A survey by the Confederation of Indian Industry (CII) identified the information technology (IT), pharmaceutical and biotechnology sectors as particularly promising.

It sought to identify investment opportunities and help Indians to understand the Chinese market better ahead of Mr Vajpayee's trip from Sunday to June 27.

Coinciding with that will be a visit to Beijing and Shanghai by a 30-member delegation of Indian chief executive officers, led by CII president Anand Mahindra.

The CII survey said: 'China is a highly complex but profitable economy for companies operating in knowledge-based sectors, and the best time to enter China is now.

'Indian companies should enter China's market as soon as possible to best take advantage of China's exponential economic growth. Delayed entrance will be difficult and costly.'

The survey said the size of the Chinese IT market is expected to grow to about US$90 billion (S$155 billion) in 2006 from US$40 billion this year.

'The Chinese market has been hardware driven so far and local software companies are able to meet only 50 per cent of domestic requirements,' it said.

Its pharmaceuticals sector is expected to triple in size to US$24 billion by 2010, the survey said.

Indian multinational companies with 'superior research and development capabilities and experience in marketing, distribution, and sales' were the 'best-positioned' to move into this market.

In biotechnology, the Chinese government's devotion to developing its nascent life science industry and research guaranteed a long-term, growing demand for reagents.

'Currently, China is incapable of producing the high-quality reagents necessary for the level of research its government demands.

'China must therefore rely on imports over the long term. The reagent market is expected to grow more than 60 per cent annually,' the survey said.

It identified five types of reagents as promising - immuno-blotting, Sanger sequencing, in situ hybridisation, chromosome mapping, and bacteriophage plaque. Their sales in China were worth US$2 million in 2001.

The CII also plans to set up an 'India Club' in Shanghai, develop a India-China joint chief executive officers' forum and host a high-tech show and 'Made in India' show in Beijing in October.

Mr Vajpayee will address a joint India-China business meeting in Beijing during his visit, the first in a decade by an Indian prime minister, to boost the US$5 billion trade between the two countries.

He will also discuss other matters in an effort to develop 'trust, understanding and confidence' between the two Asian giants.

China's Ambassador to India, Mr Hua Junduo, writing in The Hindu, said: 'History will eventually prove that China and India are partners and not rivals.'