Xi & Modi discuss trade as Chinese and Indian troops square off over disputed Himalayan

Chinese President Xi Jingping makes a rare visit to India for trade talks, border tensions remain high

On Sept. 17, Chinese and Indian troops faced off over the disputed Himalayan region during a rare visit by Chinese President Xi Jingping to India. Xi arrived in India to meet recently elected Prime Minister Narendra Modi to discuss trade and the tense and uncertain relations between the two countries.



Modi made it clear his government wants the border situation resolved. India believes China is becoming overly assertive and aggressive about its territorial ambitions, especially as it watches closely China’s actions in the South China Sea against Japan and the United States.  “I raised our serious concerns over repeated incidents along the border,” Modi said. “There should be peace in our relations and in the borders. If this happens, we can realize [the] true potential of our relations,” he said. The last time India and China spilt blood over the disputed Himalayan was in a brief skirmish in 1962 that left more than 2,000 dead.  Modi was elected partly on a promise that he would push for and implement a more robust and confident foreign policy for India, particularly in the country’s relations with its immediate neighbours like Pakistan and China.

Modi’s border concerns, however, were downplayed by Mr. Jingping. “A warlike state, however big it may be, will eventually perish,” the Chinese President said in his speech, saying China only desired trade and cooperation with its neighbours.  During their meeting, both leaders agreed that India and China should begin renewed talks to try and resolve their decade’s long dispute. India and China have sat down to negotiate over the Himalaya’s on 17 different occasions since the 1990s, but nothing substantive has ever come from them.

“We have to address the boundary question very soon,” Modi said. Xi agreed with Modi that the unresolved tensions between the two rising giants does need to be resolved.  “Sometimes there might be certain incidents, but the two sides are fully capable of acting promptly to effectively manage the situation,” he said.

The main issue during the visit was cross-border trade and business. China recently announced plans to invest nearly $20 billion into India’s economy.  Both leaders believe that increasing investment and business partnerships will help to improve relations between their countries. The $20 billion China is seeking to invest in India over the next five years will focus primarily on new infrastructure, such as railroads, and heavy industry and manufacturing.

This represents a massive change in Chinese commercial interest in India. In just the last twenty years, Chinese companies have invested barely half a billion in India. This new interest is an opportunity Modi could obviously not pass up, regardless of his mandate to strengthen India’s claim over the disputed region.

India’s trade with China at present is heavily favoured in China’s interest. Total cross-border trade between the two last year was $65 billion. Xi said his government supports increasing India’s access to Chinese markets for Indian goods.

Xi also said he will help India to join the Shanghai Cooperation Organization, an economic initiative represented by Russia and China and is also interested in a greater role for India at the United Nations, particularly in getting India a seat on the Security Council.  Even more contentious than the border issue, however, is the Dalai Lama, the Tibetan spiritual leader. The Dalai Lama fled Tibet from Chinese communist rule in 1959 and resides now in India. The Tibetan government-in-exile also is in India as well as many thousands of refugees who have fled to northern India from Chinese oppression.  China is bitterly opposed to any talk of an independent Tibet and is an obvious strain in any friendly relations between China and India. Some Tibetan protesters awaited Xi’s arrival but Indian police were already waiting and arrested them.  The Dalai Lama said Xi’s visit to India was an excellent opporuntiy for the president as well as China to learn from its democratric tradition.

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