Sections +

Jayadeva Ranade, Center for China Analysis and Strategy

Can Xi Jinping and Narendra Modi establish an economic partnership?

Can Xi Jinping and Narendra Modi establish an economic partnership?

Jayadeva Ranade is President of the Center for China Analysis and Strategy.

Jayadeva Ranade

The September 17-19, 2014 meeting in Delhi between India’s Prime Minister Narendra Modi and China’s President Xi Jinping is important and coincides with a crucial juncture in the Asia-Pacific region’s geopolitical balance. With China, India, and Japan competing for strategic space and all three led by strong leaders, a major objective of Xi’s visit will be to ensure that India does not unduly lean towards Japan.

The son of a veteran senior communist cadre, 61-year-old Xi has wide administrative experience, is self-confident, and comfortable in exercising power. The authoritative Chinese Communist Party (CCP) journal Qiu Shi (June 2014), has already described him as “one of China’s greatest communist leaders.”

Nonetheless Xi, despite having suffered during the Cultural Revolution and being sent to the country-side for “political re-education as a peasant” when his father was purged, later joined the CCP exhibiting unwavering belief and faith in the CCP, its ideology, and China’s destiny. Many of his present colleagues in the Politburo Standing Committee (PBSC), who suffered similarly, did likewise. This leadership comprises tough, doctrinaire apparatchiks intent on restoring China to its self-perceived rightful status in international affairs, and who will be unyielding on issues of sovereignty and territorial concessions. The “China Dream,” which includes “rejuvenation of China,” has particular resonance with them. The major push in the South China Sea and territorial dispute with Japan is pursuant to this.

Though Modi and Xi are both strong leaders with a definite vision for the future of their respective countries and an exhibited capacity to take bold initiatives, the doctrinaire approach of China’s leadership and rising nationalism in China, may impose definite limits on settlement of the border dispute between India and China.

Economic cooperation, on which both leaders are focused, however, has immense untapped potential, including to gradually build trust. India is the world’s largest market capable of absorbing the huge capital required for building its infrastructure and offering returns on investment. There is scope for huge Chinese investment and participation in clearly demarcated non-sensitive sectors like road, rail, housing, and certain manufactured products. India is keen to attract manufacturing enterprises including for re-export. Bilateral trade, however, will certainly need to be encouraged by opening access to Indian companies and products to redress the imbalance.

(The contributor is Member of the National Security Advisory Board and former Additional Secretary in the Cabinet Secretariat, Government of India. The views expressed are personal.)

Previous: Manjari Chatterjee Miller, Boston University