Chinese President Xi Jinping is set to welcome Indian Prime Minister Narendra Modi in Shaanxi Province's capital city Xi'an on Thursday in Modi's first official visit to China to bolster economic and cultural ties.

The two countries are likely to sign deals worth $10 billion during Modi's first visit as prime minister that will also take him to Beijing and Shanghai as he attempts to attract investments for Indian manufacturing and infrastructure.

Jiang Jingkui, director of the Department of South Asian Languages at Peking University, told the Global Times that it is a rare practice for a Chinese leader to receive a foreign leader outside the capital city Beijing. 

Xi'an bears a special significance as it is also the capital city of Xi's home province.

"It has been less than a year since Xi's maiden visit to India in September, when he went to Modi's hometown in Gujarat. This makes Xi's invitation to Modi to visit Xi'an a reciprocal gesture of goodwill," Jiang added.

Xi'an is also known for its cultural and historical significance as the confluence for ancient China and India exchanges. Xuanzang, the most famous Chinese Buddhist monk, is known for his 17-year journey to India to study Buddhism. During his trip, Xuanzang obtained some 657 Sanskrit texts, which he later brought back to China and translated into Chinese while living at the Ci'en Temple in Xi'an to help facilitate the spread of Buddhism.

Modi's visit comes amid a rising wave of Western media portrayal that positions the two countries as geographical rivals, overshadowed by longstanding border disputes.

Days before Modi flies to China, the Indian government summoned the Chinese envoy in Delhi to object to China's $46 billion investment in an economic corridor linking China's west to the Arabian Sea through Kashmir, a flashpoint between India and Pakistan, reported NDTV, an Indian news channel.

Observers, however, believe the two countries' differences can be overcome by the increasing economic exchanges which have drawn the two emerging Asian economies closer than ever.

India recently signed up as a founding member of the China-initiated Asian Infrastructure Investment Bank.

In a recent interview with Time magazine, Modi said that the India-China border has been largely peaceful for nearly three decades, and that both countries are showing great maturity and a commitment to economic cooperation.

Modi also wrote on his recently-registered Weibo account that the two biggest nations in the region should unite to unleash the vast potential of development and avoid wars.

"In economic, technological and cultural fields the exchanges are still small compared to the potential they present. In the economic field, trade and investment are likely to grow. Both sides may relax current visa restrictions," Manoranjan Mohanty, former chairperson of the Delhi-based Institute of Chinese Studies, told the Global Times.

China is India's biggest trading partner with bilateral trade of $70 billion, but India›s trade deficit with China rose to $37.8 billion last year, a gap Modi is expected to bridge during his visit by tapping into the potential of the Chinese market.

To bridge the trade deficit, Mohanty said China can substantially increase its investments in India, while at the same time give access to Indian pharmaceutical products, IT and financial services to the Chinese market. 

Xi is expected to hold a summit and dinner banquet with Modi in Xi'an on Thursday. Modi will then travel to Beijing and meet with Chinese Premier Li Keqiang before signing the trade deals. He will spend his last day in Shanghai to meet with Chinese business leaders and attend the China-India Business Forum.

Liu Jianxi contributed to this story

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