The “world’s factory” and the “world’s back office” could together drive global economic growth, Chinese President Xi Jinping said as he began a rare visit to India yesterday, playing down mistrust that has long kept the Asian giants apart.
India’s new 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 before landing in India, where he received a warm and carefully choreographed welcome.
He said that, together, 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 with his wife directly to Ahmedabad, the main city in Modi’s home state of Gujarat, where the Indian prime minister greeted him with a handshake and a bouquet of lilies.
Modi is keen on Chinese investment to help balance $65bn 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 visit coincides with a slowdown in China’s economy, which has prompted Chinese companies to look abroad for growth opportunities.
A $6.8bn deal 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 event where another $3.4bn worth of agreements was signed between Chinese and Indian firms.
Indian airline IndiGo, the country’s largest by market share, said it had sealed a $2.6bn agreement on the sidelines of the summit with Industrial and Commercial Bank of China (ICBC) to finance more than 30 new aircraft.
Further deals worth tens of billions of dollars were expected to be announced on the three-day visit, dwarfing the $400m invested by China in India over the past 14 years.
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.
Dragon and elephant
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.
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.
