RelevanceAccording to the World Economic Outlook of the International Monetary Fund (IMF), advanced economies with deficits will have to compensate for the decrease in domestic demand with an increase in international exports. Emerging markets such as China and India will offset the shift from international markets to their own domestic markets. The IMF has also predicted that China will surpass the US economy by 2015 and that India will reach the same size as the US economy by 2020 (International Monetary Fund (IMF), 2011). It is clear that the continued expansion of the economies of China and India positions them as dominant economic forces with which multinational enterprises will have to compete for market share in China, India, emerging markets and domestically. Professor Khanna in his article China + India the Power of Two highlights the importance of companies gaining competitive advantage not only by viewing China and India as separate countries, but by developing business strategies that view China and India as major trading partners. Professor Khanna supports his position with the following four key points: history, country analysis, cultural relations and successful companies (Khanna, 2007). HistoryAfter 40 years of hostility China and India are renewing cultural ties, for three reasons. First, before the 1962 conflict, China and India had centuries of close economic, cultural, and religious ties. Second, research indicates that neighboring countries trade more with each other than non-neighboring countries. Third, China and India have evolved in different ways since their economies opened up, reducing competitiveness between them and strengthening complementarities (Khanna, 2007). emerging markets and in their own markets. Multinationals should recognize how to gain competitive advantage when dealing with the emerging markets of China and India (Khanna, 2007). Works Cited Conklin, D., (2011). Chapter 13, Summary and Conclusions. In The global business environment: New paradigms for international management (pp. 271-286). Sage Publications (ISBN-13: 978-1412950282). Hout, M., & Ghemawat, P. (2010). China versus the world: whose technology is it? Harvard Business Review, December: 95-103. International Monetary Fund (IMF), (September 2011). World economic prospects. Retrieved October 25, 2011, from http://www.imf.org/Khanna, T., (2007). China + India: the power of two. Harvard Business Review, December: 60-69. Stalk, G. and Michael, D., (2011). What the West doesn't understand about China. Harvard Business Review, June: 126-129.