Foreign Secretary Vijay Gokhale, right, and Naveen Srivastava, Joint Secretary, addressing the media.M.Vedhan  

Chinese President Xi Jinping on Saturday said there had been a “healthy and steady development” in the India-China relationship after last year’s Wuhan “informal summit”.

Mr. Xi, who was in Mamallapuram for the second ‘informal summit’ with Prime Minister Narendra Modi, pointed out that both India and China, neighbours and important to each other, “are the only two countries with over 1 billion people”.

The Chinese President said that he and Mr. Modi had engaged in “candid conversations like friends and heart-to-heart discussions on bilateral relations”. He lauded the Union and Tamil Nadu governments and the people of the State for their hospitality.

In their talks, both sides agreed to set up a high-level economic and trade dialogue mechanism to look into mutual concerns.

The development assumed importance in the light of India repeatedly expressing concern about its trade deficit of more than $50 billion with China. “Trade deficit is not economically sustainable and it is also something that is sensitive to the domestic industry,” Foreign Secretary Vijay Gokhale said.

Asked what “visible progress” the bilateral ties had witnessed since the Wuhan summit, Mr. Gokhale said there had been “greater recognition” by China of economic and trade level matters [that concerned India]. The Chinese President, during the deliberations, had agreed to have the issue of trade deficit addressed, which was “visible progress”.

Mr. Modi and Mr. Xi also agreed to explore the possibility of forming a “manufacturing partnership” through the proposed mechanism.

The Prime Minister suggested that both sides identify specific industries or sectors where investment could come in, adding that manufacturing would help create employment, jobs and enhance the market for both sides.

Answering presspersons’ questions, Mr. Gokhale said the new mechanism would discuss the relaxation of visas for IT professionals.

As for India signing the Regional Comprehensive Economic Partnership (RCEP) agreement, he said Mr. Modi had stressed the importance of ensuring that the RCEP was “balanced”. Besides, balance should be maintained between trade in goods, services and investment. China was of the view that India’s concerns should be considered.

India and China had agreed that “it is important to support and strengthen the rules-based multilateral trading system at a time when globally agreed trade practices and norms are being selectively questioned,” the External Affairs Ministry said in a release. “India and China will continue to work together for open and inclusive trade arrangements that will benefit all countries.”

Mr. Modi and Mr. Xi had also urged the special representatives of the two countries to “continue their efforts to arrive at a mutually agreed framework for a fair, reasonable and mutually acceptable settlement [of outstanding issues including on the boundary question] based on Political Parameters and Guiding Principles that were agreed by the two sides in 2005,” the release said.

Mr. Gokhale said President Xi was keen on strengthening the collaboration between the two countries in defence. China had extended an invitation to Defence Minister Rajnath Singh to visit the country.

Mr. Xi had invited Mr. Modi to visit China for a third ‘informal summit and the Prime Minister had accepted the invitation, the Foreign Secretary added. Mr. Xi left for Nepal on Saturday.

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