President Xi visits Modi: India, China sign 3 MoUs on infra, health

A combination of the “world’s factory” and the “world’s back office” will drive global economic growth, Chinese President Xi Jinping said ahead of a rare visit to India on Wednesday, playing down mistrust that has kept the Asian giants apart.

Three agreements were concluded Wednesday in the presence of Prime Minister Narendra Modi and visiting Chinese President Xi Jinping.

Industrial, health and educational infrastructure of China will now be available in Gujarat with the inking of the three MoUS.

State government sources said that China Development Bank and Gujarat Industrial Development Corporation will jointly set up an industrial park in the state.

The Ahmedabad Municipal Corporation and the Chinese health department signed an agreement to provide health and urban hygiene and educational infrastructure.

More from Economy

Inflation likely to be a big focus area for budget 2024, say sources Explained: Will the Bank of Japan break tradition and raise interest rates?

A third MoU was between the governments of Guangdong province of China and Gujarat.

A galaxy of business leaders from both countries was present along with Gujarat Chief Minister Anandiben Patel and her cabinet colleagues.

Prime Minister Narendra Modi is determined to build closer relations with the world’s second-largest economy, whose leader arrived on Modi’s 64th birthday armed with pledges to invest billions of dollars in railways, industrial parks and roads.

“As the two engines of the Asian economy, we need to become cooperation partners spearheading growth,” Xi wrote in a column in The Hindu newspaper.

He said China’s strong manufacturing base and India’s software and scientific skills had massive potential both as a production base and for creating a consumer market.

Xi flew straight to Ahmedabad, in Modi’s home state of Gujarat, where the prime minister gave him a bouquet of lilies.

The visit coincides with a slowdown in China’s economy, with Chinese companies looking abroad for growth opportunities.

A deal worth $6.8 billion to set up two industrial parks for Chinese investment in India was on the cards, a senior Chinese official said in New Delhi at a separate business event where another $3.4 billion worth of agreements was signed between Chinese and Indian firms.

Further deals worth tens of billions of dollars were expected to be announced on the three-day visit, dwarfing the $400 million invested by China in India over the past 14 years.

Modi is keen on Chinese investment to help balance $65 billion in annual trade that is heavily tilted in China’s favour. He is also seeking more access for India’s IT services and pharmaceuticals to China.

The leaders may also discuss working together on civilian nuclear programmes and seek a solution for a long-running travel visa row, Indian officials said.

Modi hopes the leaders of the world’s two most populous nations will establish a personal rapport to match the warmth he shares with Japanese Prime Minister Shinzo Abe, who wished him happy returns in a phone call on Wednesday morning, Indian media reported.

But beyond the smiles and the commercial embrace, ties between nuclear-armed India and China are marked by competition for energy and regional clout as well as a festering border dispute that led to a brief war 52 years ago.

Days before the two leaders shook hands and smiled in Ahmedabad, friction emerged over an alleged Himalayan border incursion by China and over a pact between India and Vietnam to explore for oil and gas in parts of the South China Sea claimed by Beijing.

In his column, Xi said the “Chinese Dragon” and the “Indian Elephant” both cherished peace and shared one of the most dynamic and promising bilateral relations of the 21st century.

In one sign that India wants the Xi visit to be a success, New Delhi asked the exiled Tibetan spiritual leader, the Dalai Lama, to reschedule an event in the capital so that it would not clash with the Chinese president’s trip there on Friday.

The Dalai Lama, whom Beijing labels a separatist seeking an independent Tibet, has lived in India since fleeing across the Himalayas after a failed uprising against Chinese rule of his homeland in 1959. Police detained a small group of Tibetan protesters from outside China’s embassy in Delhi on Wednesday. Other Tibetans were held in Gujarat.

MODI’S “INTENSIVE” FOREIGN POLICY

In a little more than 100 days since he came to power, Modi has engaged in what his government describes as “an intensive state of global engagement”, reaching out to smaller neighbours and clasping Japan’s Abe in a bear hug on his first major trip outside South Asia.

He is due to visit Washington and New York at the end of the month.

India has taken a tougher stance on Beijing’s practice of issuing stapled, rather than printed, visas to Indian citizens from the disputed regions of Arunachal Pradesh and Ladakh. Foreign Minister Sushma Swaraj told her Chinese counterpart she expected China to accept a “one India policy.”

“When they raised with us the issue of Tibet and Taiwan, we appreciated their sensitivities. So we also want that they should understand and appreciate our sensitivities regarding Arunachal,” she told reporters earlier this month.

India said on Tuesday it would firmly defend its 3,500-km (2,200-mile) border with China after domestic media reported a new face-off on the frontier.

“The two … have the opportunity to craft a new kind of relationship between great powers that is very different from the Western-dominated, post-World War Two model of great power ties,” said Jabin Jacob of the Institute of Chinese Studies in New Delhi.

“It remains to be seen, however, whether Modi and Xi can together summon the vision and statesmanship needed to grab the opportunity,” he wrote in a commentary before the visit.

Modi is not the only regional leader seeking strategic influence, defence partners and economic opportunities.

Earlier this month, Abe visited Bangladesh and Sri Lanka, asserting Tokyo’s interest in a region where it has ceded influence to China.

Xi followed this week with trips to the Maldives, the Indian Ocean island nation that New Delhi has long considered its area of influence, and Sri Lanka, where the two sides built on a blossoming relationship by agreeing to launch negotiations for a free trade agreement.

Agencies