TALKING THE TALK

Five takeaways from Narendra Modi’s much-hyped trip to Beijing

Quartz india
Quartz india

Beyond Narendra Modi’s museum photo-ops and temple tours, the Indian prime minister’s visit to China isn’t turning out to be the big reset between the two Asian economies that some had expected.

After a day of meetings in Beijing, India’s foreign secretary (and old China hand) Subrahmanyam Jaishankar’s press briefing today (May 15) affirmed that it was mostly business as usual.

That’s not to say that Modi’s diplomatic parleys aren’t significant. The Indian prime minister has spent much time with Chinese president Xi Jinping (over three hours yesterday in Xi’an), and had another 90-minute-long meeting with Chinese premier Li Keqiang today.

“I stressed the need for China to reconsider its approach on some of the issues that hold us back from realizing full potential of our partnership. I suggested that China should take a strategic and long term view of our relations,” Modi said in a press statement. “I found the Chinese leadership responsive.”

Premier Li, who is not known for his enthusiasm, told Chinese media after his time with Modi that “it is fair to say that we have met the expectation.” While these interactions may help develop a handy personal chemistry between the leaders, they haven’t quite translated into much on the ground—yet.

Here are some key developments from the second day of Modi’s first visit to China as prime minister:

Border dispute

Little headway seems to have been made in resolving the long-standing border dispute between India and China.

“On the boundary question, we agreed that we continue to explore a fair, reasonable and mutually acceptable resolution. We both reiterated our strong commitment to make all efforts to maintain peace and tranquility in the border region,” Modi said.

“I found sensitivity to our concerns on this issue; and, interest in further intensifying confidence building measures,” he added. “I also reiterated the importance of clarification of Line of Actual Control in this regard.”

These include setting up more Border Personnel Meeting posts, annual exchanges and a telephone between the military headquarters of both the countries, Modi and Li said in a joint statement. Border commanders from both armies also take part in these exchanges.

International cooperation

“As two major powers in the emerging world order,” the joint statement noted, “engagement between India and China transcends the bilateral dimension and has a significant bearing on regional, multilateral and global issues.”

So, India will push forward for becoming a member of the Asia-Pacific Economic Cooperation—the 21-member grouping of economies on the Pacific rim—and the Shanghai Cooperation Organization, the Beijing-led club of central Asian economies.

“The Chinese side took note of India’s aspirations to become a member of the NSG, in a bid to strengthen international non-proliferation efforts,” the statement reported, which, Indian foreign secretary Jaishankar emphasised, was unprecedented.

The two countries will also develop a bilateral consultative mechanism to work on the World Trade Organization-related issues.

Trade deficit

In the face of spiralling trade deficit, India and China will set up a joint task force to look into the trade imbalance and other industrial issues, Jaishankar said. He did not, however, provide any timeline for this task force composition, duration or what exactly will it do to contain the deficit. A trade deficit is created when the imports of a country are higher than its exports.

“President Xi and Premier Li were very receptive to the specific concerns I had raised on our growing trade deficit. We look forward to early impact on the ground,” Modi said in a statement from Beijing.

For a while now, the ballooning trade deficit between India and China has been an area of concern for New Delhi. In the 2015 fiscal, trade deficit between the two countries shot up 34% to $48.43 billion (Rs3.1 lakh crore) from $36.21 billion (Rs2.3 lakh crore) a year ago.

As per provisional data for the 2015 fiscal, India’s exports to China were at $11.95 billion (Rs75,816 crore) while imports amounted to $60.39 billion (Rs3.84 lakh crore.)

Investments

In September 2014, when Xi visited India, he committed $20 billion worth of investments to the country—and most of those investments are still to materialise.

But some of the announcements might be made on May 16, Jaishankar said, when Modi meets business leaders in Shanghai, China’s financial capital. Beyond that, the entire investment commitment still seems up in the air.

And India is not the only country to have received such promises from Beijing. Just seven months after Xi’s visit to India, China selected a dam project in Northern Pakistan for its $40 billion Silk Road infrastructure fund. China and Pakistan are planning $45 billion in projects along a 3,000-kilometer corridor stretching from Xinjiang in western China to Gwadar on the Arabian Sea.

Modi, of course, is accompanied by a large contingent of Indian industrialists and bankers. But going by his prior tours to the US and elsewhere, these corporate delegations end up delivering little.

In India, the only sector that has seen some interest from Chinese companies is the country’s thriving e-commerce industry, which, anyway does not require a lot of government muscle.

E-visas

Modi also announced the extension of India’s electronic tourist visa programme to Chinese nationals during his speech at the Tsinghua University in Beijing. These allow travellers to go through the visa application process online, saving them the hassle of visiting the Indian embassy in their respective countries. The addition of China now takes the total number of countries in India’s e-visa programme up to 77.

This overture comes despite that fact that China issues stapled visas to Indian nationals from Arunachal Pradesh and Jammu and Kashmir.

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