Xi head towards India for Strategic Influence, Railways/Defence ties & New Business

Xi head towards India for Strategic Influence, Railways/Defence ties & New Business

China on track to develop Indian railways as Xi heads to South Asia. China’s Consul General in Mumbai, Liu Youfa, told last week that Chinese investment in the modernisation of India’s Railway Network could eventually touch $50 billion.

Beijing: China will pledge to invest billions of dollars in India’s rail network during a visit by President Xi Jinping who is scheduled to arrive India today afternoon, bringing more than diplomatic nicety to the neighbours’ first summit since Narendra Modi became Prime Minister in May.

The leaders of Asia’s three biggest economies – China, India and Japan – have crisscrossed the region this month, lobbying for strategic influence, building defence ties, and seeking new business opportunities.

India and China are expected to sign a pact that will open the way for Chinese participation in new rail tracks, automated signalling for faster trains and modern stations that India’s British-built rail system desperately needs, having barely added 11,000 km of track in the 67 years since independence.

China, which added 14,000 km of track in the five years to 2011, is also pushing for a share of the lucrative high-speed train market in India, which it says would be cheaper than Japanese proposals.

“India has a strong, real desire to increase its cooperation with China and other countries to perfect and develop its rail system, and has concrete cooperation ideas,” Assistant Chinese Foreign Minister Liu Jianchao told reporters ahead of Xi’s trip.

“India is considering building high-speed railways, and China has a positive attitude towards this.” India and China are expected to sign a pact that will open the way for Chinese participation in new rail tracks, automated signalling for faster trains and modern stations that India’s British-built rail system desperately needs, having barely added 11,000 km of track in the 67 years since independence.

China, which added 14,000 km of track in the five years to 2011, is also pushing for a share of the lucrative high-speed train market in India, which it says would be cheaper than Japanese proposals.

“India has a strong, real desire to increase its cooperation with China and other countries to perfect and develop its rail system, and has concrete cooperation ideas,” Assistant Chinese Foreign Minister Liu Jianchao told reporters ahead of Xi’s trip.

“India is considering building high-speed railways, and China has a positive attitude towards this.”

China’s Consul General in Mumbai, Liu Youfa, told last week that Chinese investment in the modernisation of India’s railways could eventually touch $50 billion.

Beijing’s bid to ramp up commercial ties in India comes despite a territorial dispute that has flared anew in recent years, raising concerns in New Delhi, where memories of a humiliating border war defeat in 1962 run deep.

It follows a pledge by Japan to invest $35 billion in India over the next five years – including the introduction of bullet trains – and a drive to deepen security ties during talks earlier this month between Modi and Prime Minister Shinzo Abe in Tokyo.

Beijing is looking to invest another $50 billion in building India’s ports, roads and a project to link rivers, part of an infrastructure push that Modi has said is his top priority to crank up economic growth.

Chinese investment will also help narrow a trade deficit with India that hit $31 billion in 2013.

From economic parity in 1980, China’s growth has outstripped India’s fourfold. Beijing is now seeking to recycle some of its vast export surpluses into foreign investment in resources and infrastructure in South Asia to feed its industrial machine.

Beijing is looking to invest another $50 billion in building India’s ports, roads and a project to link rivers, part of an infrastructure push that PM Modi has said is his top priority to crank up economic growth.