At Modi-Xi Informal Summit, India and China Announce New Dialogue Mechanism on Trade

The Indian side told reporters that the Kashmir issue “was not raised or discussed”.

New Delhi: Indian and China on Saturday announced the setting up of a new high-level  dialogue mechanism on economic and trade issues, even as Prime Minister Narendra Modi talked of a balance between goods and investment after Chinese President Xi Jinping called for finalising the Regional Comprehensive Economic Partnership (RCEP).

President Xi also briefed India about Pakistan Prime Minister Imran Khan’s recent visit to Beijing. However, the Kashmir question was neither raised nor discussed by either side, according to a senior Indian government official.

The venue for Saturday’s formal interactions was Fisherman’s Cove on Kovalam beach.


After a one-on-one meeting which went on for 50 minutes, they began delegation level talks with opening remarks by both leaders.

In line with precedence set by the first summit, there was no joint statement – but both sides issued separate press releases.

Speaking to the media, Indian foreign secretary Vijay Gokhale said that there was a “good discussion” on trade. “President Xi Jinping said that China was ready to take sincere action”.

He announced that the leaders have agreed on a new High Level Economic and Trade mechanism, which will be chaired by Chinese Vice Premier Hu Chunhua and Union finance minister Nirmala Sitharaman. “The decision on its activation will be taken through diplomatic channels,” added Gokhale.

The Indian press note, issued after the end of informal summit, stated that the objective of the mechanism would be to achieve “enhanced trade and commercial relations, as well as to better balance the trade between the two countries”. The second aim would be to increase investments in selected sectors “through the development of a manufacturing partnership”.

Xi’s priorities

The Chinese readout, provided via the report of its state-run news agency Xinhua, focused on six points it said Xi had made:

First, that the two countries “correctly view each other’s development and enhance strategic mutual trust … realising a scenario where the dragon and the elephant dance together is the only correct choice for the two countries and is also in the fundamental interests of both countries and peoples.”

Second, that there be “timely and effective strategic communication” which would “prudently deal with issues concerning each other’s core interests, and for problems that cannot be resolved at the moment, they should properly manage and control them.”

Third, that the two sides “effectively improve military and security exchanges and cooperation”.

Fourth, that China and India “deepen pragmatic cooperation and tighten ties of interests”, taking “the establishment of a high-level economic and trade dialogue mechanism as an opportunity to strengthen the alignment of their economic development strategies, and seek to build a partnership in manufacturing industry”. Xi also invited Indian pharma and IT companies to invest in China.

Fifth, they should “consolidate the foundation of friendship” by deepening cultural and people-to-people exchanges.

Sixth, that they strengthen cooperation in international and regional affairs, in particular by taking “a clear-cut position to safeguard an international system with the United Nations as its core and an international order based on international law” and upholding multilateralism, especially in trade, “with the World Trade Organization as its core” and concluding the RCEP agreement “as early as possible”.

New trade talks mechanism

India’s trade deficit with China has been thorn in New Delhi’s side for more than 15 years. Last year, the deficit was around $53 billion, while total bilateral trade stood at $95 billion.

Gokhale said China brought up the issue of finalising RCEP during the talks. “Prime Minister Modi said that he looked forward to this, but believed that there should be a balance between trading goods and services”. Xi replied, as per the Indian foreign secretary, by noting that “Indian concerns” should be addressed.

The MEA press release stated that the two sides “agreed on the importance of concluding negotiations for a mutually-beneficial and balanced Regional Comprehensive Economic Partnership”. 

Also read: How Consultative Has India’s RCEP Strategy Really Been?

The Indian foreign secretary said that both India and China also supported the rule of law in trading regimes and backed the World Trade Organisation mechanism.

The Chinese President also called to “step up engagement in defence and security”. Defence minister Rajnath Singh has been invited to visit China soon.

Both leaders agreed that peace and tranquillity had been maintained at the border over the last year since the Wuhan summit, when they had given “strategic guidance” to the two militaries, as per the Indian official.

Further, there was a decision that additional confidence building measures should be negotiated, but the announcement would take place later.

