Illustration: Liu Rui/GT

The optics-laden summit between Chinese President Xi Jinping and Indian Prime Minister Narendra Modi came amid the unceasing stream of tariffs the White House is dousing the two countries with. This saw the leaders of the two Asian powers emphasize the economic partnership, which is ordained to set growth trajectories and crystallize the geopolitics of tomorrow. 

On the face of it, the last few years have seen China-India bilateral trade make impressive strides amid the expectation of crossing $100 billion this year. China's investments in India - $8 billion and counting - have made equally impressive progress. 

Trade deficit - the economic eyesore - continues to dwarf the potential of commerce between countries with the world's first- and second-largest population. The most important outcome of this summit, therefore, was the setting-up of a high-level economic and trade dialogue showcasing their determination to redress anxieties over the deficit, investments and market access especially in the services sectors or ensuring visa relaxation for information technology professionals. This upgraded ministerial framework will carry forward the work done in the six working groups of India-China Strategic and Economic Dialogue.

At the regional level, the two leaders underlined that it is important to support and strengthen the rules-based multilateral trading systems at a time globally agreed trade practices and norms are being selectively questioned. As Modi and Xi sipped coconut water in the backdrop of the 7th century UNESCO-recognized heritage monuments that celebrate historical links, their trade interlocutors in Bangkok, Thailand were brainstorming an early end to negotiations on creating the Regional Comprehensive Economic Cooperation (RCEP). Here again, India continues to be seen as the last holdout while China has emerged as its flag-bearer.

India has a trade deficit with 11 out of 15 RCEP countries. It has multiple concerns over what it sees as a hasty approach to concluding the RCEP fearing it will open floodgates for more imports from these countries. RCEP treating all members as equal for tariff cuts will undermine competitiveness of India's exports. India has concerns about market access for its services sector. Indian pharmaceuticals continuously face serious IPR-related criticism from several of them. Indian political parties are demanding a special session of the parliament to discuss RCEP's implications for farmers. In this backdrop, the proposed "balancing act" by China and India can become the catalyst delivering an effective RCEP.

At the global level, China is seen taking added responsibilities of financial governance. This week witnessed China chairing the plenary session of the Financial Action Task Force (FATF) in Paris. Under China's presidency, FATF presents one more opportunity for coordinating policy positions with India. Created by the G7 in 1989, this 37-country task force is mandated to combat money laundering especially the financing of terrorists. This makes it a priority for China and India that have been victims of terrorism. Also, as two of the world's largest countries and second- and sixth-largest economies, it remains incumbent on China and India to coordinate to make FATF a potent forum for global financial governance.  

The grapevine has it that the Modi-Xi informal summit in Mamallapuram, India, saw them agree to build a "manufacturing partnership" and insinuations point at the two leaders already ironing out an agreement that with some more fine tuning with ASEAN, could accommodate New Delhi's reservations. That can set on roll the world's largest free trade area and leave US President Donald Trump's administration cooling its heels in keeping with the cognitive stereotype of Neanderthals given to ossified thinking. 

The summit also saw Xi express interest in collaborations in the defense sector as he extended an invitation to Indian Defense Minister Rajnath Singh. Modi and Xi urged their special representatives to continue "efforts to arrive at a mutually agreed framework for a fair, reasonable and mutually acceptable settlement based on Political Parameters and Guiding Principles that were agreed by the two sides in 2005." The text for the framework agreement was finalized 10 years ago and it may finally receive the green light. Meanwhile, transgressions on the Line of Actual Control (LAC), often inadvertent, continue to be triggered by differing perceptions over claims and even de facto LAC.

This calls for broad-basing of their equations. Designating year 2020 as Year of India-China Cultural and People-to-People Exchanges, the "Chennai Connect" or "Sister-State" relationship between Fujian Province in East China and Tamil Nadu in India reflect efforts in that direction. This summit also saw scientists provide month-long training to police personnel in flying squad-copter drones for photogrammetric mapping and aerial survey of the topography required to be brought under surveillance, for deployment of specialized forces as also for wider real-time viewing around the world. That explains why the Modi-Xi summit became both a global event and local festival in India.

The author is professor at Jawaharlal Nehru University (New Delhi) and senior fellow with The Charhar Institute (Beijing). opinion@globaltimes.com.cn