Xi Jinping

Camaraderie between Xi and Modi set to translate into better Sino-Indian relations

Neeta Lal says relations between China and India, which share many similarities given their size and proximity, are set to soar with Xi's first visit to the nation, now led by the dynamic Modi

PUBLISHED : Monday, 15 September, 2014, 4:45pm
UPDATED : Monday, 15 September, 2014, 11:37pm

President Xi Jinping's first trip to India this week has raised great expectations in China and India - Asia's largest and third-largest economies - about a hugely productive visit. There is the added symbolism of Xi beginning his sojourn from the province of Gujarat, Indian Prime Minister Narendra Modi's home state, tomorrow - Modi's 64th birthday.

China and India have made a conscious effort to reach out to each other since Modi assumed power on May 26. The leaders' easy camaraderie was on display when they met for the first time at the BRICS summit in Fortaleza, Brazil, in July. Both have conveyed a strong desire to transform the architecture of the Sino- Indian relationship by exploring opportunities and being important actors in each other's growth stories.

Beijing is especially optimistic about bilateral ties under Modi. As chief minister of Gujarat, Modi visited China four times, earning a reputation of a dynamic and business-oriented leader. These attributes, the Chinese hope, will translate into augmented economic ties with its immediate neighbour.

Indian National Security Adviser Ajit Doval, who was in Beijing for consultations, has said that both nations are poised for an "orbital jump" in ties. Both sides are eager to match the atmospherics and deliverables on view during Modi's recent successful visit to Japan. That trip yielded substantive progress in industrial collaboration, with Tokyo setting a target of US$35 billion for foreign direct investment inflows into India over the next five years.

Economic exchanges will be pivotal during Xi's visit, too. Already, in the run-up to Xi's arrival, Liu Youfa, China's consul-general in Mumbai, has announced that China will invest over US$100 billion to set up industrial parks, and in the modernisation of railways, highways, ports, power generation, distribution and transmission, automobiles, manufacturing, food processing and textile industries.

India will also be keen to address the trade imbalance. Bilateral trade stood at US$65.85 billion in 2013-14 with a deficit of US$35 billion in China's favour. China agreed during the Indian commerce minister's recent visit to Beijing that this is "unsustainable and needs to be corrected", an Indian official was quoted as saying.

The task looks achievable considering China is sitting on some US$4 trillion in foreign exchange reserves, and plans to invest US$500 billion overseas in the coming years. In the past 14 years, China has invested only about US$400 million in India. Unsurprisingly, 135 Chinese CEOs will be part of Xi's contingent. India's 1.25 billion people (including a 300-million strong highly aspirational middle class) offer China the world's largest market to get a return on its investments.

But more than commerce, Modi's and Xi's personal ambition to inject dynamism into ties is what can be truly transformative for relations. Fortuitously, unlike his predecessor Manmohan Singh, Modi enjoys a comfortable parliamentary majority and is untrammelled by recalcitrant political allies who may try to scupper his China outreach.

In its decade-long tenure, the previous Congress-led government exhibited no real political will to warm up to China, despite mouthing clichés about Sino-Indian "camaraderie". It remained wary of China's growing global clout. At the same time, it whittled down its engagement with other nations, including the US and Japan, lest it annoy Beijing by being seen as aligning with either.

Modi - despite his criticism of expansionist policies that many took to be directed at China - is keener on a more robust China engagement and has thrown open the doors for more Chinese investment. As well as pursuing bilateral cooperation in areas like infrastructure, industry, communications and energy, both he and Xi are also forging Sino-Indian cooperation at multilateral forums like the G20, the East Asia Summit and BRICS.

Sceptics dismiss this approach as grabbing the low-hanging fruit while ignoring the challenges that confront the relationship, like the fraught boundary dispute as well as the People's Liberation Army infiltration, Chinese support for Pakistan's nuclear capability, its claims to Arunachal Pradesh and a dispute over visas.

China's "string of pearls" policy, or the development of friendly ports in the Indian Ocean, is also seen as an attempt to encircle India. However, Assistant Foreign Minister Liu Jianchao has dismissed such claims, saying "China has never, and will not, use so-called military or other means to try and hem in India".

Be that as it may, Xi and Modi are shrewd enough to realise that eschewing mutual distrust and building on convergences, rather than letting contentious issues overwhelm dialogue, is what will pay dividends and steer the future course of ties.

Xi's objectives, for his first visit to India, are to gauge India's new leadership, articulate his vision for India-China ties and prevent India from cosying up to the US and Japan to "contain" Beijing.

The postponement of Xi's visit to Pakistan - China's "all-weather friend" - due to political volatility there will further help impart a more positive spin to his India trip.

Xi's and Modi's willingness to work together, as well as the fact that the two look poised to remain in power for some time to come, has raised hopes of a new dawn in bilateral ties. Together, the two can build a new vision of China-India relations while creating a more peaceful, secure and stable Asia.

Given that India and China share many areas of convergence, as neighbours, the world's two most populous countries and its largest developing economies, the task may be tough but it is not insurmountable.

Neeta Lal is a New Delhi-based editor and journalist