Prime Minister Narendra Modi and Chinese President Xi Jinping exchange gifts at Mamallapuram on Saturday. Photo: PTI

On the border dispute, the two leaders urged the Special Representatives to “continue their efforts to arrive at a mutually-agreed framework for a fair, reasonable and mutually acceptable settlement based on Political Parameters and Guiding Principles that were agreed by the two sides in 2005”.

Reviewing post-Wuhan scene

In his opening remarks at the start of the formal discussions, Modi said that the first informal summit at Wuhan in April 2018 had given “increased stability” and “fresh momentum” to ties. “Strategic communication between two sides has improved”.

The Wuhan summit had been held in the post-Doklam period, after India and China emerged from a bruising 73-day long stand-off on the Himalayan heights of Bhutan in 2017. One of the key takeaways from the summit was “strategic guidance” given to the militaries to increase communication and cooperation at the border areas.

“We had decided that we will prudently manage our differences and not allow it to turn into dispute, be sensitive of each other’s concerns and be a pillar for peace and stability in the world,” he said.

Modi said that there had been exchanges with his guest on both bilateral and international issues. “Wuhan spirit infused new momentum and trust in our relations. Today’s Chennai Connect will begin a new era of cooperation in the country”.

In the run-up to the informal summit, Indian officials had said that Modi will not raise the issue of Kashmir on his own, but could clarify Indian position if Xi sought a clarification.

“I want to state quite categorically that Kashmir was not raised or discussed,” said Gokhale on Saturday.

Also read: Modi-Xi Summit: India Highlights ‘Radicalisation’, China Stresses ‘Civilisational Ties’

However, he added that President Xi did mention the visit of the Pakistan Prime Minister to China earlier this week. “Prime Minister listened,” Gokhale said, but added no further details.

On the first day of the informal summit, India had said that there had been a consensus between the two sides on the issue of radicalisation and the need to find it together.

This topic also figured in India’s press statement, which stated that both leaders felt that terrorism “continues to pose a common threat”.

“As countries that are large and diverse, they recognised the importance of continuing to make joint efforts to ensure that the international community strengthens the framework against training, financing and supporting terrorist groups throughout the world and on a non-discriminatory basis,” said the MEA press release.

There was also a discussion on regional issues, including on Afghanistan.

The only reference to terrorism in Xinhua’s report was where it quoted Modi as saying “India is willing to join hands with China to push for an RCEP agreement at an early date, and boost connectivity and anti-terror cooperation.”

The Chinese foreign ministry press release, however, has a more detailed position on terrorism. “The two leaders believe that both China and India are victims of terrorism. The two countries are committed to combating terrorism in all its forms and call on all countries to strengthen international cooperation against terrorism”.

Also read: Explainer: Key Questions of the Modi-Xi Informal Summit Answered

Next year, the two Asian neighbours will mark 70 years of diplomatic relations. A calendar of 70 events have been drawn up, which could include a ship voyage that will trace the historical connect between the two civilisations.

Gokhale noted holding at least one event every week over the next year should intensify people-to-people contacts and help to improve public opinion and perception in the two countries. “There was felt a need to broad base the relationship by improving public opinion,” said Gokhale.

The host states of Tamil Nadu and Fujian province in China will establish sister-state relations and explore the possibility of setting up an academy to study links between Mamallapuram and Chinese cities.

After the ends of the summit which lasted around eight hours over two days, Xi left Chennai for Kathmandu. He is travelling to Nepal for the first official visit by a Chinese President in 23 years.

Modi-Xi Summit: India Highlights ‘Radicalisation’, China Stresses ‘Civilisational Ties’

Indian readout on the first day of the Mahabalipuram informal summit focuses on the terror and trade issues, Chinese reports say Xi advocated ‘greater learning’ between the two sides.

New Delhi: After a day of “quality time” in each other’s company touring ancient stone monuments, watching classical dances on the shores of the Bay of Bengal and talking over dinner, Prime Minister Narendra Modi and Chinese President Xi Jinping discussed a range of topics but the devil was in the detail of what the Indian and Chinese sides chose to highlight in their briefings to the media at the end of the day.

Both countries face a “common challenge” from radicalisation which they must fight together so that it doesn’t impact the multi-cultural fabric of both nations, Indian foreign secretary Vijay Gokhale told reporters in a late night briefing.

