Chinese President Xi Jinping, Indian Prime Minister Narendra Modi and President of the United States Barack Obama came together for a heady week of negotiations, multi billion dollar deals, photo ops with business and technology leaders and bids to seal the growth of their nations.
As each economy carefully hinges on that of the other, both Mr. Modi and Mr. Xi coaxed larger investments from the worlds richest democracy in exchange for a small piece of the pie that America always wanted – better transparency, a curb on corruption, protection of intellectual property rights, climate change enforcement’s and opening up their economies further.
While meetings hussled around the UN general assembly, Modi and Xi both received accolades for their work in American Media. China having a larger economy and much higher trade targets than India, found herself on more front pages than Mr. Modi who is holding on tightly to the sheen of his India shining. India and the US are hoping to increase bilateral trade to US$500 billion in the next few years from the current US$120 billion. China’s bilateral trade with the US is already around the US$500 billion mark.
The idea was for each megalomaniac leader to drum up investments and create an international stir to drive their economy forward. For Modi this 2nd trip to the US was a whirlwind affair braced at pushing his “Made in India” campaign tweaked at increasing India’s manufacturing sector which will hopefully absorb the millions leaving agrarian land and graduating by 2020. For Xi, this was his first state visit to the US, marked by a lavish state dinner hosted by US President Barack Obama at the White House.
His statement was to boost the Chinese economy with the higher value goods, services and American expertise. In addition to hob-nobbing with leaders in Washington, Xi visited Seattle and Modi Silicon Valley. Xi began his week-long visit in Seattle addressing a gathering of 650 business executives, while Modi chose New York to kick off his five-day visit, addressing two round tables—one of financial investors and another with representatives of media and communication companies including Comcast, Time Warner, Discovery, Sony, ESPN, News Corp., 21st Century Fox, Disney and the ABC television group.
He then flew to California to meet key business leaders in the US technology business including Apple’s Cook, Tesla Motors Inc.’s CEO Elon Musk and Facebook’s Zuckerberg.
If Xi managed the distinction of being surrounded by 30 top US and Chinese entrepreneurs whose combined worth was estimated by Forbes magazine to be US$2.5 trillion, Modi secured a dinner meeting with a group of 42 CEOs from Fortune 500 companies whose combined net worth was estimated by the Indian foreign ministry spokesman at US$4.5 trillion.
Xi met Amazon.com Inc. founder Jeff Bezos, billionaire investor Warren Buffett, Microsoft Corp. CEO Satya Nadella, Apple Inc.’s Tim Cook, International Business Machines Corp.’s chairman and CEO Ginni Rometty, Lisa Su, CEO of chipmaker Advanced Micro Devices Inc., Cisco Systems Inc.’s executive chairman John Chambers and Facebook Inc. CEO Mark Zuckerberg.
The list of CEOs who met Modi was equally impressive—Rupert Murdoch, chairman of News Corp.; Ajay Banga, president and CEO of MasterCard Inc., who also chairs the US-India Business Council; Marilyn A. Hewson, chairman, president and CEO of Lockheed Martin Corp.; Citigroup Inc. chairman Michael O’Neill; Boeing International president Marc Allen, and Goldman Sachs president Gary Cohn.
Foreign policy hangs precariously on the shoulders of large defence deals. Its important therefore for India and China to procure from her wealthier neighbours machines that secure a stable relationship and safeguard their nations. Consequently, Xi announced a US$38 billion deal for 300 jets from Boeing, according to a Reuters report.
Separately, China’s ICBC Financial Leasing Co., a unit of the Industrial and Commercial Bank of China, confirmed it would buy 30 Boeing 737-800 jets, worth US$2.88 billion. China’s state-owned Commercial Aircraft Corp. also signed a cooperation agreement with Boeing to build a 737 aircraft assembly centre in China. And just before Xi’s visit, personal computer maker Dell Inc. announced plans to invest $125 billion in China over the next five years.
In the case of India, Modi is expected to announce a decision by the government to buy 22 Apache attack helicopters and 15 Chinooks for US$2.5 billion from Boeing. The deal was cleared by the Indian cabinet last week ahead of Modi’s visit. Modi also won support for his Digital India initiative from Silicon Valley firms like Google, which confirmed plans to launch free WiFi in 500 Indian railway stations, and Microsoft, which pledged to bring low-cost broadband to 500,000 Indian villages. Paul Jacobs, executive chairman of Qualcomm Inc., announced a US$150 million investment in Indian start-ups. On his part. Modi invited Apple to set up a manufacturing base in India.
If this happens, it will help boost Modi’s Make in India programme that aims to make India a manufacturing hub. In exchange for America’s capital and technology, both India and China have pledged to enforce stricter rules on intellectual property, create transparent and accountable systems, curb corruption and open their markets and streamline policies. Considered hurdles for foreign investors, keen to pump capital and personel into developing markets, alterations and agreements in these policies pushed by America will set the agenda for the next decade.