Could Xi Jinping's visit be a turning point in India-China relations?

China desperately needs new markets to create jobs within China, and new relationships to counter Japan and the US. And India desperately needs money to set up infrastructure projects that could generate jobs for Indians almost immediately. Thus India and China have mutual inter-dependencies which can only strengthen and benefit each other.

Just a fortnight ago, media-persons in India and in many parts of the world were agog with expectations that India and Japan could become the best of friends. Maybe, they still will.

But it could turn out to be hype as well. China may still be able to beat Japan as India's best friend, should discussions between the two heads of India and China work out well. After all, China had already begun planning its strategic moves on deepening the India-China relationship almost three years ago. The ascent of Narendra Modi to the post of prime minister of India only gave those plans a sharper focus.

China's planners knew, even then, that an economic slowdown was just round the corner. The past two years have seen many factories close down, as markets in the US and in the EU have begun to shrivel and shrink. Real estate prices have started plunging downwards in China bringing to a virtual halt all construction-related activity.

Unlike India, China knows that much of the resultant unemployment will take place in the urbanised centres of that country. The earlier Hukou system which mandated separate passports for rural and urban dwellers has suddenly become a major liability. If the unemployed go back to their respective villages, they could spread disaffection in rural areas. If they continue to remain unemployed in China's cities they could become large clusters of unhappy people which could lead to social unrest and even pose a threat to the current political establishment.

The visit of Xi Jinping must be seen in this light. This is because Xi Jinping is the general secretary of the Communist Party of China, the president of the People's Republic of China, and the chairman of the Central Military Commission. Like Modi, he too has grabbed almost all the levers of power. Both are arch nationalists, but are extremely market savvy. And both know that together they could become more formidable and economically vibrant.

That could explain why India has begun reconsidering the grant of a high speed train route to China. Earlier, India had informed China – albeit unofficially – that it could be considered for upgrading all the railway tracks in India. But setting up a high-speed train route was dismissed for the time being. That has now changed. Also on the anvil is the grant of one or two SEZs to China.

One reason could have been the paltry sums committed to India by Japan. At $34 billion, the amount represented barely one-fourth the total outlay of the Delhi-Mumbai Industrial Corridor (DMIC), let alone other big projects that Japan had been eyeing.

China, on the other hand, had informally committed itself to investing up to $300 billion in India, if only India would identify the projects where such sums could be profitably deployed.

China was also quick to inform India that all the trade deficit that India faced in its commercial dealings with India could be neutralised by using the difference as equity funds for Indo-China projects.

Of course, both India and China know that the stakes are very high for both sides. It will not be surprising, therefore, if both countries manage to find a way to reach a solution to the land and water disputes that have been sore issues in their bilateral relations.

Unlike the recent Japan visit, the visit of the Chinese president has seen a lot less hype. But expect the volumes of business transacted to be a lot more.

That is why, if all goes well, this trip could herald a turning point in global economic relations.