Prime Minister Narendra Modi and Chinese President Xi Jinping concluded their second informal summit on Saturday, rekindling the “Wuhan spirit” of their previous such meeting with “Chennai connect”. Xi promised to address India’s concerns on its trade deficit with China as well as its misgivings on the Regional Comprehensive Economic Partnership (RCEP) free-trade pact.
The two sides agreed to set up a new “high-level economic and trade dialogue mechanism” to enhance trade and commercial ties. Chinese Vice Premier Hu Chunhua and Finance Minister Nirmala Sitharaman will head the mechanism, which will also identify sectors for mutual investments for joint manufacturing partnerships.
India’s trade deficit with China stood at $53 billion at the end of 2018-19.
If the Wuhan summit in April 2018 helped India and China reset their engagement on security and border issues, particularly in overcoming their trust deficit after the 73-day military standoff in Doklam, the Mamallapuram summit could, in the years to come, be remembered for a reset in New Delhi and Beijing’s bilateral trade ties.
Both Xi and Modi agreed that the format of informal summits had been valuable. After their bonhomie on Friday, the two leaders met one-on-one for 90 minutes on Saturday, in all spending six hours of direct discussions over two days.
At their delegation-level talks, Xi spoke of informal summits having produced visible progress and invited Modi for a third such summit to China next year. “The Wuhan summit instilled a new momentum and trust in our relations and today's 'Chennai Connect' is the start of a new era in India-China relations,” Modi said.
Briefing the media after the Chinese president left India for Nepal, Foreign Secretary Vijay Gokhale said the two leaders had a “good conversation on trade”, which he said was of “concern” in India.
The Chinese president told Modi that Beijing was “ready to take sincere action in this regard and discuss in a very concrete way how to reduce the trade deficit”. Xi welcomed Indian investments into China in IT and pharmaceutical sectors.
The two also discussed the ongoing RCEP negotiations in Bangkok, with Modi “specifically” stating that while India looked forward to the free trade pact, it was important that it was balanced, and that balance was maintained between trade in goods, trade in services and investments.
According to Gokhale, the Chinese president said Indian concerns would be taken into account.
The Indian side “categorically” said the Kashmir issue, a cause of tension between New Delhi and Beijing since August 5, did not come up for discussion. However, the Chinese president spoke with Modi about the visit of Pakistan PM Imran Khan to Beijing earlier this week.
On whether the issue of approval for Chinese telecom equipment firm Huawei for 5G trials was discussed, Gokhale said it was not, but the new mechanism would discuss private and public sector investments in both countries.
Chinese Ambassador to India Sun Weidong said the summit was a “big success”. “From Wuhan to Chennai, from Yangtze river to Ganges, China and India join hands and stand together. Dragon and elephant have a tango,” he tweeted.
Xi and Modi also discussed regional and international issues. Gokhale said “both emphasised the importance of independent and autonomous foreign policies” and Xi said many more intensive discussions were needed between the two sides to understand each other’s perspectives on global and regional issues.
The Chinese president stressed the need to step up engagement in defence and security areas to enhance mutual trust between the two militaries and security forces. The Chinese side invited the defence minister for a visit to China. The two leaders also spoke of strengthening people-to-people contacts.
The two leaders discussed the challenge of radicalisation and terrorism that the two countries face, the status of India and China’s boundary dispute, and climate change. The two sides agreed to work on increasing links between Tamil Nadu and the Fujian province of China.
The two leaders shared the view that the international situation was witnessing a significant readjustment, and India and China had a common interest in preserving and advancing a rules-based and inclusive international order, including through reforms that reflect the new realities of the 21st century.
“Both agreed that it is important to support and strengthen the rules-based multilateral trading system at a time when globally agreed trade practices and norms are being selectively questioned. India and China will continue to work together for open and inclusive trade arrangements that will benefit all countries,” a statement from the Indian side said.
They also agreed on the importance of concluding negotiations for a mutually-beneficial and balanced Regional Comprehensive Economic Partnership, it said.
Xi left Mamallapuram at around 12:45 pm for the Chennai airport, wrapping up the nearly 24-hour trip, and from there to Nepal, the first visit of a Chinese president to Nepal in 23 years.
Modi’s TN outreach
Tamil Nadu has assembly polls in 2022. The Bharatiya Janata Party (BJP) has struggled to make inroads in the state. On the first day of the summit, the PM donned a veshti and angavasthram, traditional attire of the state.
On Saturday, the PM tweeted in English and Tamil thanking “all political parties and socio-cultural organisations of Tamil Nadu” for their support to the summit and their hospitality. In the morning, he tweeted pictures of his taking a walk on the Mamallapuram beachfront, and also a video of him picking garbage.