Will Xi-Modi summit lead to deals on Belt and Road, investments, and border?
A summit between President Xi Jinping and Indian Prime Minister Narendra Modi this week will mark a significant geopolitical shift as the leaders of the two estranged regional powers join forces amid a growing threat of US protectionism. It could lead to agreements on connectivity, investments and the border, sources said, although both China and India have billed it as an "unofficial" summit with no stated goals.
"Both sides have agreed not to sign an agreement or release any joint document but reach important consensus to resolve outstanding issues," Chinese Vice-Foreign Minister Kong Xuanyou said on Tuesday in Beijing.
"There are no concrete deliverables. The two leaders will explore their areas of convergence amid the current global climate and seek a template for future partnership," said Ashok Kantha, a former Indian ambassador to China who leads the Institute of Chinese Studies in New Delhi. "It's a special gesture on part of Prime Minister Modi, visiting China twice in six weeks."
It is this flurry of activity and the unusual haste, and Modi's known preference for big-bang policy moves, that have raised expectations of the meeting. Xi and Modi were long scheduled to meet in Qingdao, eastern China, in June for the multilateral Shanghai Cooperation Organisation summit. This bilateral summit, to take place in Wuhan on Friday and Saturday, was suddenly announced last Sunday.
Both sides have managed to keep a tight lid on the ongoing pre-summit negotiations and the give-and-take that has already taken place to make themeeting possible.
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With this unprecedented summit, Modi is flagging a dramatic policy reversal with far-reaching geopolitical implications. China-India relations have worsened since he came to power in 2014, culminating in a two-month military stand-off in the Doklam area on the Sikkim-Bhutan-Tibet "trijunction" last year.
"Modi has recognised that an adversarial relationship with China brings few benefits and mostly problems that India will find difficult to solve with its own resources," said Zorawar Daulet Singh, author of forthcoming Power and Diplomacy: India's Foreign Policies During the Cold War.
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The Modi government has been vocal against China's opposition to its entry into an elite group of nuclear suppliers and for ignoring New Delhi's objections to Chinese infrastructure projects through areas in Pakistan that India claims. China, on the other hand, has watched with alarm the Indian government's aggressive stance on issues China considers core interests, such as the South China Sea disputes and Tibet.
Modi has also been courting the US more actively than his predecessors as a hedge against a resurgent China, a policy that has alienated Beijing and now finds little favour with an inward-looking Donald Trump presidency.
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"The United States is turning protectionist. Politically, its policies aren't consistent. Economically, there's little to gain. They are selling us arms, but that's about it. The US is not anti-India but China has the capacity and ability to help generate the kind of job creation and economic activity we are seeking," said Ravi Bhoothalingam, honorary fellow of the Institute of Chinese Studies.
"The summit is aimed at creating a favourable environment to make Chinese private capital feel at home," he said.
Trump has singled out India for trying to extract "billions and billions and billions" of dollars in foreign aid to sign up for the Paris climate agreement, blamed it for playing dirty in bilateral trade, and tightened visa norms, threatening its IT companies and workers.
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"India has been treated shabbily by the Trump administration. Heightened India-China tension only reduces India's bargaining leverage with the US and Japan, both of whom, incidentally have steady relations with China," said Singh, adding that Modi's grand "reset" gesture is aimed as much at China as it is at the US.
Among the various compromises being worked out to reboot ties is a possible easing of India's resistance to China's Belt and Road Initiative (BRI) of infrastructure projects. India is the only country that did not send a representative to the BRI forum last year. Its opposition to BRI puts it at odds with its neighbours, all of which are eager to tap the promised opportunities.
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"India might show some support towards BRI in principle, and there could be project-specific cooperation within BRI even if it's not called Belt and Road specifically," said Jagannath Panda, a research fellow at the Institute for Defence Studies and Analyses in New Delhi.
The Bangladesh-China-India-Myanmar (BCIM) economic corridor, a China-led project, for example, is expected to elicit greater Indian interest if both sides manage to reach consensus on connectivity during the upcoming summit.
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The Chinese ambassador to India, Luo Zhaohui, has already suggested changing the name of the China Pakistan Economic Corridor that India opposes, as it passes through Pakistan-occupied Kashmir (PoK). He has also said China is open to finding alternative routes for the corridor if it helps India to come on board.
"I am happy to learn that India will join the BRI, although the two sides still have differences to settle," Wang Dehua, director of the Institute for Southern and Central Asian Studies at the Shanghai Municipal Centre for International Studies, told the South China Morning Post.
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Modi is also expected to make room for Chinese investment in more areas, especially infrastructure. Major Chinese investment in Indian railways could be on the cards if the talks turn out right. India has already approached China to help upgrade the railway corridor between Bangalore and Chennai while China is understood to have expressed interest in the New Delhi-Chennai high-speed rail system.
India recently granted Japan the contract to develop the Mumbai-Ahmadabad high-speed railway. Awarding a major rail project to China would showcase a decisive turn in relations.
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Following the Doklam shock, discussions on new norms of border management would be on the agenda. Delhi-based China analyst Jabin Jacob does not rule out some movement on the border settlement either. The Chinese have been offering to settle the sectors of the border where the two sides have no major differences. Any tangible progress on the border issue would be a major boost for Modi, who is going into elections within 12 months.
"He needs to show a win. He also needs to keep China quiet on the border. If there's ever a good time to make progress on the border, this is it," said Jacob.
This article originally appeared on the South China Morning Post (SCMP).
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