Moody’s visit to China signs improving relations

When Foxconn recalled hundreds of Chinese engineers from a factory in India last month, It is said After Beijing’s trends to reduce the transfer of technology to its neighbor, it was a reminder of the unstable relationships between two of Asia’s largest economies.

But with both countries the tariff heat from Washington, can economic challenges be pushed by Beijing and New Delhi towards reluctant cooperation, which turns their hostile relationship?

This possibility will be tested during the weekend in Tianjin, where the Prime Minister in India Narendra Modi is scheduled to meet at the Summit of the Fifteenth Cooperation Organization in Shanghai. This will be the first visit to China for seven years, after the deadly Galwan Valley was strained between Indian and Chinese soldiers in 2020.

New Delhi and Beijing can participate in talks in Tianjin, where the Indian Foreign Ministry indicated the possibility of bilateral meetings on the sidelines of the summit.

Chinese Indian experts do not largely see that the summit is the beginning of a long -term friendship between the two countries. “The doubts in China are deeply working in India,” said Amit Bhandari, his oldest colleague in energy, investments and communication, at Think Tank Gateway House. But in the face of American definitions and changing supply chains, China and India find themselves heading towards each other.

During his two -day visit to Delhi, last week, Chinese Foreign Minister Wang Yi said that India and China should look at each other as “partners” instead of “opponents or threats”.

“It is unlikely that Chinese partnership is like India with Russia or the United States,” said Bhandari.

India has the surplus of merchandise trade with the United States, with $ 45.8 billion as of 2024. On the other hand, He – she He has an expanded deficit with China, Something he was trying to make him unable, but he could not do it. India’s trade deficit with China reached $ 99.2 billion for the year ending in March 2025, an increase of about 85 billion dollars in the previous year, with total imports from Beijing, which reaches the highest level at all times 113.45 billion dollars.

“Our interests related to commercial deficit are two of the fissure. One of them is the actual size of the deficit. Two is the fact that the imbalance was constantly expanding year after year,” according to the Indian embassy in China. “We continue to involve the Chinese side to address market access issues.”

China’s close relationship with Pakistan is another painful point for India. According to a report From the Stockholm International Peace Research Institute, China presented major weapons to 44 states in 2020-24, with nearly two-thirds of weapons exports, or 63 %, to go to Pakistan. The report said that China provided 81 % of arms imports in Pakistan from 2020 to 2024, compared to 74 % between 2015 and 2019.

SCO meeting is unlikely to solve conflicts or healing old wounds between neighbors, according to experts. But the presence of Modi in Tianjin can be a sign of willingness to find a common ground.

Many industries in India depend heavily on China.

“As for the naturally -based natural applications of the chemical applications (active pharmaceutical components), China provides 70 % of India’s requirements while applying applications (APIS BIOSIIMIRAR) provides approximately 90 % “.

Electric vehicles are another industry in which India relies heavily on Chinese supplies.

In order to reduce the raw import bill, the Indian government set ambitious targets to adopt electric cars. EVS aims to a 30 % account of new car sales by 2030, an increase of 7.6 % in 2024, according to data from the Indian government policy Niti aayog.

This is tall given that most Indian EV manufacturers depend on China to provide major elements such as rare Earth magnets. “Our government has pushed the auto industry in a position in which China depends on the main components such as rare land magnets, lehium and cobalt … so the main manufacturing industry is subject to turmoil.”

Last week, during his visit to India, the Chinese Foreign Minister confirmed that his country will address India’s need for rare land, boring tunnel machines and fertilizers.

China will also stand a profit from strengthening trade relations with its neighbor. India has banned many Chinese companies from working in the country. The ban on a variety of companies from e -commerce companies such as Shein has affected the social media platform Tiktok.

Access to the Indian market can be a large boost for Chinese companies at a time when the slowdown in local consumption. For example, the EV market in India provides a room for Chinese companies to grow because it faces intense competition at home.

“Byd will love to open a factory in India, and now that Vietnam has already been allowed. Chinese industries are dealing with excessive production and excessive ability and with demand from the United States market, they need other markets,” Kishor said.

In other signs of relations declining, after Wang’s visit, direct flights from India to China were set to the main mainland, which has been suspended since the beginning of the Covid-19 in 2020, to resume it. The two sides agreed to reopen the border trade at three custom trading points.

Al -Eqtisad newspaper reported in July that Indian companies such as reliaCE independence and Adani Group are following partnerships with Chinese companies, the economic times mentioned in July.

Although signs are positive, long doubts and border disputes make it difficult to see the two countries as close partners. The Sco meeting will make a greater explanation about how the elephant and Tango are in the step-and how long.