Modi's Diplomatic Tightrope Walk in China

Indian Prime Minister Narendra Modi's visit to China on Thursday has set the stage for a delicate balancing act between his economic and strategic relationships with regional rivals. Modi will aim to reassure his Chinese hosts that he is not part of a coalition with other regional powers to curb Beijing's rise, while also seeking to strengthen business ties. The two nations have a history of disputes, including a border conflict over 50 years ago, but have come to realize that cooperation is more beneficial than confrontation. "Resolving the border question is not a precondition for anything," says Ye Hailin, an expert on South Asian politics at the Chinese Academy of Social Sciences. Chinese President Xi Jinping has previously pledged $20 billion in investment in industrial parks and high-speed rail lines, but those plans have yet to materialize. Indian businesses have expressed frustration with regulatory obstacles and a lack of progress on land acquisition procedures.

Key Takeaways:

• Indian Prime Minister Narendra Modi's visit to China on Thursday aims to balance his country's economic and strategic relationships with regional rivals.
• The two nations have a history of disputes, including a border conflict over 50 years ago, but have come to realize that cooperation is more beneficial than confrontation.
• Chinese President Xi Jinping has previously pledged $20 billion in investment in industrial parks and high-speed rail lines, but those plans have yet to materialize.
• Indian businesses have expressed frustration with regulatory obstacles and a lack of progress on land acquisition procedures.
• India is seeking to attract more Chinese investment, with a focus on trade, and has asked Beijing to dismantle trade barriers to allow Indian high-tech companies to compete in the Chinese market.
• Chinese exports to India have increased significantly, with trade leaping from $42 billion in 2009 to $71 billion last year.
• India's top priority is jobs, with the government struggling to fund investments to create them, while China presents a critical opportunity for financing.
• The unresolved border issue continues to strain relations, with 18 rounds of talks over more than a decade failing to make significant progress.
• Prof. Zhang Li warns that the unresolved border issue will continue to undermine strategic mutual trust, while experts are optimistic that cooperation in other areas will provide a framework for more flexible approaches to the border dispute.

Statistics:

• Trade between India and China leapt from $42 billion in 2009 to $71 billion last year.
• China exports $60 billion worth of goods to India, while importing mainly raw materials such as cotton, copper, and mineral ores.
• India has asked Beijing to dismantle trade barriers to allow Indian high-tech companies to compete in the Chinese market.
• Chinese President Xi Jinping has pledged $20 billion in investment in industrial parks and high-speed rail lines.
• India's top priority is jobs, with the government struggling to fund investments to create them.

Sources:

• Ye Hailin, expert on South Asian politics at the Chinese Academy of Social Sciences
• Xi Jinping, President of China
• Ma Jiali, India analyst at a think tank attached to the Party School of the ruling Communist Party's central committee
• Subrahmanyam Jaishankar, India's foreign secretary
• Nandan Unnikrishnan, deputy head of the Observer Research Foundation
• Zhang Li, Professor of International Relations at Sichuan University in China