The relationship between India and China will be the world's most important this century, a senior Indian diplomat told Xinhua in an exclusive interview in Beijing.

"Both China and India should regard each other's rise as an opportunity, not a challenge," Indian Foreign Secretary Nirupama Rao said, citing Chinese Premier Wen Jiabao's and Indian Prime Minister Manmohan Singh's comments at the East Asia Summit in October that "there is enough space for India and China to grow together."

Rao said India and China have learned lessons in the six decades since the two countries established diplomatic relations, in 1950, and have a foundation to further improve ties.

"We have had times of difficulty in the relationship, at certain points of time. But despite those difficulties, we managed to raise the level of our dialogue and strengthen our cooperation to create an architecture for dialogue between our two countries. That should be the basis for what we do in the future," Rao said.

Asked about biased coverage of China in some Indian media, Rao said: "There are many schools of thought in India on any given issue. But the common dominator when it comes to relations with China is that we want to build a stable relationship, a productive relationship, a relationship where we can talk to each other frankly as friends and look at the issues that remain to be resolved."

Rao called for deeper mutual understanding at the grassroots level of the two societies.

"We should study each other objectively without subjectivity. Chinese young people should visit my country, travel around and study India's fascinating culture more closely," Rao said.

"We must understand that the relationship between India and China is going to be, in my view, the most important relationship in the 21st century," Rao added.

Rao said the G20 summit in Seoul, the Republic of Korea was fruitful with its many achievements, especially the putting of development issues onto the G20 agenda.

"The fundamental imbalance in the world economy is the developmental imbalance between rich and poor countries. It is very good for developing countries and emerging market economies like India and China to have the development issue on the G20 agenda," Rao said.

Rao called on the United States to be responsible as the world's largest economy.

"The health of the U.S. economy impacts the global economy. We hope the U.S. economy will revert back to a path of growth. But any measures taken (by the U.S.) should not lead to any destabilizing capital flows in the world market. The U.S. cannot create a problem for all of us in managing our economies," Rao said, citing the U.S. decision to conduct a second round of quantitative easing, which injects liquidity into world markets.

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