India and China on Saturday pledged to start a new chapter of cooperation while prudently managing their differences, as Prime Minister Narendra Modi and Chinese President Xi Jinping discussed several key issues, including ways to enhance trade and investment, during their nearly seven-hour talks spread over two days in the ancient coastal town of Mamallapuram.
Both the sides decided to set up a high-level economic and trade dialogue mechanism, which will help boost trade and investments and improve trade balance that is currently heavily tiled in favour of China. Finance minister Nirmala Sitharaman and Chinese vice-premier Liu He will be part of the mechanism, foreign secretary Vijay Gokhale said, briefing mediapersons on the outcome of the summit.
"Both leaders also discussed the Regional Comprehensive Economic Partnership (RCEP) and China has assured to help out India in getting its concerns resolved," Gokhale said.
The two countries also agreed to encourage mutual investments in identified sectors through the development of a manufacturing partnership and tasked their officials to develop this idea at the first meeting of the high-level economic and trade dialogue, according to a note issued by ministry of external affairs.
India's merchandise trade deficit with China - which stood at a massive $53.6 billion in FY19, or nearly a third of its total deficit - has been a sore point with New Delhi. Similarly, despite previous commitments by China at the highest level to ramp up investments in India, foreign direct investments (FDI) from the giant neighbour have barely picked up. In fact, between April 2000 and June 2019, FDI from China stood at just $2.26 billion, or a meagre 0.52% of the cumulative inflows, according to the DPIIT data.
Gokhale said the meet focused on what had happened after the Wuhan summit - the first informal summit a year-and-a-half ago. According to him, Xi , after hearing out India's concerns on trade-related issues, has offered to initiate efforts to reduce the trade deficit.
Xi said their "candid", "heart-to-heart" discussions on bilateral relations were "in-depth" and "good", noting that maintaining and expanding the Sino-India relations is a firm policy of his government. "The Wuhan spirit gave a new momentum and trust to our relations. Today, our Chennai Connect will lead to the start of a new era of cooperation between the two countries," Modi said. "We had decided that we will prudently manage our differences, and not allow them to become disputes, we will remain sensitive about each other’s concerns and that our relations will lead to peace and stability across the world. These are our big achievements and these will inspire us to do more in future," Modi said.
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For his part, Xi said the first informal summit continues to produce visible progress. "We have deeper strategic communication, more effective practical cooperation, more diverse people-to-people and cultural exchanges and we have closer cooperation on multilateral occasions. What has happened has proved that we made the right decision to have this kind of informal summit and we can well continue with this form of meeting," the Chinese leader said. He invited Modi to visit China for the third informal summit and the Prime Minister has accepted the invitation.
The leaders recognised that India and China have a common interest in preserving and advancing a rules-based and inclusive international order, including through reforms that reflect the new realities of the 21st century. Both agreed that it is important to support and strengthen the rules-based multilateral trading system (which the WTO represents) at a time when globally-agreed-upon trade practices and norms are being selectively questioned.
According to the ministry of external affairs, both the leaders also underscored the important efforts being made in their respective countries to address global developmental challenges, including climate change and sustainable development goals.
Gokhale also said the Kashmir issue was not raised or discussed during the deliberations, but said the Chinese leader briefed Modi about Pakistan Prime Minister Imran Khan’s visit to Beijing earlier in the week. The leaders exchanged views on the age-old commercial linkages and people-to-people contacts between India and China in the past two millennia, including significant maritime contacts. In this regard the two leaders agreed on the establishment of sister-state relations between Tamil Nadu and Fujian Province, exploring the possibility of establishing an academy to study links between Mahabalipuram and Fujian province.
To take bilateral relations to greater heights, both the leaders decided to designate 2020 as the Year of India-China Cultural and People to People Exchanges. To celebrate the 70th anniversary of diplomatic relations, the two countries will organise 70 activities, including a conference on a ship voyage that will trace the historical connect between the two civilisations.