He spoke after the dinner talks between the two leaders went way beyond the scheduled period. Apart from the theme of radicalisation, or terrorism – the Indian side’s primary talking point in virtually all international conversations these days and a place holder for referring to Pakistan – Gokhale said Modi and Xi also spoke about the trade deficit between India and China.

According to the official Chinese news agency Xinhua, however, the two leaders “held an extensive talk during the tour on dialogue and mutual learning among civilisations” in which Xi told Modi that Tamil Nadu, as “maritime transit hub for cargoes in the ancient silk road”, has a long history of exchanges with China.

The Chinese president also advocated the 70th anniversary of diplomatic relations in 2020 be used s an opportunity to conduct broader and deeper cultural and people-to-people exchanges, Xinhua reported.

In toto, Modi and Xi spent over five hours of “quality time” – as Gokhale described it – on the first day of the second Informal summit.

After Xi was welcomed by a veshti-wearing Modi at the world heritage site of Mahabalipuram, the Indian prime minister took the Chinese president on a quick tour of the different monuments which were built by the Pallava dynasty in the seventh and eighth centuries.

At the rock relief known as ‘Arjuna’s Penance’, Modi told Xi that it was a philosophical interpretation of man and nature living together in harmony. At ‘Ganesh ratha’, the prime minister pointed out that it continued to be part of living culture, stated Gokhale.

Thereafter, they witnessed a cultural show of south Indian classical dance and music against a backdrop of the illuminated Shore temple. At the end of the half an hour-long dance programme presented by the Chennai-based Kalakshetra Foundation, the two leaders walked a few paces to a specially constructed tented pavilion.

The dinner, which lasted for two hours, comprised an array of south Indian dishes from across the four states.

According to Gokhale, the two leaders talked largely about their national priorities during their five hours together on Friday. The deliberations on Saturday would be formal, involving both delegations, and will encompass regional and international issues.

The Indian delegation included external affairs minister S. Jaishankar and national security advisor Ajit Doval. Xi Jinping brought a 90 member-strong official entourage, but the key members of his delegation included Ding Xuexiang, member of the political bureau of the Communist Party of China central committee, Yang Jiechi, director of office of foreign affairs of the CPC central committee, Wang Yi, state councillor and foreign minister and He Lifeng, vice chairman of the National Committee of the Chinese People’s Political Consultative Conference.

The two delegations sat separately, while the leaders had their long repast, with interpreters sitting next to them.

The foreign secretary said that Modi informed Xi that he had received a “renewed mandate for economic development”. The Chinese president responded that he looked forward to closely working with him over the next five years.

Gokhale stated that there was a general discussion on trade issues – “on trying to identify areas for investment and how to enhance the trade volume and trade value”. He added that discussion included the matter of “trade deficit and trade imbalance”.

In 2018, India and China bilateral trade stood at $95 billion, with the trade deficit recorded at $57.86 billion, as per Chinese official data.

Thereafter, the Indian foreign secretary claimed, the discussion steered towards the challenges faced by both countries from terrorism.

“Both leaders said that these were large countries and that radicalisation was a concern to both… and that both would work together so that radicalisation and terrorism did not affect the fabric of our multicultural, multi-ethnic and multi-religious societies,” said Gokhale.

The top Indian diplomat indicated that the two leaders had a “general sense that both leaders have that this was a common challenge and we will work to overcome it”.

Whenever India has raised terrorism with China, the underlying current has been that New Delhi would like Beijing to push Pakistan to take action against terror groups. This agenda will be taken up through the entire summit.

China has claimed that its key threat comes from radicalism in the Uighur Muslim community in Xinjiang province. It has since devised a massive “re-education” policy which includes sending Uighurs to special camps.

Earlier this week, the US commerce department blacklisted 28 Chinese companies for taking part in a surveillance programme, which China claims is aimed at fighting Islamic extremism.

However, the state-run Xinhua news agency did not mention that trade or terrorism had been topics of discussion.

Instead, it said that both leaders agreed to “respect and learn from each other so as to jointly achieve common development and prosperity, as well as the great rejuvenation of the two civilisations”.

