Updated: May 13, 2015 12:03:02 am
Prime Minister Narendra Modi’s visit to China this week, as part of a three-nation tour that also includes South Korea and Mongolia, will be the fourth by an Indian PM in 12 years. New Delhi and Beijing have been hosting frequent high-level visits for more than a decade now, but the two sides agreed to regularise this process during Chinese President Xi Jinping’s trip to India in September last year. Modi’s visit is ostensibly aimed at not only building on the new energy that appears to have been injected into the bilateral relationship but also broadening the engagement with China.
The real focus of Modi’s trip is, of course, economic cooperation. In Beijing, the PM’s pitch for the “Make in India” campaign is expected to find a receptive audience among Chinese manufacturers and investors. China announced investments worth $20 billion over five years during Xi’s visit. An additional $10 billion worth of deals is now likely to be signed. India is in a good position to make a case for itself in attracting Chinese manufacturing investment, given that shrinking cost advantages at home are making Chinese manufacturers look increasingly at India, which needs that investment to build its own manufacturing base and much-needed public infrastructure, such as railways.
Modi’s trip also comes soon after K.V. Kamath’s appointment as president of the BRICS bank that needs to address the PM’s call for a lender to fill infrastructure gaps. Chinese FDI in Indian manufacturing and greater market access for Indian businesses in China are also part of Modi’s efforts to address the high trade deficit favouring China, which hovered around $40 billion even last year. But for that structural imbalance in bilateral trade, China remains India’s largest trading partner. In Beijing, Modi needs to secure a greater commitment from the Chinese leadership to tackle the issue.
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A significant aspect of the new energy in bilateral ties is putting cultural contact at its centre. Despite their civilisational ties, Indians and Chinese have remained largely ignorant of their shared cultural inheritance. Leveraging this, most importantly the shared Buddhist legacy, entails a pragmatic discarding of the redundant anti-imperialist rhetoric that has never served Delhi any good and a widening of people-to-people contact, with help from visa liberalisation and tourism. Nevertheless, bilateral relations are unlikely to emerge from the shadow of the border dispute in the near future. Although the government has resumed negotiations, there is no hint of a dramatic breakthrough. Under the circumstances, the focus must remain on maintaining peace and tranquillity on the border while holding political discussions on the way forward to a settlement. Modi has made a bold effort in recasting the relationship by breaking with past Indian policy on China. He has correctly recognised that security and geopolitical challenges cannot be allowed to constrict the burgeoning economic partnership. This new self-assurance and pragmatism, however, needs to overcome the resistance in Delhi first.
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