India's Modi meets Xi on China visit amid warming ties

XI'AN, China — President Xi Jinping praised China's warming ties with India during a meeting Thursday between the leaders of Asia's rising powers and rivals, which included a rare touch of personal diplomacy for a Chinese leader.

Xi met with Indian Prime Minister Narendra Modi at a sprawling government guest house in Xi'an, the capital of Shaanxi province, from which the president's family hails. China-India relations "are experiencing stable development and facing broad prospects", Xi was quoted as telling Modi by China's official Xinhua News Agency.

The exchanges highlight warming ties between the two powers — the world's most populous nations with a combined 2.6 billion people — despite their continuing rivalry and contrasting political systems. That trend has gained momentum by the personal authority enjoyed by the two men, who are widely seen as their countries' strongest leaders in years.

Modi's visit will "push forward the bilateral strategic partnership to achieve new progress, which has potential for greater development," Xi said.

Clad in traditional Indian dress, Modi earlier visited the museum dedicated to China's famed Terra Cotta Warriors and a Buddhist temple housing works translated from Sanskrit — a reminder of the ancient cultural links between the two Asian giants.

Amid heavy security, large crowds turned out to greet his motorcade, prompting the prime minister to tweet: "Am very glad to see the enthusiasm among the people of China. People-to-people ties are always special."

The visit to the central Chinese city marks the first time Xi has hosted a visiting foreign leader in his ancestral home, a conscious display of hospitality underscoring his intention to build a strong personal relationship with Modi.

Xi is reciprocating the Indian leader's invitation to his own hometown of Ahmedabad during a visit to India last year. Chinese leaders almost never receive their foreign counterparts in anything other than formal settings in Beijing.

Xi said his September to India visit resulted in "an important consensus on promoting the bilateral strategic partnership of cooperation and forging a closer partnership of development”, according to Xinhua.

China is looking to India as a market for its increasingly high-tech goods, from high-speed trains to nuclear power plants, while India is keen to attract Chinese investment in manufacturing and infrastructure. With a slowing economy, excess production capacity and nearly $4 trillion in foreign currency reserves, China is ready to satisfy India's estimated $1 trillion in demand for infrastructure projects such as airports, roads, ports and railways.

Modi's top priority in China is finding ways to reduce India's $48 billion trade deficit with its neighbour through greater market access for Indian goods and services and by convincing Chinese companies to manufacture in India.

Indian and Chinese officials have said the sides plan to sign investment deals and trade agreements during Modi's visit worth about $10 billion, the official China Daily newspaper reported Thursday.

Xi and Modi are also expected to discuss efforts to end a border dispute that sparked a bloody monthlong conflict in 1962. No resolution is expected soon, although the sides have been in close contact to avoid flare-ups.

India has also grown increasingly concerned about forays by Chinese naval vessels, including submarines, into what New Delhi considers its strategic backyard. China's navy is active in the Gulf of Aden as part of anti-piracy patrols, and Beijing has heavy invests in port facilities in Sri Lanka and Pakistan.

Another divisive issue is China's deep ties with Pakistan, India's archrival, where Xi received a lavish reception last month. China has committed to invest up to $46 billion in Pakistani power generation and other projects.

Meanwhile, the presence of Tibetan spiritual leader the Dalai Lama in India rankles Beijing, although New Delhi has avoided using him as a diplomatic foil. China reviles the Buddhist cleric, who fled to India in 1959, as a separatist.

Beijing is also concerned about India's improving relations with Japan and the US — China's chief rivals for influence in Asia. Xi's desire to build a strong personal bond with Modi can be seen as an attempt to ensure China ranks high in his affections and improve coordination on regional and international issues.

Both countries are members of the BRICS grouping of emerging economies, which is now establishing a formal lending arm, the New Development Bank, to be based in China's financial hub of Shanghai and headed by a senior Indian banker.

India was also a founding member of the embryonic China-backed Asian Infrastructure Investment Bank, which seeks to emulate institutions such as the World Bank and International Monetary Fund.

Modi will talk with officials including Premier Li Keqiang in Beijing on Friday before going to Shanghai for activities focusing on trade relations.