future a significant part of the Asian and the world trade and investment, the evolution of their economic and political relationship will have a great impact in the region.