New Delhi, Dec 13 (IANS) Ahead of Chinese Premier Wen Jiabao's visit, India and China Monday ruled out rivalry as Beijing gave assurances of addressing the yawning trade deficit and hoped that "the dragon and the elephant" would not allow their boundary dispute to affect growing business ties between the two countries.

Describing the India-China ties as "one of the most important relationships of the 21st century", Foreign Secretary Nirupama Rao envisaged "a competitive and collaborative relationship" between the two continent-sized neigbours.

"There is space for us to compete in a healthy manner," she said while calling for more synergy and interaction between industrial and business communities of the two countries.

"China takes a positive view of India's rise and sees India's rise as an opportunity," Chinese ambassador Zhang Yan added, setting the tone for the three-day visit of the Chinese premier to India starting Wednesday.

The envoy hoped that the Chinese premier's visit would map out a roadmap for the development of bilateral relations.

Prime Minister Manmohan Singh will hold talks with Wen Thursday and discuss ways to expand the bilateral relationship and convey New Delhi's concerns over Chinese stapled visas for Indian citizens of Jammu and Kashmir and the widening trade deficit between the two countries.

China and India are taking an increasingly important role in formulating international roles and are cooperating over global issues, including the financial crisis, climate change, food and energy security, the envoy said.

"We have achieved much, but we can do much more. There are no fundamental differences and conflicts," he added.

"I am confident that the world's factory and the world's office will work together. I am confident that the dragon and the elephant can work together and prosper together," he said.

The Chinese envoy, however, warned that relations between the two countries "are fragile and can be damaged easily".

"China-India relations are very fragile and very easy to be damaged and very difficult to repair. Therefore, they need special care in the information age," he said.

"To achieve this, the government should provide guidance to the public to avoid a war of words. Without trust, there can be no genuine relations," he said at a round-table meeting of experts organised by the FICCI.

"People are at the heart of this relationship," Rao said while calling for both sides to be "innovative, imaginative and creative" in taking the relations forward.

The Chinese envoy also allayed India's concerns over the widening trust deficit, estimated to be $19.2 billion, and pitched for greater trade and investment, including opening of Chinese banks in India.

"China does not purposely seek trade surplus with other countries. In the long run, a wide trade gap is not healthy and tenable," said Zhang.

"The development of diversified trade, tourism and investment cooperation would be crucial for reducing the trade imbalance (currently in favour of China) and achieving the bilateral target of $60 billion this year," he said.

The trade imbalance and investment-related issues will figure prominently in discussions between Manmohan Singh and Wen. Around 400 top Chinese businessmen are accompanying the Chinese premier in search of deals.

"Trade deficit is huge, estimated to be $19.2 billion. This is more than the GDP of many countries," Amit Mitra, secretary general of FICCI, told IANS.

Pressing India not to let the border issue stand in the way of developing closer ties, the envoy called for starting the process of moving towards a regional free trade agreement (FTA) along with effective measures to remove trade and investment barriers.

The envoy added that while 10 Indian banks were operating out of China, no Chinese bank was operating in India. However, he expressed the hope that the Industrial and Commercial Bank of China would be given permission soon to start work in India.

Rao agreed on the need for scaling up trade and investment between the two continent-sized neighbours.

"We need greater synergy and dialogue to explore the lessons that we could draw from the Chinese model of infrastructure development for the benefit of the business and engineering community of the countries," she said.