Chinese President Xi Jinping's just concluded three-day visit to India has been generating, for obvious reasons, a lot of interest, even anxiety, in this country. Prime Minister Narendra Modi rolled out the red carpet for the visitor, starting with a warm welcome in his home state of Gujarat. The two sides signed as many as 12 agreements committing $20 billion Chinese investment in India over the next five years, and enhanced access to Indian products in farm, pharma, gems and jewellery sectors. China is to help India introduce high-speed trains and redo railway stations. The two sides also agreed to start talks on civilian nuclear cooperation. President Xi said his country welcomes and supports India's full membership in the Shanghai Cooperation Organisation (SCO). None of this should bother this country. In fact, before setting out on his tour of three South Asian countries, during a meeting with Prime Minister's foreign affairs adviser, Sartaj Aziz, President Xi sought to dispel any misgivings Islamabad might have had about policy change, saying "this relationship [between Pakistan and China] is insulated from developments around the world. We should, therefore, not be concerned in this regard." That holds good for now.
To put things in perspective, trade between the two countries is heavily skewed in China's favour. As press reports note, India has been pressing China to lower duties on its exports to reduce the bilateral trade gap that increased from $18.65 billion in 2009 to a whopping $36.86 billion in 2013. Enhanced market access is aimed at reducing the trade imbalance. It is worthwhile to remember here that China's key political rival, the US, is also its biggest trading partner after the EU. And thanks to its spectacular success in international trade, Beijing owns the world's largest foreign exchange reserves. While most Western countries, including the US, worry about trade deficits, China needs to spend some of its vast forex reserves. India's huge market is an attractive place to invest some of this extra money. As for the prospects of civil nuclear cooperation, New Delhi already has a major deal with the US. It recently received an offer from Australia for collaboration in the field. Talks with China on this question will not add a dangerous dimension to the issue. In any event, China has long been providing assistance to Pakistan for energy projects and other activities in the field.
Despite the bonhomie on display during President Xi's visit, there is reason enough for the two sides to regard one another with suspicion. Ranting against China during his election campaign, Modi had said the country would have to get rid of its "expansionist mindset." Referring to last year's three-week standoff on the Ladakh border - and an "ongoing situation", according to an Indian Army official - Prime Minister Modi told reporters that during his talks with the visitor he had expressed concern over the recent "incidents", adding that "peace and tranquillity on the border is the foundation for good relations." Considering that lately China has become increasingly assertive vis-a-vis territorial claims in its far eastern neighbourhood, it is to stay firm on what it deems its rightful claim in the Ladakh region. Its preferred policy, nonetheless, would be settling the border dispute through peaceful means. More worrying from New Delhi's perspective is that, aside from helping Pakistan build the deep-sea naval port at Gwadar, China has acquired naval facilities in Sri Lanka and the Maldives - the two countries President Xi visited before arriving in India. Ostensibly, these are meant for trade and commerce; to some, they are aimed at encirclement of India. Whatever the purpose, the tensions underlying Sino-Indian relations are to persist in the foreseeable future.
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