Xi greets Modi in ancestral home town with eye to trade ties

By Megha Rajagopalan

BEIJING (Reuters) - Chinese President Xi Jinping hosted Indian Prime Minister Narendra Modi in his ancestral home town at the start of a three-day visit to China on Thursday as the two Asian giants work to boost economic ties despite decades of mistrust.

It was the first time Xi had invited a foreign leader to his father's home province of Shaanxi, in the heart of central China, a signal that the two may set aside suspicions over a festering border issue to sign billions in trade deals.

Modi's visit reciprocated Xi's trip to India in September, when Modi took Xi to his home state of Gujurat.

"China is a huge market. As far as India is concerned, it's a totally under-exploited market," said T.C.A. Rangachari, a former Indian ambassador to France and Germany who worked on China affairs for more than 15 years.

The sunglasses-clad Modi posed for photos near a pit of 2,000-year-old terracotta warrior sculptures in the historic northwestern city of Xian.

The two leaders also visited a pagoda connected to Xuanzang, also known as Tripitaka, the monk who brought the Buddhist sutras to China from India thousands of years ago, a spokesman for India's Ministry of External Affairs said via his Twitter account. Modi was given a figurine of Xuanzang.

The two sides have also agreed to speed up work on rail links in India, as China seeks to cash in on Modi's vision of a modern train system.

The long-standing Himalayan border dispute, as well as recent forays by China's navy into the Indian Ocean, have overshadowed ties in the past. Some in China, which is a strong ally of India's longtime foe Pakistan, have reacted to the visit with scepticism.

"Due to the Indian elites' blind arrogance and confidence in their democracy, and the inferiority of its ordinary people, very few Indians are able to treat Sino-Indian relations accurately, objectively and rationally," wrote Hu Zhiyong of the Institute of International Relations at the Shanghai Academy of Social Sciences in the state-owned Global Times.

Vikas Swarup, a spokesman for India's Ministry of External Affairs, said via his Twitter account that "surging adoring crowds" greeted Modi in Xian, posting photos taken outside a shopping centre.

Modi is set to travel to Beijing on Friday, when he will meet Premier Li Keqiang. He will visit the economic powerhouse of Shanghai after that to meet business leaders.

(Additional reporting by Sui-Lee Wee; Editing by Nick Macfie)