China talks trade, economic potential on visit to new India government

By Tommy Wilkes and Frank Jack Daniel NEW DELHI (Reuters) - China's Foreign Minister Wang Yi promised on Sunday to help India's economic development and emphasised that the two countries see eye-to-eye of most issues, playing down difference over a trade deficit and a festering border dispute. Wang was visiting India as a special envoy of China's president on a two-day trip designed to show Beijing's interest in improving cooperation between the world's two most populated nations on issues including regional security. The trip came two weeks after India's Prime Minister Narendra Modi won a resounding majority in a general election on promises of reviving a flagging economy. "China stands by your side throughout your efforts of reform and development," Wang told the Hindu newspaper. "No country can choose its neighbour, but friendship may be fostered," he said, calling for innovative solutions to resolve the two country's vastly differing perception of where large stretches of their shared Himalayan border lies. Modi is seeking to strengthen India's armed forces and economy, in part to enable him to react more decisively in foreign relations than his predecessor, the mild-mannered Manmohan Singh. Wang met his Indian counterpart Sushma Swaraj on Sunday for talks that lasted more than three hours, the first high-level meeting between the two countries since Modi assumed office. "Both leaders felt that there was tremendous untapped potential for the growth of economic ties," Syed Akbaruddin, spokesman for India's Ministry of External Affairs, told a media briefing following the talks. Akbaruddin said China and India are looking at least six more visits at ministerial level or above this year, a significant intensification of bilateral meetings. China dealt India a humiliating defeat in a short border war in 1962, an event that has cast a shadow over relations ever since, with occasional flare ups along disputed patches of the border to this day. India runs a $40 billion trade deficit with China, and when Modi meets Wang on Monday he is expected to renew India's demands for greater market access to reduce that gap. China's own embrace of an export-led model has helped its economy outgrow India's fourfold since 1980. At the meeting on Sunday, Swaraj and Wang raised the possibility of China investing in industrial parks in India, a move that could help rebalance trade. "DECEPTION" The foreign minister's trip was met with small street protests in New Delhi by Tibetan exiles who called on Modi to challenge Wang about ongoing repression in the restive Chinese region that shares deep cultural ties with India. Tibet's spiritual leader the Dalai Lama last week angered Beijing by praying for the "martyrs" of the Tiananmen Square massacre by Chinese forces 25 years ago. He called on China to embrace democracy. Lobsang Sangay, the political leader of Tibetans in exile also stirred things up by reviving a campaign to bring about a government in Tibet with more autonomy. Wang's trip is a precursor to an expected visit to India by Xi Jinping later this year, on Modi's invitation. Since assuming power on May 26, Modi, from the nationalistic Bharatiya Janata Party (BJP), has moved quickly to assert India with neighbouring countries. He invited regional leaders including the prime minister of traditional rival Pakistan to his inauguration. But despite the bonhomie, many of Modi's allies have a hawkish view of China, arguing that overtures by India's largest neighbour should not be taken a face value. "Diplomacy, for them, is an art of deception," wrote Ram Madhav, a senior leader of the Rashtriya Swayamsevak Sangh (RSS), a hardline Hindu nationalist organisation that has close ties to the BJP. Most government ministers, including Modi, are long term activists in the RSS and its offshoots. "The Modi government should realise that the real foreign policy challenge comes not from Pakistan but from China," he said in a column in the Indian Express newspaper on Sunday. Modi's national security advisor, Ajit Doval, a daring former spy chief, also harbours doubts about China's motives, writing a series of papers in recent years alleging that Chinese agents have provided money and arms to insurgent groups in India's remote and troubled northeast. Both the RSS and Doval are seen as sympathetic to the cause of autonomy in Tibet. Wang is due to meet Doval on Monday. (Writing by Frank Jack Daniel; Editing by Sophie Hares)