A Case for Enhanced China and India Economic Cooperation Post Global Economic Crisis: a Trade Bloc for Further Economic Growth

1. Introduction
Due to inherent spatiality of trade flows, and especially considering the influence of distance on trading level between two countries, it becomes an element of important inquiry for contemporary human geographers, focussed on international trade and commerce (Poon, 2009). Empirical studies using gravity equation have shown that trade flows decrease with distance (Rosso-Hansberg, 2005), and thus in general trade is higher between geographically proximate countries, for example, the level of trade between United States and Canada, which boasts the world’s largest bilateral trade (Poon, 2009). Krugman has shown that countries trade more with their neighbors than distant countries arising from lower transport and transaction costs (ibid), but somehow it seems to be not the case for the neighbours China and India.
The global economy has been characterized by major shifts in the pattern of international trade since the end of World War II (McDonald, Robinson, Sherman, & Thierfelder, 2008) - there has been tendency for groups of countries to create regional economic blocs to stimulate the process of market integration and trade (Cumbers, 2009). Over the post war period the global trade has expanded faster than the global GDP (McDonald, Robinson, Sherman, & Thierfelder, 2008).
There are two contrasting perspectives of regional integration: the first view emanates from mainstream economics, which highlights that reduction of trade barriers will facilitate a more efficient use of resources – productivity will increase, prices and costs will fall, stimulating greater growth and wealth overall (Cumbers, 2009). While the alternative perspective is associated with those working in Marxist and critical political economy traditions is that increased economic integration without social and political constraints is likely to lead to more uneven and differentiated development between countries and localities (ibid).
Countries have enhanced economic cooperation

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