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Modi-Xi Informal Summit: Background and Prospects; By Balasubramanian C

Updated: Dec 22, 2022

Image Courtesy: The Diplomat

Article No. 042/2019

The history of India – China relations can be characterised as one of cooperation, conflict and competition.  The rise of China increased asymmetry in power between the two nations. This dictates a fundamental rethinking in India’s policy paradigm in dealing with China. There are two pillars of existence- one of conflict and competition and the other of cooperation and convergence.

The cooperation and convergence are set to be pragmatic with each looking at its self-interest. A mind-set is needed to look for areas of cooperation benefitting both the sides, but historic mistrust and overlapping interests make it much more challenging.

The coastal town of Mamallapuram is set to host the historic meet between President Xi Jinping and Prime Minister Narendra Modi from October 11-12, 2019. This is the second informal meeting after the Wuhan summit which took place on April 2018.

Despite the opacity in what transpired at the Wuhan Summit, it was understood by both nations that simultaneous emergence of India and China as two large economies will have implications of regional and global significance. They shared the view that peaceful, stable and balanced relations between India and China will be a positive factor for stability amidst current global uncertainties. They also agreed upon proper management of the bilateral relationship, conducive for the development and prosperity of the region, creating the trajectory for the success of the Asian Century.

Significance of Mamallapuram:

Mamallapuram, an important town of the erstwhile Pallava dynasty is renowned for its architecture. The Pallava king Bodhidharma, who established the ‘Shaolin Monastery” in China, travelled to China from Kanchipuram. He went on to become the 28th patriarch of Buddhism succeeding Prajnatara (also known as Keyura). Prajnatara as some evidence states that she was a woman and teacher of Bodhidharma.

Mamallapuram and the Pallava dynasty are also historically relevant. This evident from the earliest recorded security pact between China and India (in the early 8th century) involving a Pallava king (Rajasimhan, or Narasimha Varma II), from whom the Chinese sought help to counter Tibet, which had by then emerged as a strong power posing a threat to China.

Issues & Challenges:

  1. Trade & Development:

China’s Trade war with the US has left Beijing bereft of options. With India and the US coming closer, China is warming up to India to advance its interests.

The economic aspect could see China looking for more free markets for goods, investments and technology. China is likely to press India to finalise the agreement and push for Regional Comprehensive Economic Partnership (RCEP). Restoring balance in trade relationship can boost confidence in India. It can reduce friction between India and China in negotiations related to RCEP.

On the investment front, India has set up a dedicated China desk under its Invest India Platform; this can facilitate higher Chinese investments in India. India should press China to make public its targets to be invested in India.

Post-Wuhan Summit witnessed Chinese investments in Indian start-ups of around $5 billion in sectors such as food-tech, logistics, retail, artificial intelligence, Internet of Things and Fintech. But concerns remain regarding Chinese investments in the technology sector having implications for national and data security. China has enacted legislation requiring data localisation while being a signatory to the Osaka Track dialogue. While India has objected to the framework of the Osaka Track Dialogue terming data as national wealth and seeking dialogue at the WTO. The Economic Survey of India in 2019 contained a separate chapter titled ‘Data as the New Oil’, stands testimony to the importance India attaches to data localization. Therefore, a common ground is needed to situate an environment of trust-building in such areas.

On the trade front, India must persuade China to invest in Indian infrastructure and development. The worrying factor is India’s huge trade deficit with China. The issue also runs along with market access restrictions and non-tariff barriers that impact Indian firms in China. Though bilateral trade has crossed $90 billion it is in favour of China which enjoys a huge trade surplus. Low-cost Chinese goods which continue to dominate the Indian market are a cause of concern to India. China continues to impose market access restrictions to Indian investments and is engaged in industrial policies distorting the market.

The 2+1 format i.e. China + India partnering to work in developing projects in a third country is likely to be on the agenda.

  1. Defence & Strategy:

Peace and Tranquillity on the border are set to be an important factor in the agenda for China especially after Indian action of abrogation of Article 370 in Indian State of Jammu and Kashmir. However, the resolution of the border dispute, needs careful examination and constant cooperation. Due to the different perceptions of the border along the LAC, is likely to persist for short to medium term strain in relations. India needs to bear in mind its asymmetrical strength vis – a – vis China. Despite the border contentions, the two countries should not be deterred from cooperating in other areas of significance. India can leverage China’s rise to advance its economic development. Thus, peace at the border is a prerequisite to advance Sino – India relations.

On the issue of Tibet, India must be mindful of larger interests of cooperation between both the nations. The use of deft diplomacy and strategic tact can enable India to look beyond Tibet.

The repeated incursions at the border by People’s Liberation Army necessitate India to seek greater cooperation between the armed forces. It can enable India to understand the organisational structure of PLA, its decision-making matrix and promote stability.  Military training, joint exercises and other professional interactions at various forums can act as confidence-building measures (CBMs). A long-standing demand for both sides to establish hotline needs to be fast-tracked.

The China factor in the Indian Ocean has become a reality. The two countries held their second Sino-India Maritime Security Dialogue in 2018 where the two sides exchanged views on various topics of mutual interest, including perspectives on maritime security and cooperation, blue economy, and further strengthening of practical cooperation. Both sides underlined the importance of the dialogue as an important mechanism between the two countries for consultations on maritime issues. With Xi’s ambitious Belt and Road Initiative, such motives have only gained prominence. India should be wary of any normalisations of Chinese warships and submarines in the Indian Ocean Region.

The Wuhan summit saw a broad consensus of the need for the Sino-Indian relationship to remain peaceful, stable and balanced amidst unfolding global changes. The Mamallapuram meet should build a closer developmental partnership keeping in mind relations for a long-term. China should respect Indian sensitivities and concerns regarding ‘China Pakistan Occupied Kashmir Economic Corridor’ (CpokEC) that undermines India’s sovereignty and territorial integrity. Finally maintaining peace and tranquillity along the disputed border is a functional prerequisite to building trust.

Mamallapuram meet must make both sides understand opportunities and challenges may exist but differences should not turn into disputes. This should be the take away for both sides. The future must see shared prosperity and growth of both nations regardless of frictions.

(Mr. Balasubramanian C is a Senior Research Officer at C3S. The views expressed are those of the author and does not reflect the views of C3S.)

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