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#4669, 22 September 2014
Narendra Modi and Xi Jinping: Building a Closer Developmental Partnership
Srikanth Kondapalli
Professor, Chinese Studies, JNU & Distinguished Fellow, IPCS

President Xi Jinping’s visit to India from September 17-19 provided a chance for both the leaderships to know each other’s concerns and aspirations better and made incremental progress in the bilateral relations, specifically in the economic field while opening up several areas in the social sector.

The joint statement issued at the end of Xi’s visit was termed as “building a closer developmental partnership”, unlike the previous such statements as “vision” document (as in October 2013) or a “shared vision” (in 2008) or “principles for relations” (in 2003). The 2005 formulation on “strategic and cooperative partnership” has now been extended in today’s statement to include “strategic and cooperative partnership for peace and prosperity”. Semantics apart, this reflects the desire of the two leaderships to work in an atmosphere of peace and stability for achieving economic developmental goals each had visualized for their respective countries.

However, there are no radical departures in the current joint statement from the previous understandings between the two. Panchsheel principles were re-iterated twice. One China policy entered the joint statement through back door with the observation that both sides will “abide by the principles and consensus both had agreed to” in the previous engagements.  

Major Achievements

There are some significant achievements during this round of discussions and the joint statement enlists these. In the economic field, two industrial parks will be set up with an investment from China to the tune of $20 billion in the next five years. After four years of high level interactions in which the un-sustainability of trade imbalance had been outlined by the Indian side, China finally relented with this measure, although scaled down the amount from the initial $100 billion estimate. India’s cumulative trade deficit from 2007 to 2013 stood at $169 billion with China. Related to this is the agreement to develop further railway projects in India.  The Strategic and Economic Dialogue – which was concluded three times between India and China and designed to discuss macro-economic issues – is set to intensify bilateral cooperation. Interestingly, the Bank of China was allowed to open a branch in Mumbai although the rupee-to-renminbi currency swap issues are yet to be discussed in a formal way.

Secondly, at the broader diplomatic level, the bilateral consultations on Afghanistan, West Asia, Africa, Central Asia and Counter-terrorism are acknowledged and it appeared that – in the light of the gradual withdrawal of the US-led forces from Afghanistan both New Delhi and Beijing are poised to enhance counter-terror missions in the region.

Another aspect is the revival of the idea of cooperating on civil nuclear issues, a sticking point after China backed the US 1172 Resolution in the Security Council criticising the Indian nuclear tests of 1998. While the 2006 joint statement of Manmohan Singh-Hu Jintao mentioned for the first time the possibility of engaging in civil nuclear programme, nothing concrete took place between the two so far. The current joint statement stated that both “will carry out bilateral cooperation in civil nuclear energy in line with their respective international commitments”.  

At a broader strategic level, both reiterated their support to the multipolar world and vowed to cooperate on climate change, Doha Development Round of WTO, energy and food security, reform of the international financial institutions and global governance. Interestingly, the joint statement stated that they uphold freedom of navigation and the Asia-Pacific region will uphold an “open, transparent, equal and inclusive framework of security and cooperation based on the observance of the basic principles of international law.” In the light of the South China Sea disputes, this statement is significant.

India and China: New Balance of Power?

Overall, the meetings between Modi and Xi and the recent events indicate to a balance of power element in bilateral relations, despite references to ancient civilisational wisdom and the like. Both were trying hard to reconcile with mutual security concerns over Tibet, Indian Ocean Region, India-Japan-US relations, China’s nuclear cooperation with Pakistan and investments in the Pakistan occupied Kashmir, trade deficits and the like to the enduring mutual interests on counter-terrorism, sustainable economic development (manufacture sector vs services) and the like.

Moreover, the kind of media coverage – more positive than negative – for China’s President and his entourage at Ahmadabad and New Delhi – is unprecedented. The Indian media did contribute to the expansion of China’s soft power in the region with live publicity given to the Chinese delegation. However, it is doubtful if a similar treatment will be given to Prime Minister Modi whenever he makes the official visit next. It is instructive to note that in 2009, the US President Obama wanted a live coverage of his speech in Shanghai, but was denied by the Chinese side.

There were as well polite but firm responses from either side indicating that neither wishes to cross a certain limit in the bilateral relations, although it is difficult to say whether a Cold war kind of situation prevails between them. These are in relation to the build-up on the disputed border areas at Chumar.

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