New Détente as China Rolls Out the Honors for India’s Prime Minister

October 24, 2013 Posted by China Briefing Reading Time: 4 minutes

“China and India the most important bilateral relationship in the world”

Manmohan_Li Oct. 24 – Indian Prime Minister Dr. Manmohan Singh has been in Beijing the past couple of days as China and India resolve to put their differences aside. In unusual diplomatic moves, retired Chinese Premier Wen Jiabao has hosted Dr. Singh as well as current Premier Li Keqiang and Chinese President Xi Jinping – a rare moment of extreme courtesy paid to any visiting dignitary.

The two nations have signed an accord known as the Border Defense Cooperation Agreement (BDCA) covering the handling of border disputes (which have led to heightened tensions over the past couple of years).

In a statement, Chinese Premier Li said that the BDCA would help maintain peace and tranquility in the border areas, and that the two governments have the ability to manage differences along the border so that it won’t affect the overall interests of bilateral relations. Li also stated that “India and China are both fast emerging economies and is the most important bilateral friendship in the world.”

Chinese hospitality was further extended with banquets featuring some exotic Chinese dishes mixed with Bollywood and Western music. As the two countries signed nine agreements, including one on strengthening the cooperation on the trans-border rivers, the Chinese military band played Flowing River as the background music for the well laid out banquet hosted by Premier Li Keqiang in honor of Dr. Singh. There were also old Bollywood numbers – the likes of ‘Mera Naam Choon Choon’ and ‘Baar Baar Dekho.’ The choice of songs is significant as these date back to the late 1950s when China and India were great friendly nations and Indian movies were regularly shown on Chinese state television. Premier Li also personally escorted Dr. Singh yesterday for a walk at the Forbidden City giving him a guided tour, another informal gesture rarely displayed by the Chinese leaders.

“The informal nature of these high level meetings are ushering in a new era of Sino-Indian respect,” says Chris Devonshire-Ellis of Dezan Shira & Associates. “The China-India trade corridor is one of the fastest growing and most lucrative in the world – two nations with the largest consumer markets in the world next door to each other. Both recognize the need to get on with each other and to promote cooperation rather than distrust. These meetings and the nature of their content bode extremely well for the future of Chinese-Indian bilateral trade. Dezan Shira & Associates itself developed its practice from China and established operations in India a few years ago. These are now booming in terms of our handling increasing numbers of foreign clients investing in India.”

Bilateral trade between China and India reached US$66.5 billion last year and is projected to reach US$100 billion by 2015. A joint statement issued after Singh’s talks with the Chinese leadership said that the leaders recognized that India and China are poised to enter a new stage of economic engagement based on pragmatic cooperation and mutually advantageous policies and practices. Singh and Li expect the Strategic Economic Dialogue during the meeting in November/December 2013 to work out specific projects and initiatives in areas that have already been broadly agreed upon.

“The Joint Economic Group will continue to expand the bilateral economic cooperation and promote a balanced growth of bilateral trade. Its Working Groups will expeditiously discharge the mandate given to them in pursuit of those objectives,” the statement said. The two sides also agreed to look into the prospects of a bilateral Regional Trade Arrangement (RTA). Other discussions included a proposed Bangladesh-Myanmar-India-China economic corridor along the old south Silk Road route, as well as a Chinese funded Industrial Park in India to promote Chinese investment into the country.

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