Xi and Modi have a historic opportunity

IF all goes according to plan, the long-anticipated three-day visit to India by Chinese President Xi Jinping - which starts on Wednesday - has the potential to transform the China-India relationship into a long-term win-win partnership.

Mr Xi will first visit Indian Prime Minister Narendra Modi's home state of Gujarat, where he arrives on Mr Modi's birthday, before flying on to New Delhi. There is some positive momentum for Mr Xi to build on: Mr Modi is no stranger to China. He has visited the country in 2011 as chief minister of Gujarat, and his home state has received most of the Chinese investment that has gone into India so far. Chinese officials view him as pragmatic and business-friendly. Mr Modi is also known to harbour a deep desire to strengthen India's economic links with China.

If the reported intentions on both sides are anything to go by, Mr Xi's visit could be the most substantive and far-reaching yet by any Chinese leader to India. Chinese diplomats have revealed that China intends to invest a whopping US$100 billion over the next five years in India, about three times the amount pledged by Japan. China is seeking to help modernise India's railways, build industrial parks, ports, roads, waterways and other infrastructure.

For its part, India is seeking greater access to China's markets for services - especially information technology services, as well as pharmaceuticals and textiles. If even some of this works out, both sides stand to reap huge benefits. India will get a lot of the infrastructure investment and expertise it badly needs. China would be able to deploy much of its spare capacity for infrastructure building that has been freed up as the domestic economy has slowed and investment spending has softened. India's US$35 billion-plus annual trade deficit with China may narrow or be covered by investment inflows.

Most importantly, China and India would get locked into a long-term economic partnership as investment flows propel trade flows in a virtuous circle. A burgeoning economic relationship could, over time, overshadow some of the other, sometimes difficult, issues between the two countries.

Many of those issues remain. One is a long-standing border dispute. Another is India's concerns about China's aggressive economic diplomacy in South Asia, encompassing Nepal, Sri Lanka and the Maldives - Mr Xi will also be visiting the latter two countries. China's strategic and military links with Pakistan also worries New Delhi. For its part, China is, in particular, wary of India's growing closeness to Japan - which in a way gives Mr Modi some leverage in his dealings with Beijing.

While mutual suspicions between China and India are not likely to evaporate anytime soon, they could become less and less of an irritant as the economic relationship moves to centrestage. Mr Xi and Mr Modi have a historic opportunity to make this happen.