Even before he shook hands with Prime Minister Narendra Modi during the SCO meeting held in Bishkek, the capital of Kyrgyzstan earlier this month, there were speculations that Chinese President Xi Jinping might come to India to participate in the BRICS summit.
On September 12, Xi Jinping proved these speculations true by reaching New Delhi for the 18th BRICS meeting.
This is Jinping's first visit to India in the last seven years.
After the violent clash between Indian and Chinese soldiers in the Galwan Valley in eastern Ladakh on June 15, 2020, there were signs of softening of relations between the two countries when PM Modi reached China to participate in the SCO meeting in 2025.
The question is, what happened after the bitterness increased after the Galwan clash that Jinping agreed to come to India.
Experts say that the answer to this question lies in the rapidly changing geopolitical situation of the world and the growing challenges of China's economy.
China and India may be tough rivals on the border, but on the trade front they are major trading partners.
Face to face on the border but partners in trade
There has been tension between the armies of India and China many times but it has not affected mutual trade.
There is a trade of 151.5 billion dollars between the two countries. However, India's trade deficit with China in 2025-26 is huge. Now it has increased to more than $112.16 billion.
India's industrial ambitions are increasingly dependent on its access to Chinese technology.
India will import electronic and electrical equipment worth about $57 billion from China in 2025.
This figure shows how dependent India is on Chinese components for everything from smartphones to telecom networks to the assembly of electronics. India's pharmaceutical industry is also heavily dependent on China and most of the APIs used in it are imported from China.
On the other hand, China sees India as a big market for its goods. More than 15 crore smartphones sold in India in 2025. 90 percent of these smartphones or their components were imported from China. The Indian market has proved to be a gold mine for Chinese mobile companies like Xiaomi, Vivo and Oppo.
China is eyeing India's car market, where 45 lakh cars are expected to be sold in 2025. Before 2020, Chinese companies had invested billions of dollars in India's start-up ecosystem.
China's Alibaba Group and Tencent Holdings also made significant funding in Paytm, Zomato, Ola Electric and Byju's.
But after the 2020 clashes, India refused to approve investments from many Chinese companies citing security reasons. At the same time, China had tried to stop its companies from selling rare earth materials, magnets for making cars and other things to India.
Experts say that meanwhile, the geopolitical situation changed rapidly. Trump's tariffs and the US-Iran war dealt a major blow to business sentiment across the world.
Iran war increased China's problems
When Donald Trump imposed tariffs on China in 2025, China's economy was already struggling with slow growth rates and unemployment.
Nevertheless, it showed strength, boosted exports and achieved a growth rate of about five percent.
But economic dissatisfaction is increasing within the country.
China is an exporting country and has a surplus of goods. But after the Iran war, the demand for goods has decreased across the world and it is becoming difficult for China, the world's supplier, to supply its goods.
Journalists keeping an eye on China believe that even though China is a trade surplus country, there is no demand for goods within the country.
This problem of China is slowing down its economy. And this is where it needs the Indian market. India's population of 140 crores is already a big market for it and the scope of this market is continuously increasing. With the rapid growth of the Indian economy, the possibility of consuming Chinese goods is also increasing.
Compared to the Indian government's growth rate of 7.8 percent in the first quarter, China's growth rate of 4.7 percent in the second half is much lower. Therefore, the growth of the Indian market is very important for China.
What crisis is China in?
In view of the slowing economy, China has recently decided to provide cash assistance of about $ 54 billion to its eight state-owned banks and insurance companies so that the financial system can be strengthened and consumer demand will increase.
BBC correspondent Laura Bicker has mentioned the difficulties of China's domestic economy in one of her reports.
She writes, "This country with a population of more than 140 crore people has a huge domestic market but its problem is that despite the economic situation being uncertain, people do not want to spend money. The situation of domestic consumption in China is bad. China has enough goods for export but it seems weak in terms of increasing demand within the country.
"The reason for this is not China's trade war with America but its internal economic conditions. For example, China's huge housing sector has collapsed. China's housing sector, once strong due to cheap loans, has now become a victim of oversupply. On the other hand, people do not have money in their pockets. The situation is such that even the entire population of China will not be able to fill all the vacant apartments across the country.
Laura Bicker reports that He Keng, the former deputy head of China's Bureau of Statistics, admitted two years ago that there were currently enough empty homes for 3 billion people.
Laura Bicker writes that middle-class Chinese families are not just concerned about house prices.
“They are worried about whether the government will be able to give them pension. Over the next decade, about 30 million people, currently aged between 50 and 60, will drop out of the Chinese workforce. “According to a 2019 estimate by the state-owned Chinese Academy of Social Sciences, the government pension fund could be exhausted by 2035.”
She writes that people are also worried about whether their sons, daughters and grandchildren will be able to get jobs or not, because lakhs of graduates are struggling for jobs.
More than one in five people aged 16 to 24 in China's urban areas are unemployed, according to official data published in August 2023. The government has not released youth unemployment figures since then.
The problem is that China cannot shift overnight from selling goods to the US to selling goods to local buyers.
China's trade surplus and India's market
Arvind Yelleri, associate professor in the Department of East Asian Studies at Jawaharlal Nehru University in India, says that even after the Galwan clash, China continued doing business with India.
He told BBC News Hindi, "After Galwan, India could have imposed tougher sanctions in response to the sanctions but it did not do so." China's trade with India has increased continuously in 2022, 2023, 2024. China is well aware that its tier two and tier three businessmen do business with India and this will bring money into its domestic market. This will go a long way in increasing domestic demand.
He says, "China's trade relations with Europe and America have been very good. But after 2017-18, the prospects for China in the market there are not that good.
Arvind Yelleri says, “India wants to diversify its trade but China is aware of its limitations and possibilities. Therefore he wants India to remain dependent on him. So he doesn't want to provoke a captive customer. The way its trade with India is growing, it can reach 200 billion dollars in the next five-seven years.
He says, “China is also working on a long-term strategy with India. He wants to normalize relations with India on the geopolitical and political front by increasing cooperation on the trade front.
Arvind Yelleri says, “China has huge surplus. But the costs of manufacturing goods are continuously increasing. The goods are lying ready and there is no demand in the domestic market. China wants the surplus market to be spent in the world market and then the money should be used to increase demand in the domestic market. That's why it needs a country with a huge market like India.
Business will continue and so will gambling.
Last year, India and China resumed direct flights. India had eased the visa process for Chinese business professionals. Still, the business rivalry between India and China will not end so easily.
News agency Reuters wrote in one of its reports, "The proposal to connect China's Ali Pay with India's instant payment system has been refused approval." This payment service linked to China's Ant Group has been stopped due to national security concerns.
