Top priority to reduce India deficit
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PRESIDENT Xi Jinping played host to Indian Prime Minister Narendra Modi in his ancestral hometown yesterday at the start of a three-day visit to China during which the two Asian giants will work to boost economic ties.
It was the first time Xi had invited a foreign leader to his home province of Shaanxi in northwest China, a conscious display of hospitality underscoring his intention to build a strong personal relationship with Modi.
Xi was reciprocating the Indian leader’s invitation to his own hometown of Ahmedabad during a visit to India last year.
He welcomed Modi at a government guesthouse in Xi’an, the provincial capital. Modi said it was “an honor to 125 crore (1.25 billion) Indians whom I am representing as prime minister.”
China-India relations “are experiencing stable development and facing broad prospects,” Xi told Modi.
The exchanges highlighted warming ties between the two powers — the world’s most populous nations.
Modi’s visit will “push forward the bilateral strategic partnership to achieve new progress, which has potential for greater development,” Xi said.
Clad in traditional Indian dress, Modi earlier visited a museum dedicated to China’s famed terracotta warriors and a Buddhist temple housing works translated from Sanskrit — a reminder of the ancient cultural links between the two nations.
Amid heavy security, large crowds turned out to greet his motorcade, prompting Modi to tweet: “Am very glad to see the enthusiasm among the people of China. People-to-people ties are always special.”
Xi said that his visit to India in September had resulted in “an important consensus on promoting the bilateral strategic partnership of cooperation and forging a closer partnership of development.”
China is looking to India as a market for its increasingly high-tech goods, from high-speed trains to nuclear power plants, while India is keen to attract Chinese investment in manufacturing and infrastructure.
With a slowing economy, excess production capacity and nearly US$4 trillion in foreign currency reserves, China is ready to satisfy India’s estimated US$1 trillion demand for infrastructure projects such as airports, roads, ports and railways.
Modi’s top priority in China is finding ways to reduce India’s US$48 billion trade deficit with its neighbor through greater market access for Indian goods and services and by convincing Chinese companies to manufacture in India.
Indian and Chinese officials have said the two sides plan to sign investment deals and trade agreements during Modi’s visit that will be worth about US$10 billion.
China is India’s biggest trading partner with two-way commerce totalling US$71 billion in 2014.
But India’s trade deficit with China has soared from just US$1 billion in 2001-02, according to Indian figures.
“Boundary issues were discussed including peace and tranquillity on the border,” Indian foreign secretary S. Jaishankar told reporters following the meeting.
A border dispute sparked a bloody monthlong conflict in 1962. No resolution is expected soon, although the two sides have been in close contact to avoid flare-ups.
He said the two also discussed India’s attempt to join China as a permanent member of the United Nations’ elite Security Council.
Modi led his Hindu nationalist Bharatiya Janata Party to a crushing electoral victory last May on a promise to revive India’s flagging economic fortunes.
Ahead of his trip, Modi said he firmly believed “this visit to China will strengthen the stability, development and prosperity of Asia.”
“I am confident my visit will lay the foundation for further enhancing economic cooperation with China in a wide range of sectors,” he wrote on Twitter last week.
The Indian leader will later head to the capital Beijing and the financial hub of Shanghai, seeking to deliver on election promises to attract more foreign investment for India’s crumbling rail and other infrastructure.
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