Singh said both sides wanted to work towards creating an environment for greater economic interaction, calling for a "roadmap" for trade that would factor in "complementarities and competitive strengths".

"This has to include creating a level playing field by addressing such issues as non-tariff barriers, IPR (intellectual property rights) protection and market-related exchange rates," Singh told business officials.

All countries had to compete in a global market, he said, adding that "such competition is not inconsistent with cooperation, nor is it adversarial".

Singh meets his Chinese counterpart, Wen Jiabao, later on Monday for formal talks, following a private dinner between the two on Sunday night.

Bilateral trade in 2007 rose 56 per cent from a year earlier to $38.6 billion, according to China's Commerce Ministry.

But Trade Minister Kamal Nath, accompanying the prime minister, drove home his country's unhappiness that the trade balance was increasingly skewed in China's favour.

Nath, who held talks with Chinese Commerce Minister Chen Deming, said he had called on Beijing to lower barriers on imports of fruits and vegetables from India. He had also voiced the hope that China would approve a proposal from India's Jet Airways Ltd to fly from Mumbai to San Francisco via Shanghai.

Nath also raised the issue of China's taking years to register pharmaceuticals as a typical non-tariff barrier hindering India's exports.

China, for its part, complains of barriers to direct investment on the Indian side but, in a statement on the Commerce Ministry's Web site, encouraged Chinese companies to increase imports from India and said that over time their two-way trade would become more balanced.

DISTRUST

Singh began his visit on Sunday on a friendly note with visits to sites for the 2008 Olympics, which Beijing will host in August, including the Olympic Project Exhibition Centre, which displays models of the main venues.

Beyond trade, China and India also face common challenges on issues such as climate change and energy security.

But the neighbours must also break down historic wariness over China's traditional friendship with Indian archrival Pakistan, and a decades-long border dispute that flared into war in 1962.

Analysts say Singh's visit is unlikely to bring any breakthrough on the border dispute, which centres on China's claims to much of India's north-eastern state of Arunachal Pradesh. Beijing says the land is rightly part of Tibet.

"The Tibet issue is at the core of the India-China divide, and without Beijing beginning a process of reconciliation in Tibet, there is little prospect of Sino-Indian differences being bridged," said Khedroob Thondup, a member of the India-based Tibet government-in-exile.