A complex India--China relationship today reflects efforts by both governments for over twenty years to improve relations frozen since 1962. The boundary question has not yet been resolved, however, and China's recent assertiveness along its periphery combined with accelerating military capabilities causes anxiety in India. China worries about India's new partnerships with the United States and Japan. Meanwhile, the economies of both grow rapidly with increasing exchanges of goods and services. The two governments have learned to manage differences. The future relationship between these two Asian giants will be bright if they can cooperate in their shared neighbourhoods, but dark if mistrust and rivalry dominate perceptions.