Chinese Foreign Minister Wang Yi’s visit to New Delhi from today as a special envoy of President Xi Jinping, within a fortnight of Prime Minister Narendra Modi taking office, is a strong indication of China’s stance on the new political dispensation in Delhi.
Considered investor-friendly and pro-business, Modi has been keenly watched in China for some time now. In fact, he is something of a favourite of the administration. As chief minister of Gujarat, Modi reached out to Beijing seeking investment in his state, and they saw his administration as a rare exception in India – an investor-friendly region in a nation mired in bureaucratic lassitude.
Modi has visited China four times, with the 2011 trip quite extraordinary in that Beijing rolled out the red carpet for Modi, a gesture usually reserved for heads of state. China correctly gauged India’s mood and played its cards accordingly, in direct contrast to the prolonged censure that the United States maintained against Modi. President Barak Obama’s phone call with Modi is being read as a step towards rapprochement, but the sense in China is that they have trumped their great global rivals.
In a telephone conversation with the Indian Prime Minister earlier, Chinese Premier Li Keqiang said his government would work towards the construction of a Bangladesh-China-India-Myanmar regional economic corridor, a matter that was raised during Premier Li's visit to India.
As prime minister, Modi has described relations with China as “a priority of Indian diplomacy”, a far cry from the hard-nosed rhetoric he used on the campaign trail: at one election rally, he demanded China abandon its “expansionist attitude”, referring to India’s ongoing territorial and boundary disputes with China in Arunachal Pradesh and Jammu & Kashmir. China lays claim to the Indian state of Arunachal Pradesh almost in its entirety. It refers to it as “Southern Tibet” and continues to keep the border dispute with tactical incursions as a pressure point against New Delhi.
It will be interesting to see what strategy China employs to engage Modi’s government, and particularly the PM himself. Modi also has a warm equation with Japan and its hard-nationalist PM Shinzo Abe, based on their shared perspective on the future of the geopolitical and economic order of Asia. Some commentators have described this as a new dawn of Asian nationalism. Indo-Japanese proximity generates noticeable unease in official circles in China and generates frantic reactions in its state-controlled media.
Japan is already an important economic and technological ally for India. Japanese investments in India stand at nearly $16 billion between 2000 and 2014. Chinese investment is minimal in comparison, at just $396 million.
But China and India are the largest developing countries in the world and also the largest emerging markets in the world, which makes them natural competitors. India runs a massive trade deficit with China – a record $31.4 billion in 2013 – with two-way trade declining by 1.5% on account of a sharp decline in Indian exports to China. Last year, Indian exports to China totalled $17.03 billion, a 9.4% fall from the previous year, according to figures released by the Chinese General Administration of Customs.
The tempestuous geopolitical relationship that has existed between China and India for decades has been leavened by increasing trade. That this is now in decline has serious implications. The suggestion emerging from certain quarters that Sino-Indian bilateral ties are better than ever from is fallacious.
Dr. Monika Chansoria is a Senior Fellow and Head of the China-Study Programme at the Centre for Land Warfare Studies, New Delhi.
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Considered investor-friendly and pro-business, Modi has been keenly watched in China for some time now. In fact, he is something of a favourite of the administration. As chief minister of Gujarat, Modi reached out to Beijing seeking investment in his state, and they saw his administration as a rare exception in India – an investor-friendly region in a nation mired in bureaucratic lassitude.
Modi has visited China four times, with the 2011 trip quite extraordinary in that Beijing rolled out the red carpet for Modi, a gesture usually reserved for heads of state. China correctly gauged India’s mood and played its cards accordingly, in direct contrast to the prolonged censure that the United States maintained against Modi. President Barak Obama’s phone call with Modi is being read as a step towards rapprochement, but the sense in China is that they have trumped their great global rivals.
In a telephone conversation with the Indian Prime Minister earlier, Chinese Premier Li Keqiang said his government would work towards the construction of a Bangladesh-China-India-Myanmar regional economic corridor, a matter that was raised during Premier Li's visit to India.
As prime minister, Modi has described relations with China as “a priority of Indian diplomacy”, a far cry from the hard-nosed rhetoric he used on the campaign trail: at one election rally, he demanded China abandon its “expansionist attitude”, referring to India’s ongoing territorial and boundary disputes with China in Arunachal Pradesh and Jammu & Kashmir. China lays claim to the Indian state of Arunachal Pradesh almost in its entirety. It refers to it as “Southern Tibet” and continues to keep the border dispute with tactical incursions as a pressure point against New Delhi.
It will be interesting to see what strategy China employs to engage Modi’s government, and particularly the PM himself. Modi also has a warm equation with Japan and its hard-nationalist PM Shinzo Abe, based on their shared perspective on the future of the geopolitical and economic order of Asia. Some commentators have described this as a new dawn of Asian nationalism. Indo-Japanese proximity generates noticeable unease in official circles in China and generates frantic reactions in its state-controlled media.
Japan is already an important economic and technological ally for India. Japanese investments in India stand at nearly $16 billion between 2000 and 2014. Chinese investment is minimal in comparison, at just $396 million.
But China and India are the largest developing countries in the world and also the largest emerging markets in the world, which makes them natural competitors. India runs a massive trade deficit with China – a record $31.4 billion in 2013 – with two-way trade declining by 1.5% on account of a sharp decline in Indian exports to China. Last year, Indian exports to China totalled $17.03 billion, a 9.4% fall from the previous year, according to figures released by the Chinese General Administration of Customs.
The tempestuous geopolitical relationship that has existed between China and India for decades has been leavened by increasing trade. That this is now in decline has serious implications. The suggestion emerging from certain quarters that Sino-Indian bilateral ties are better than ever from is fallacious.
Dr. Monika Chansoria is a Senior Fellow and Head of the China-Study Programme at the Centre for Land Warfare Studies, New Delhi.