Chinese President Xi Jinping, centre, talks to Indian Prime Minister Narendra Modi at the Brics summit in Johannesburg on Thursday. EPA
Chinese President Xi Jinping, centre, talks to Indian Prime Minister Narendra Modi at the Brics summit in Johannesburg on Thursday. EPA
Chinese President Xi Jinping, centre, talks to Indian Prime Minister Narendra Modi at the Brics summit in Johannesburg on Thursday. EPA
Chinese President Xi Jinping, centre, talks to Indian Prime Minister Narendra Modi at the Brics summit in Johannesburg on Thursday. EPA

India's Modi and China's Xi to prioritise efforts to de-escalate border tension


Taniya Dutta
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Indian Prime Minister Narendra Modi and Chinese President Xi Jinping have agreed to prioritise efforts to de-escalate tension at their contested border.

The nuclear-powered nations share a nearly 4,000km border known as the Line of Actual Control (LAC) that crosses the Himalayas from the Ladakh region in the north to the eastern Indian state of Arunachal Pradesh. The frontier is not demarcated.

India’s Foreign Secretary Vinay Kwatra said Mr Modi held brief conversations with the leaders Brazil, China, Russia and South Africa on the sidelines of the two-day Brics summit in Johannesburg on Thursday.

In his conversation with Mr Xi, Mr Modi “highlighted India’s concerns on the unresolved issues” along the contested border.

Diplomatic ties between India and China have been frosty since their troops were involved in deadly clashes in 2020, along the part of the border that lies in the Ladakh region.

“Prime Minister Modi underlined the maintenance of peace and tranquillity in the border areas and observing and respecting the LAC are essential for normalising the India-China relationship,” Mr Kwatra told reporters.

“The two leaders agreed to direct their relevant officials to intensify efforts at expeditious disengagement and de-escalation.”

A convoy of Indian army vehicles travels through the cold desert region of Ladakh in September 2022. AP
A convoy of Indian army vehicles travels through the cold desert region of Ladakh in September 2022. AP

There have been several rounds of high-level talks between senior military commanders and Foreign Ministry officials from both sides but without significant progress.

The two nations held the 19th round of the India-China Corps Commander Level Meeting at the Chushul-Moldo border meeting point on the Indian side on August 13 and August 14.

They fought a deadly war over the disputed border in 1962, with Beijing briefly capturing parts of Arunachal Pradesh before unilaterally withdrawing its troops.

In June 2020, Indian and China soldiers armies attacked each other with iron rods and clubs in Ladakh’s Galwan Valley.

At least 20 Indian soldiers and four Chinese soldiers died fighting on pathways near steep cliff edges.

The clash triggered the mobilisation of tens of thousands of soldiers from both sides to the treacherous high-altitude border.

While the troops withdrew from a key area in the disputed Eastern Ladakh region in September, many other potential flashpoints remain.

Chinese forces continue to block access to traditional areas of patrol for the Indian military in the Depsang Plains and Charding Nala regions on the LAC.

The Depsang Plains are a plateau at an altitude of 4,800 metres. Chinese troops allegedly occupy an 18km area that India considers its own territory.

Beijing has consistently refused to accept those areas as Indian territory.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: November 13, 2023, 10:46 AM