Modi’s tango with China

“I am looking forward to the trip to China... the 21st century belongs to Asia,” an optimistic Narendra Modi told the Chinese media ahead of his visit that happened from 14th-16th May. He hoped that his visit would further deepen India-China relations and set a new milestone for Asia and developing countries. To take India from where it is to a <g data-gr-id="123">place</g> it has not been. 

The <g data-gr-id="122">three day</g> visit marks the latest effort by two of Asia’s biggest powers to overcome their strategic differences and increase bilateral trade to levels that reflect their huge populations and fast economic growth. The visit sought to resolve and consolidate ties between key sectors in both countries, including state-level leaders, foreign ministries, militaries, development planners, financial regulators, think-tanks and senior figures in media. These are all useful, necessary steps to develop links between elite collectives which can both manage misperceptions and nudge government action where needed.

Chinese President Xi Jinping met Narendra Modi on Thursday afternoon at Big Wild Goose Pagoda, a location meant to convey shared history. The Indian leader spent the morning touring Xian’s cultural sites, including the terra-cotta army, and complimented the well-preserved third-century relics as “testimony to China’s civilizational achievements. A cultural show and banquet were planned for the evening.

The Prime Minister met premier Li Keqiang at the Great Hall of the people,  and signed 24 agreements worth about $10 billion, including deals on developing rail infrastructure, space research, cooperation between Doordarshan and China Television and the opening of new <g data-gr-id="121">casualates</g> in Chennai and Chengdu. The leaders also agreed to set up a <g data-gr-id="159">high powered</g> task force to look at the trade deficit and issues related to the pharmaceutical, agricultural and manufacturing sectors, with India demanding greater access to the Chinese market.

“A shadow of uncertainty always hangs over the sensitive areas of the border region. It is because neither side knows where the LAC is in these areas. That is why I have proposed resuming the process of clarifying it. We can do this without prejudice to our position on the boundary question,” Modi spoke. Several more business deals were made during the PM’s visit to Shanghai. “I stressed the need for China to reconsider its approach on some of the issues that hold us back from realising full potential of our partnership,” Modi told the media. Modi and Li spent several hours together, attending a  Yoga-Taichi performance at the Temple of Heaven in Beijing, before clicking a selfie together. Modi announced that Chinese nationals would get e-visas for India, an effort to move tourists and boost people-to-people interaction between the two countries.

Updating and sharing details, foreign secretary S Jaishankar said that leaders agreed to expand number of ‘border personnel meeting” points from the current four at Bumla in the eastern sector, Nathula in the Sikkim border, Chushul in the western sector and recently opened <g data-gr-id="131">Kibutudamai</g> in the eastern sector. Counter-terrorism was also in sharp focus during the meeting. He also said China had reacted positively to India’s bid to become a member of the 44-nation Nuclear Suppliers Group, which controls the civil nuclear technology trade regime worldwide.

Prime Minister Modi’s final day in China saw the two countries signing $22-billion trade deals. He announced to Chinese companies “now India is ready for business” with an improved regulatory environment as he urged them to embrace the opportunities in manufacturing, processing and infrastructure.”We are very keen to develop the sectors where China is strong. We need your involvement. The scope and potential, the breadth and length of infrastructure and related developments is huge in India” Modi spoke during his address at the India-China Business Forum. Working towards a Sustainable Economic Partnership. The 21 business-to-business deals covered a wide range of sectors including industrial parks, ports and financing.

President Xi has reasons to invest in a relationship with India as he has ambitious plans to reform the Chinese economy, recognising that its present economic practice of over-investing in production capacity is reaching its limits. But Xi is seeking alternate overseas markets for China’s huge steel, cement and materials sectors. Thus his One Belt, One Road and various Silk Route proposals, all designed to build infrastructure beyond China’s borders explained Columbia University’s Daniel Rosen, “Xi wants to stimulate demand for basic materials producers without further over-building domestic infrastructure.” China’s Ambassador to India, Le Yucheng, calling India a “natural partner” for these programmes, has even offered to “link the Belt and Road initiatives with India’s Spice Route and Mausam projects.” 

