Indian PM and Chinese President Meet Amid Trade Tensions with US
Prime Minister Narendra Modi and Chinese President Xi Jinping held bilateral talks in Tianjin on the sidelines of the Shanghai Cooperation Organisation (SCO) summit. The meeting, Modi's first visit to China in seven years, is seen as crucial for stabilising economic ties and normalizing relations strained by border disputes. The discussions are set against a backdrop of new US trade tariffs affecting both nations, with leaders expected to explore ways to bolster regional economic stability in response to global volatility.
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The primary cause was a violent clash along their disputed Himalayan border in 2020, resulting in at least twenty-four soldiers' deaths. This incident led to heightened tensions and retaliatory economic measures, including India's app bans and restrictions on Chinese investments.
China is India's largest trading partner, but the relationship is marked by a significant and growing trade deficit—reaching $99.21 billion in 2024–2025—mainly due to India's reliance on Chinese exports of machinery, electronics, and components. Mutual investments remain relatively low compared to trade volumes.
Recent US tariffs have affected both India and China, prompting them to seek stronger regional economic stability in response to global trade volatility. India's position is complicated, as it remains economically tied to China while also being courted by the US to help diversify global supply chains.
The Shanghai Cooperation Organisation (SCO) summit gathers major Eurasian powers, providing a platform for India and China to address bilateral and regional issues in a multilateral setting. It enables both leaders to discuss economic cooperation and regional security amidst broader geopolitical tensions.