Once Again, #GoBackModi Trends as PM Visits Tamil Nadu

The hashtag has, by now, developed into a tradition of sorts.

New Delhi: Each time Prime Minister Narendra Modi travels to Tamil Nadu, the strange forces of the internet combine to get a particular hashtag trending. Unfortunately for Modi, it is #GoBackModi.

This time, as the prime minister travelled to the state for day one of an informal meet with Chinese president Xi Jinping on Friday, the selfsame hashtag was back. Also seen was #GoBackSadistModi.

Both hashtags have remained top Indian trends through the day.

A screenshot of the trending hashtags bar on Twitter, taken at around 4 pm on Friday.

By now, this is a digital phenomenon Twitterati is well accustomed to. A few days ago, on September 30, when Modi travelled to the Indian Institute of Technology in Madras for the institution’s 56th annual convocation, the same hashtag trended.

In her article for The Wire on the recurring hashtag, Kavitha Muralidharan had written in March that the tradition first made its way to Twitter in April, 2018. Back then, Modi had visited Tamil Nadu to inaugurate the defence expo. The day also saw widespread offline protests, with several black flag and black balloon demonstrations against the Centre’s delay in forming a Cauvery water management authority.

Also read: Why Tamil Nadu Says #GoBackModi Every Time He Visits

“The #GobackModi hashtag trended again on January 27 this year, when Modi was in Madurai to lay the foundation for the AIIMS. Again on February 10, when Modi came to Tiruppur, it trended on Twitter,” Muralidharan writes.

Most notably, in March this year, the hashtag trended on the same day that captured Air Force pilot Abhinandan Varthaman was welcomed back with a hashtag of his own. Modi, who was visiting Kanyakumari to launch projects, was met with a #GoBackModi amidst all the #WelcomeHomeAbhinandan greetings.

BJP, which has a rather strong IT cell capable of trending hashtags across the country, has alleged that this hashtag is the work of the DMK IT wing.

Reaction to Friday’s trending hashtag varied across the spectrum of political affiliation. A news channel has labelled it ‘a conspiracy by Pakistan’, even though it is uncertain as to how Pakistan would gain from getting such a hashtag trending.

 

Wuhan to Chennai: Different Venue, Same Terrain in India-China Dialogue

Modi and Xi must think beyond civilisational bonds to find new areas of cooperation. The two sides have already exhausted the past to build any meaningful partnership.

Beijing: The first informal meeting between Prime Minister Modi and China’s President Xi Jinping was held in Wuhan, China against the backdrop of the Doklam standoff in 2017. Both leaders agreed then that they would continue the new format of talks to strengthen India-China relations. This time the informal meeting is scheduled to be held on October 11-12 in the ancient Tamil town of Mamallapuram.

The selection of Xi’an – in Shaanxi, Xi’s home state – as the venue for the informal summit was in return for Modi hosting Xi in Ahmedabad in his home state of Gujarat.

These curated meetings and events in India-China relations serve specific short-term tasks and thereby fall short on changing the overall narrative and policy directions of both governments.

Also read | Why Trump’s Trade War With China Actually Hurts Beijing Less

This ‘new venue’-centric act in the India-China opera is taking place under the shadow of changing regional and global politics. The venue keeps changing but the terrain of talks remains the same. In Xi’an, China was looking at India as an uninvited guest in Doklam. Today, the situation is reverse. In Mamallapuram, New Delhi has said Beijing’s responses to Kashmir are irksome and intrusive.

Moreover, India has not changed its stance on China’s Belt Road Initiative (BRI). S. Jaishankar, India’s external minister, responded negatively to a question on BRI during his briefing on the ‘100-day achievements’ of his ministry in the second term of the Narendra Modi-led government. Moreover, the foreign ministers of the Quad countries – India, Australia, Japan and the United States – met on the sidelines of UN General Assembly last month and “reaffirmed their commitment to shared values and cooperation on maritime security, infrastructure and connectivity and in support of a rules-based framework”, as Australian foreign affairs minister Marise Payne said.