India and China have disagreed for decades over which country controls two chunks of Himalayan territory. The two sides fought a brief war in 1962 over the latter territory.  Diplomats from the two countries now regularly discuss the territorial dispute in scheduled talks, but even if little progress is ever made, neither country seems to care very much.

China has a growing presence in the Indian Ocean, a scenario analysts call the “string of pearls” strategy linking China’s interests in the countries surrounding India – Sri Lanka, Myanmar, Bangladesh and Pakistan. In Sri Lanka, off India’s southern tip, China began by building the port at Hambantota and significantly upped the stakes with a massive development project off the coast of the capital, Colombo. Then, Sri Lanka allowed two Chinese submarines to dock off its coast, threatening to derail ties between India and Sri Lanka. The two sides moved to reconcile after the election of a new Sri Lankan government that put the Colombo port project under review. However, the US defense department predicts China will keep establishing “access points” in the area over the coming decade.

Last year, India’s economy expanded 7.2% and China’s grew 7.4%, the slowest annual rate in nearly a quarter century. India’s growth could accelerate further if New Delhi addresses long-standing problems such as poor infrastructure and a strangling bureaucracy. In China, the central bank has cut interest rates to try to prevent the economy from slowing too quickly. After two decades of double-digit growth that has raised incomes but also caused significant environmental damage, China is trying to nurture an economy with greater reliance on service industries, which grow at slower but more sustainable rates.

Both China and India sent immense amounts of aid and military forces when a 7.8 magnitude earthquake hit Nepal on 25 April, and both pledged to help the impoverished nation. China has been courting India’s traditional ally with infrastructure projects like roads and hydropower dams. Chinese annual investment overtook India’s in 2014, and Beijing persuaded Kathmandu to clamp down on anti-Tibet demonstrations. Nepal’s location between India and China makes it geopolitically strategic, as a buffer between the two Asian giants which fought a brief border war in 1962. It also shares a border with the fraught territory of Tibet, defusing tensions between China and India, where Tibet’s exiled government and Buddhist spiritual leader the Dalai Lama are based. Its water resources are also crucial to the region, with melt from its Himalayan glaciers feeding rivers in both of the neighboring countries.

China is spending $144 billion on its military this year compared to India’s $40 billion. Still, India operates two aircraft carriers to China’s one, along with conventional and nuclear submarines, latest-generation fighter jets and an array of ballistic and cruise missiles. Both China and India possess nuclear weapons. While there have been no armed clashes since 1967, China’s support for Pakistan has long been a sore point in relations. India has grown close to the US on defense issues and wishes to retain its status as the premier force in the Indian Ocean.

Speaking to an enthusiastic crowd of Indians in Shanghai, the Prime Minister said India and China represent one third of humanity and together can be a force of good for the entire world. “Have we ever recognised this strength? The times have changed and that is why China and India can resolve not only their own problems but also help the rest of the world,” he spoke in Hindi at the Expo Exhibition and Convention Centre. Modi also said that he was attempting to do in a year of his government what has been left undone for the past 30 years. “People are criticised for not working, but my misfortune is that I am criticised for working hard. They attack by saying “Why did Modi go to so many places, why is he meeting so many people?”, he asked the assembly of hysterical Indians, many of whom were seen jumping over each other to click selfies with him.

Modi later flew to Mongolia, the first Indian Prime Minister to do so, to meet President Tsakhiaglin Elbegdorj in a bid to strengthen bilateral cooperation in several areas and talk on Uranium 

supply to India. “Goodbye China! My gratitude for the warmth and hospitality. Will always remember my visit fondly,” he had tweeted. “Lets make India-China stronger in the years to come.” The Prime Minister also visited Seoul from the 18th-19th. It was part of India’s East Asia policy. He also went to promote ‘Make in India’ concepts for Korean investments.