Chinese and Indian officials have made progress in joint research on the feasibility of initiating a regional trade arrangement. The two sides met in Beijing for a two-day consultation and reached a basic agreement on cargo and service trade, investment as well as trade and investment facilitating measures.

The consultation was the fifth of its kind since March 2006, and the two countries planned to conclude the research at the sixth consultation meeting to be held in New Delhi by October, Wang said. The two sides would then decide whether to start free trade agreement (FTA) negotiations. The first four months had seen trade between China and India surge by 56.8 percent year-on-year, the highest among all the major trade partners of the world's fourth largest economy, to 11.4 billion U.S. dollars, according to Chinese customs statistics.

China has learned the importance of regional free trade agreements. During the first three years after the North American Free Trade Agreement was signed by the United States, Canada and Mexico in 1994, Mexico saw its exports of men's shirts to the United States soar by 122.9 percent while those of China declined by 38.1 percent. China is in talks with 28 countries and regions on regional trade arrangements and has already clinched an FTA with Chile and a cargo trade agreement with the Association of Southeast Asian Nations (ASEAN).