godofthunder9010, I think the position of both countries would be somewhere in between those two points you mentioned. There will be massive cooperation, this is just the beginning, but there will be competition too. Healthy competition is good always.
There is progress on the border issue too, the 4000 k.m. long border which has been a traditional trade route since ages and its virtually shut down with no exchanges for many years now, if they settle the boundary issue and open the roads for trade and commerce there would be a phenomenal increase in the bilateral trade. There's already some progress on this, the premier Wen Jiabao this time is carrying maps which he would exchange with his Indian counterpart which show Sikkim, a north-eastern state of india, as a part of India. Earlier they claimed Sikkim to be theirs though it was in India.
The last thing is now the chinese claim of the state of Arunachal Pradesh, they claim that India occupies 90,000 square kilometres of China's territory. India claims that China occupies 40,000 square kilometres of Indian territory (Aksai Chin in Jammu and Kashmir). Once this particular issue is settled then we can expect really good things in the future. But I think it'll be a tough task for both the sides to give up their land claims
the red area at the top right which is called Aksai Chin is claimed by India and it is occupied by China now, the red area in the left bottom is the Indian state of Arunachal Pradesh which is claimed by china as its territory and is occupied by India now, The small red area in the middle is the state of Sikkim in India which China now has recognised as India's.