[Yet the economic
courtship comes as China has been extending its political and military reach in
South Asia, and when Mr. Modi’s administration is also being wooed by other
nations, notably Japan and the United States, as a counterbalance to China.
Prominent supporters of Mr. Modi say he can pursue both sets of priorities —
the economic and the strategic — with equal vigor.]
By Ellen Barry and Chris Buckley
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Prime Minister Narendra
Modi hosting President Xi Jinping of China in his home state last
September. Mr. Xi will mirror that welcome on Thursday by greeting Mr.
Modi at his
home province.
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NEW DELHI — The days before Narendra
Modi left for China,
his first visit as India’s
prime minister, brought pinprick reminders of the geopolitical rifts dividing
the two countries, even while they court each other for an economic charge.
A Chinese tabloid ran a commentary
scorning Mr. Modi for visiting Arunachal Pradesh, a border
state to which China also
lays claim, prompting a news media uproar in India.
In New Delhi, a top official noted that the government had lodged two formal
complaints about China’s plan to build a highway through Pakistan-administered
Kashmir, a border area also claimed by India.
The verbal sniping has
brought a reminder of the thicket of territorial andhistorical tensions dividing
Mr. Modi and his Chinese counterpart, President Xi Jinping.
Indian and Chinese officials have promoted Mr. Modi’s three-day visit as
essentially a business trip filled out with displays of good will and ancient
cultural kinship.
But China presents Mr.
Modi with a particularly nettlesome test of his priorities.
He has promised economic
reinvigoration at home and firmer assertion of India’s security interests. But
those goals can be especially difficult to juggle while dealing with the
country’s biggest and most powerful neighbor, which under Mr. Xi has also taken
a tougher line on territorial disputes. Eight months ago, Mr. Modi’s first
meeting as prime minister with Mr. Xi was overshadowed by a border confrontation.ma
“There are two Modis on
China,” Tanvi Madan, a fellow at the Brookings Institution, and director of its
India Project, said in a telephone interview. “There is the business-minded
leader who wants to do business with China, almost like the C.E.O. in him. And
there is Modi, the chief security officer.”
In China, Mr. Modi will
“downplay the strains about things like the border incidents,” Ms. Madan said.
“But I think he will also find subtle ways of also making clear that India is not
going to be a pushover.”
Increased trade and
investment between the two Asian giants could profit both. China is grappling
with a slowdown in growth and would like greater access to Indian markets to
make up for faltering demand at home and in other export markets. India could
use Chinese investment to build power plants, railways and other
infrastructure, and to breathe life into its manufacturing sector.
“Prime Minister Modi
really has put emphasis on the lack of infrastructure internally,” Jabin T. Jacob,
a fellow at the Institute of Chinese Studies in Delhi, said in an interview.
Mr. Modi’s “government has shown a far more open attitude,” he said, “simply
because they are influenced by business lobbies and simple facts on the ground:
that it is Chinese capacity that can deliver.”
Yet the economic
courtship comes as China has been extending its political and military reach in
South Asia, and when Mr. Modi’s administration is also being wooed by other
nations, notably Japan and the United States, as a counterbalance to China.
Prominent supporters of Mr. Modi say he can pursue both sets of priorities —
the economic and the strategic — with equal vigor.
Mr. Modi “needs everyone
on his side,” said Ashok Malik, a senior fellow at the Observer Research
Foundation in Delhi. “He needs a window of relative strategic calm in his
backyard to build the Indian economy. He cannot have the Chinese coming down
his throat. For that, he needs to keep the Chinese happy. And he needs to keep
the Chinese a little worried.”
India, whose economy two
years ago appeared fragile and tumultuous to outside investors, is increasingly
described as a bright spot; the International Monetary Fund predicted that its
growth rate would outstrip China’s this year and that it would widen the gap in
2016. But India’s economy is one-fifth the size of China’s, with a weak
manufacturing sector and one million new job seekers entering the market every
month.
For Mr. Xi, steadier ties
with India are a building block in his broader strategy of defusing territorial
and geopolitical tensions by dispensing investment and trade opportunities,
extending Chinese influence and diluting Washington’s sway.
“Since Prime Minister
Modi took office, the general atmosphere in Sino-Indian relations has
improved,” Ye Hailin, an expert on South Asia at the Chinese Academy of Social
Sciences in Beijing, said in a telephone interview. “The basic policies of each
side haven’t changed, but there’s a stronger emphasis on cooperation.”