Also read | India-China Informal Summit: Modi Won’t Bring up 370, But Will Brief Xi if He Wants

The geopolitics of the ‘Indo-Pacific’ has also made its presence felt in Southeast Asia. ASEAN’s outlook on the Indo-Pacific foresees the rise of antagonistic economic and military powers and the group has made clear its preference for  ‘avoiding the deepening of mistrust, miscalculation, and patterns of behavior based on a zero-sum game’. In other words, Southeast Asia intends to carefully sail the ‘ASEAN Way’ in the troubled waters, avoiding clashing either with China’s BRI plans or the Quad’s Indo-Pacific construct.

Beijing, on its part, requested the United Nations Security Council to hold an informal, closed-door meeting on Kashmir – its first since 1971. Interestingly, Beijing was fully aware of the outcome of the meeting and the consequence. The closed-door meeting had no material outcome, not even a statement from the UNSC. Yet it was sufficient to further discomfort public opinion in India.

As they contemplate Mamallapuram’s spectacular architecture, both leaders need to consider the uncomfortable fact that the India-China partnership, such as it is, rests on an extremely narrow base. Apart from territorial discord, the power-dilemma thrown up by contemporary geopolitics is having a destabilising effect on the civilisational legacy of good relations.

Both leaders thus need to focus on broadening the base of India-China engagement so as to sustain and strengthen the relationship. First, India and China must think beyond the civilisational bond to find new areas of cooperation. Beijing and Delhi have already exhausted the past to build any meaningful partnership. A happy history has no bearing on a prosperous future. But equally, a troubled present need not be a sign of a painful future.

Secondly, meaningful resolution to the boundary dispute can go a long way to removing the extra layer of suspicion and also significantly boost mutual trust. The informal meeting will have no strategic value unless it brings a paradigm shift in policy.  Sadly, everything was business as usual after the Wuhan ‘reset’. Nonetheless, it does seem that both leaders are seriously thinking about how to chart a new direction in India-China engagement. With both leaders enjoying robust political support at home, resolving the boundary problem is possible if they look beyond the ‘strategic prism’ and realise that keeping the border unsettled is no guarantee that the other’s rise will be checked.

Also read | What India Can Learn From China

Thirdly, the trade deficit is damaging bilateral economic relations and hampering any sustainable economic partnership between the two countries. Xi and Modi, as new protectors of the globalisation realm, should focus on leveraging their respective strengths for a resilient trade partnership. China is moving from the hub of ‘low technology’ to ‘hi-tech’ productions under ‘Made in China 2025’ while India is pushing for ‘Make in India’ so as to become self-reliant in the manufacturing sector. Moreover, given the ongoing US-China trade tension, New Delhi and Beijing have an opportunity  to recalibrate their own trade partnership in a what that is favourable to both.

Fourthly, Delhi and Beijing have a ‘shared dream’ of the Asian Century but are following different paths to realize the dream. That is natural given the different political systems, philosophy and national conditions. However, what is significant and worth pondering over is the areas of overlap. Beijing and New Delhi have come together many times to work together to protect the interests of developing countries. From keeping the principle of “common but differentiated responsibility” in climate change negotiations or balancing the powers at WTO negotiations to creating BRICS and the Asian Infrastructure Investment Bank, the India-China partnership has ensured that together they can significantly change regional and global outcomes in favour of developing countries.

Fifthly, India and China, both emerging and rising powers, need not antagonise each other in ways that severely hamper their respective global ambitions. The world is moving from a unilateral to a multipolar system. Multipolarity is neither ‘single theatre’ or a ‘multiplex complex’ but the coming of ‘home theatre.’ In such a preference-based world, nothing but cooperation among powers can deliver such customisation. New Delhi desire to revamp the UNSC rests on cooperation from Beijing while China’s effort at customising ‘world order’ needs the support of India.

Despite these shared concerns, the level of mutual trust has constantly been dropping while the power dilemma has been hardening. At their ‘informal summit’ on Friday, Modi and Xi must bring positive vibes that can reverse the deteriorating relationship. Or else they might as well start writing the obituary of the Asian century – the shared dream of Deng Xiaoping and Rajiv Gandhi.

Rajiv Ranjan teaches Intentional Politics at Shanghai University, Shanghai, China