China, India work to build the Asian Century
Chinese President Xi Jinping has welcomed Indian Prime Minister Narendra Modi in his home province’s capital Xi’an; famous around the world for its Terracotta Warriors Museum. Modi’s visit has been an occasion to build another milestone in bilateral relations, said Chinese government sources, after Xi’s “successful visit” to Modi’s Gujarat home state in India in September 2014.
Strategic partnership with China is India’s “one of the most important,” said Modi. From the diplomatic standpoint, the relations between China and India – 2.5 billion people – have improved significantly for several years, and Xi seeks to “build up the sound momentum.” In an interview with Time published on May 7, 2015, Modi praised China-India relations. “For nearly three decades there has been, by and large, peace and tranquility on the India-China border. (…) Both countries are showing great maturity and a commitment to economic cooperation,” Modi told journalists.
The two countries have indeed reached important consensus on deepening China-India strategic cooperative partnership and Modi’s “positive remarks fully demonstrate the broad consensus on China-India relations shared by leaders of the two countries,” Chinese MFA’s spokesperson commented on 24 hours later. That’s why, for instance, the Indian government has decided to open consulates in the Chinese cities Chengdu and Chennai. Although “the present level of external exposure for India and China is quite consistent with the medium-term growth potential of the two economies,” according to a report released by India’s Central Bank in August 2014, the building of a Chinese economy that is progressively shifting from a large exports dependence to stronger internal consumption one, the “new normal”, and thus likely to experience a decrease in annual economic growth – below or equal to 7% – needs to diversify and to develop nearest market opportunities.
“We have set high level of ambition for our economic partnership,” said Modi. The truth is there is much untapped potential since, according to data compiled in 2012 by India’s embassy in Beijing, India was only the 15th largest trading partner of China with a share of 1.72 percent in China’s overall trade and the 7th largest export destination for China. Since then, the bilateral total trade has decreased from $73 billion in 2012 to $65 billion in 2014, with a stable trade deficit for India valued at $36 billion in 2014. “It’s more the political relations necessary to build profitable economic partnership which have improved in recent years,” Cyceon pointed out. “In fact, the figures aren’t so impressive in comparison with the ‘announcement effect’ such a top level bilateral visit creates.
Yet there’s real bilateral ambition to shape the future, even though there could also be more contradictory interests on the strategic stage as the two countries gain in influence,” Cyceon added. Finally, a long list of documents signed during the visit has showed the extent of India-China’s commitment to building the “Asian Century.”