Instead of receiving Mr.
Modi in Beijing, the normal practice for leaders’ visits to China, Mr. Xi will
greet Mr. Modi on Thursday in Xian, the ancient city that is now the capital of
Shaanxi Province in northwest China. Mr. Xi counts Shaanxi as his home
province, because his father, a well-known revolutionary, came from there. His
welcome of Mr. Modi there mirrors the gesture that Mr. Modi made last
September, when he hosted Mr. Xi at a dinner on Mr. Modi’s birthday in his home
state of Gujarat.
On Friday, Mr. Modi will
meet China’s prime minister, Li Keqiang, in Beijing, and the two governments
are scheduled to unveil business and investment agreements that China’s
ambassador to Delhi, Le Yucheng, has said could ultimately be worth more than
$10 billion. Chinese officials have indicated that they hope the agreements
will give Chinese companies a role in expanding and upgrading India’s railway
network, as well as in other big infrastructure projects like power plants and
industrial parks.
But economic ties have
failed to live up to the effusive promises of past summits. In 2010, the two governments vowed that by 2015
their trade would be worth $100 billion. Instead, last year their trade in
goods was worth $70.6 billion, and India had a bilateral deficit of $37.8
billion, according to Chinese customs data. Chinese firms, like other outside
investors, complain that their ventures in India have been stifled by
bureaucracy and security barriers. Indian companies have said that they have
been frustrated from expanding in China.
“For China and India, two
countries with a combined population of 2.5 billion, our cooperation falls far
short of reaching its due scale or level,” Mr. Li, the Chinese prime minister,
told the newsmagazine India Today ahead of Mr. Modi’s visit.
Mr. Modi will be looking
for China to open its markets in fields “where India has a very successful
global footprint, but that footprint has not extended to China,” such as
pharmaceuticals, information technology and some agricultural products, said
the Indian foreign secretary, S. Jaishankar. Chinese engineering firms could
get initial agreements forhigh-speed
rail, one of the showpieces of Mr. Modi’s economic plan, and a
project also sought by China’s rival, Japan.
The Indian chief
ministers who will accompany Mr. Modi on the trip are from coastal states,
suggesting that commercial ports are another possible area of cooperation with
China. But here, as in the power sector, experts said, Mr. Modi may encounter
resistance from hawks in his own political camp.
“You will have some of
Modi’s supporters saying, ‘You’re opening the door to China in some sensitive
sectors,’” said Ms. Madan, the scholar at the Brookings Institution. “He will
try to make the case that this is the best way in the long term, that you
cannot stop China’s rise, and they’re not going to try to.”
Since meeting with Mr. Xi
last year, Mr. Modi has also built up leverage by strengthening his
relationships with the United States, Japan and Australia.
These overtures evoked
the joint military exercises that the four countries initiated eight years ago,
excluding China. The exercises set off alarm bells in Beijing, ever mindful
that three quarters of China’s imported oil passes through the Indian Ocean.
Even before the four countries convened for their first joint meeting, Beijing
had filed diplomatic protests to Washington, New Delhi, Canberra and Tokyo. The
idea was quietly shelved.
There have been hints in
the Modi government of reviving the plan, but that has yet to harden into a
policy. In comments to The Times of India this
week, unnamed military officials said Mr. Modi had decided that joint naval
combat exercises with the United States planned for this fall “did not as yet
include Japan.” A spokesman for India’s Navy said on Wednesday that he could
not comment on the report, but that a final decision on Japan’s participation
would be made in July.
Mr. Modi has also
withheld endorsement of one of Mr. Xi’s key foreign policy projects: a network
of trade and transport routes intended to deepen China’s ties with Asia
and Europe, sometimes called a “new silk road.” Mr. Jacob, the
researcher in Delhi, noted that the effusive flattery China showered on Mr.
Modi when he first came to power seemed to have decreased.
The political irritants
could become far more disruptive if Mr. Modi and Mr. Xi fail to make progress
in economic cooperation, said Jonathan Holslag, head of research at the
Brussels Institute of Contemporary China Studies.
“This is a trial period,
a period in which the Indians are trying to find out how far they can go in
making a more equitable economic partnership,” he said. “Nothing is more
dangerous in international politics than driving expectations up and then
failing to meet them.”
Ellen Barry reported from
New Delhi and Chris Buckley from Hong Kong.
