(Adds protest by Tibetans) By Y.P. Rajesh NEW DELHI, Nov 20 (Reuters) - Asian giants India and China hope to transform their cagey friendship into a trusting relationship as Hu Jintao arrives in New Delhi on Monday for the second visit by a Chinese president. The world's two most populous nations have been able to put behind the bitter memories of a brutal border war and forged new ties on the back of soaring trade and business links. But mistrust and misperceptions left over by history linger just below the surface, creating hurdles and threatening to distract what could be a lucrative partnership between two of the world's fastest growing economies. No spectacular progress or agreement is expected during Hu's four-day visit, unlike during President Jiang Zemin's 1996 trip which saw the neighbours agree to reduce tensions along their disputed Himalayan border -- the cause of their 1962 conflict. However, it is marked by the rich symbolism of a high-level visit and expectations that it could lead to moves to boost trust over time and ease mutual suspicion. "Both countries need to talk to each other regularly as they rise economically and militarily. They cannot afford mistrust and misperceptions," said Srikanth Kondapalli, a China expert at New Delhi's Institute for Defence Studies and Analyses. For China, much of the fear and insecurity is linked to India's growing proximity to the United States, its traditional support for Tibetan refugees and New Delhi's growing naval strength in the Indian Ocean. For India, it centres on China's longstanding ties with Pakistan, its perceived attempts to encircle India with sensitive facilities and investments and what New Delhi sees as a lack of willingness to compromise on the border dispute. One of those irritants surfaced on Monday when more than 1,000 Tibetan refugees staged a protest in the heart of New Delhi against what they said were Beijing's atrocities in Tibet, hours before Hu's arrival. "We want the world to know that Hu Jintao is a killer and that China must stop the illegal occupation of our country," said Tenzin Choeying, one of the organisers. Buddhist monks and nuns joined elderly Tibetan women and students, waving Tibetan flags and chanting "Death to Hu Jintao" and "Long live the Dalai Lama". "RENEW CONFIDENCE" Hu's agenda includes talks with Indian Prime Minister Manmohan Singh, speeches to business leaders in New Delhi and the financial hub of Mumbai, and a visit to Agra city to see the Taj Mahal before heading to Pakistan. The two countries are expected to sign a number of agreements to help further defence cooperation, bilateral investment protection, push regional trade and boost diplomatic, cultural and transport links, Indian officials said. "In this situation, where two rapidly developing countries are neighbours and occupy a similar position in the international system, new problems will inevitably arise even as the old ones are solved," said Zhao Gancheng at the Shanghai Institute for International Studies. "I think the biggest problem that we have to deal with is how each country sees the other," he said. Although no breakthrough is expected in the decades-old row over their 3,500-km (2,200-mile) frontier, New Delhi hopes to push Beijing for an early settlement of a dispute that is seen as key to better ties, they said. India is also likely to seek Chinese backing for a landmark civilian nuclear cooperation deal with the United States at the 45-nation Nuclear Suppliers Group where the controversial pact is expected to come for approval next year. Both nations are also expected to press each other for more transparency in trading procedures as two-way trade is expected to touch $20 billion this year and continue to grow at a scorching pace. For Beijing, a key concern would be India's hesitation to allow Chinese investments in sectors such as infrastructure and telecoms, which New Delhi sees as vital national security areas. Hu's visit is an opportunity for the neighbours to face each other with renewed confidence and realise that they stood to gain more by cooperation than confrontation, Dingli Shen of Shanghai's Fudan University wrote in India's Outlook magazine. "When 1.3 billion people can get along with 1 billion in Asia, the world is bound to be more peaceful -- and also hopeful," he said. (Additional reporting by Chris Buckley in Beijing and Nita Bhalla in New Delhi)
