Xi-Modi meet in Xi’an to boost ties
May 14, 2015, 9:41 am

Chinese President Xi Jinping and Indian Prime Minister Narendra Modi in Xi’an, China on 14 May 2015 [Image: PMO, India]

Official relations between the world’s two fastest growing economies have come a long way since the two fought a brief border war in 1962.

“This is the first time I have treated a foreign leader in my hometown and I hope you have a happy stay,” Xi told Modi ahead of Thursday’s meet. Xi’an is the capital city of Shaanxi Province and the Chinese President’s hometown.

In the 90-minute meeting on Thursday between the two nationalist leaders, “various aspects of bilateral, regional, global issues were discussed,” said Indian Foreign Secretary S. Jaishankar briefing reporters in Xi’an. The two leaders discussed pending UNSC reforms and India’s bid to join the Nuclear Suppliers Group (NSG).

“On the political side, there was a lot of discussion on strengthening trust and increasing convergence. On the economic side, trade deficit and the investment climate- these were the two issues that came up. There was some discussion on the challenges of reforms,” said Jaishankar.

“There was some time spent on discussing connectivity issues and finding ways of India-China working together,” he said.

“Terrorism came up because of today’s incident in Kabul. There was a reference to the attack in Karachi (Pakistan) and the need to strengthen counter-terrorism cooperation between India and China,” the Indian Foreign Secretary added.

Modi and Xi will hold talks over the next two days to celebrate the two countries’ burgeoning economic love-in with focus on trade, culture, railways, industrial parks and smart cities.

The two leaders are expected to acknowledge an entirely different factor driving these two giants closer together: the increasingly influential clout of developing economies in the new global financial architecture.

The BRICS Development Bank, the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund are all initiatives spearheaded by China for a new kind of global development financing.

India has partnered with China on both the BRICS Bank and the AIIB.

India is expected to join the Russia-China-led Shanghai Cooperation Organisation (SCO) later this year. An SCO development bank is also in the offing.

Bilateral trade topped $70 billion in 2014. The two countries have set a trade target of $100 billion in 2015.

The Chinese President has met the Indian Prime Minister thrice since the latter assumed the top office in New Delhi last year.

On Friday in Beijing, Modi will meet Chinese Prime Minister Li Keqiang after which the two will hold talks and sign a number of agreements.

The two sides will also move forward on establishing a hotline between the headquarters of the countries’ armed forces.

The Indian Prime Minister will also deliver a public address at Tsinghua University in Beijing on Friday.

In Shanghai on Saturday, the Indian Prime Minister will meet Chinese business leaders.

“Before Modi’s visit, enterprises on both sides have been discussing a series of practical cooperation programs that could result in over 10 billion U.S. dollars worth of contracts. It is expected that during the visit, China and India will sign big trade deals and reach agreement on various cooperation programs,” reported China’s state-run agency Xinhua.

“We expect business agreements to be signed,” India’s Foreign Secretary S. Jaishankar said on Tuesday at a news conference in New Delhi.

Earlier on Thursday, Modi had visited the remains of an ancient imperial palace in Xi’an near the tomb of emperor Qin Shi Huang, home of the famous terracotta army.

“Terracotta Army is a heritage of world, a testimony to China’s civilizational achievement,” said Modi on Thursday.

The Indian Prime Minister is keen to highlight the historic and civilizational links between the two neighbours to bring harmony between the people.

The “soft power” relationships binding Delhi and Beijing like the yoga-tai chi event that the Indian Prime Minister is scheduled to attend in Beijing are likely to feature as much if not more than the “hard power” negotiations over opening up Chinese markets for Indian goods, border skirmishes and regional security.

In an interview to an Indian magazine ahead of the Modi trip, Chinese Premier Li Keqiang referred to the ease of doing business in India.

“I hope India will provide more preferential policies and investment facilitation to Chinese businesses, help them address difficulties and inconveniences they may encounter so that the industrial parks can deliver tangible benefits at an earlier date as flagship projects in China-India practical cooperation. We also welcome greater presence of Indian companies in China,” said Li.

China has reiterated its invitation to New Delhi to join in on construction of the ambitious 21st Century Maritime Silk Road.

Indian officials have said though that the administration will move forward on the BCIM corridor.

China and India had in 2013 formed an intergovernmental body with Bangladesh and Myanmar for the BCIM economic corridor. Consultations have been held earlier on the feasibility of a BCIM Economic corridor, a region host to 40% of the world’s population. The belt hopes to retrace the lost trails and revive commercial trade in the ‘Southern Silk Route’.

Both India and China, beyond the economic advantages of closer ties, have mutual geopolitical interests too.

Both New Delhi and Beijing are expected to increase their commitment to Afghanistan as US troops there pull out, fearful of anarchy in the war-torn south Asian state spilling over to destabilise the region.

The two countries also have close ties with Moscow both within and outside the BRICS group, even in the face of Western sanctions and isolation. Both India and China have sent military units to take part in the Victory Day parade at the Red Square in Moscow that was boycotted by Western leaders.

The BRICS Post with inputs from Zhao Zhu in Beijing, China and Pooja Bhansali in New Delhi, India.