Signalling intent to address Delhi’s concerns over the massive trade deficit between the two countries, Prime Minister Narendra Modi and visiting Chinese President Xi Jinping announced a high-level economic and trade dialogue mechanism at the level of finance ministers to address the issue and encourage mutual investments.
The Indian side underlined that the prickly issue of Jammu and Kashmir did not come up in talks between the two leaders, though Xi briefed Modi on his recent talks with Pakistan PM Imran Khan in Beijing. Foreign Secretary Vijay Gokhale said the Kashmir issue was “not raised, and not discussed”. While he added that the Chinese President told the PM about Khan’s visit, and “PM Modi listened”, Gokhale did not elaborate.
Since the Modi government scrapped the special status to J&K, relations with Beijing have been uneasy, with a series of statements by Chinese officials on the matter drawing sharp reaction from Delhi.
Ahead of the delegation-level talks, Modi said they had decided to be “sensitive to each other’s concerns”. “We have decided to manage our differences prudently… and will not let them become disputes.”
Xi, who spoke after Modi, said, “For the past one year, the informal summit continues to produce visible progress. We have deeper strategic communication, more diverse people-to-people and cultural exchanges, and closer cooperation on multilateral occasions.”
Crediting Modi for the idea behind the informal summits, the Chinese President told the PM, “Actually this initiative was put forward by you, Mr Prime Minister, and I agree, it is a good idea.” He proceeded to invite Modi to China for a third informal summit, and the PM accepted.
A report in Chinese State run-Xinhua news agency Saturday quoted Xi as saying, “No matter from any point of view, China and India should be good neighbours and good partners who live in harmony and move forward hand in hand… Dragon and the elephant dance is the only correct choice for China and India, which is in the fundamental interests of both countries and their people.”
Without specifying differences between the two countries, Xi was quoted as saying, these should be “viewed in a correct way”. “We should not let them dilute the overall interests of bilateral cooperation. At the same time, we should seek understanding through communication and constantly resolve differences.”
The MEA pitched the summit as an opportunity to deepen mutual understanding, calling the ‘Chennai Connect’ in line with the ‘Wuhan Spirit’. It said, “They reiterated the consensus reached during the first informal summit in Wuhan, China, in April 2018, that India and China are factors for stability in the current international landscape and… (will) not allow differences on any issue to become disputes.”
The idea for the economic and trade dialogue mechanism was thrashed out at Xi and Modi’s Friday night dinner spread over two-and-a-half hours, sources told The Sunday Express. Finance Minister Nirmala Sitharaman and Chinese Vice Premier Hu Chunhua will head the high-level mechanism.
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Xi said China is “ready to take sincere action, and discuss in a very concrete way how to reduce the trade deficit”, Foreign Secretary Gokhale said. In 2018, trade between India and China hit an all-time high of US $95.54 billion, but of this, India’s exports comprised only US $18.84 billion.
After Friday night’s dinner, Modi and Xi met for about 90 minutes on Saturday morning, followed by delegation-level talks for about half-an-hour and lunch. In total, they spent about seven hours together over Friday and Saturday, including six hours of discussions.
In what may be a message for Pakistan, the two leaders said they were “concerned that terrorism continues to pose a common threat”. The Financial Action Task Force plenary meeting, where Pakistan faces the danger of blacklisting, starts Sunday in Paris. China is chairing the October 13-18 meeting. The statement by the PM and Chinese President said, “As countries that are large and diverse, (we recognise) the importance of continuing to make joint efforts to ensure that the international community strengthens the framework against training, financing (of) terrorist groups throughout the world and on a non-discriminatory basis.”
About the trade and economic mechanism, the MEA statement said it is meant to “better balance trade between the two countries”. Xi welcomed Indian investments into China in the information technology and pharmaceutical sectors.
On the boundary issue, the Indian official statement said the matter had come up as part of exchange of views on “outstanding issues”. “They reiterated their understanding that efforts will continue to be made to ensure peace and tranquillity in the border areas,” the MEA said.
On Kashmir, Gokhale said, “I would like to say quite categorically that this issue was not raised and not discussed.” In any case, he said, the government’s position has been expressed quite publicly, that “this is a matter that concerns the country”.
Xi brought up the issue of “engaging more on defence and security”, saying this would enhance “trust between the two militaries”. The Chinese side also extended an invitation to the Indian Defence Minister to visit the country.
The two sides went on to discuss the Regional Comprehensive Economic Partnership (RCEP), during which Modi expressed his concerns to Xi. “They shared the view that an open, inclusive, prosperous and stable environment in the region is important to ensure prosperity and stability. They also agreed on the importance of concluding negotiations for a mutually-beneficial and balanced RCEP,” the MEA said.
Gokhale said the two sides agreed on the need to maintain closer contact on international and regional issues, with Afghanistan mentioned.
Modi and Xi also decided to designate 2020, the 70th anniversary year of establishment of India-China relations, as the Year of India-China Cultural and People to People Exchanges.
The PM presented Xi a handwoven silk portrait of his, created by a weavers’ cooperative society of Coimbatore, a Kanjivaram sari for his wife Peng Liyuan, a Thanjavur painting of Goddess Saraswati, and a traditional gold-plated Nachiarkoil Kuthuvilakku (lamp).
In return, Xi gave Modi a porcelain plate with his face painted on it.