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The “informal” India-China Summit at Wuhan

Context:

A two day informal summit between Prime Minister Narendra Modi and Chinese President Xi Jinping took place in the central Chinese city of Wuhan in the last week of April 2018.

Background:

  • Since the Doklam Standoff, there have been no high level meetings between India and China.
  • An informal summit was thus called to improve bilateral ties and to prevent another standoff at the border.
  • The summit had no fixed agenda so that a wide range of issues could be covered.

Note:

  • In December 2017, the two Foreign Ministers met in New Delhi followed by a meeting between China’s then state councilor Yang Jiechi and Mr. Modi’s National Security Adviser, Ajit Doval.
  • Foreign Secretary Vijay Gokhale visited China in February 2018
  • Foreign Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman went to China for Shanghai Cooperation Organisation (SCO) meetings.

Significance of the summit:

  • The very decision by the Chinese President Xi Jinping to spend two days in the city for talks with Prime Minister Narendra Modi sends out a message to Chinese business and political classes that ties with India have the highest approval.
  • The summit has shown that despite bilateral and geopolitical differences, India and China can resolve differences peacefully and through prolonged dialogue.
  • The summit’s outcomes may have been limited but are very valuable to stabilise the relationship.
  • It has underlined the necessity of an entente cordiale between the two countries, which have become increasingly distrustful of each other.

Major Takeaways:

  • Both the countries have decided to “issue strategic guidance to their militaries to strengthen communication”  in order to build trust and mutual understanding and enhance predictability and effectiveness in the management of border affairs, essentially to avoid another Doklam-like confrontation
  • They have addressed measures to balance the ballooning trade deficit of about $52 billion (of about $84 billion bilateral trade), mostly by encouraging agricultural and pharmaceutical exports to China
  • Both the countries discussed a joint project in Afghanistan.This proposed joint economic project in Afghanistan could be instrumental in mitigating the trust deficit between the two sides.
  • They attempted to reduce the heat over unresolved issues and so-called “irritants” in the relationship, such as China’s block on India’s NSG membership bid or the UN’s terror designation for Pakistan-based groups, and India’s opposition to the Belt and Road Initiative or its use of the Tibet issue by strengthening the existing mechanisms of dialogue.

Positive changes after the summit:

  • A statement was made by the Chinese vice foreign minister that China will not push India to join its Belt and Road Initiative (BRI) to connect countries Asia, Europe and Africa amid India’s persistent reservations on Xi’s mega project on the grounds of China–Pakistan Economic Corridor (CPEC) and financing patterns.
  • Chinese business and industrial houses could now choose India as destination for greenfield projects and not just mergers and acquisitions.

Way Forward:

  • The Wuhan summit has recommitted India and China to managing bilateral relations in a manner that creates the conditions for the “Asian Century
  • If China and India can cooperate in Afghanistan, they can certainly do so in other parts of the neighbourhood.
  • Mr. Modi and Mr. Xi, both with strong domestic political standing, would be able to reach an agreement, and use it to further consolidate their domestic appeal,
  • The “informal summit” is being perceived as a big positive for Chinese companies investing in India as the two governments attempt to reset bilateral ties. This would give a major boost to the Make in India Campaign.
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