'There is no objective reason for discord' between India and China, Prime Minister Atal Bihari Vajpayee told students at the Peking University on Monday.

But while contending that India and China were not a threat to each other, he referred to the border dispute, saying, "One cannot wish away the fact that before good neighbours can truly fraternise with each other, they must first mend their fences."

Referring to the future of Sino-Indian relations as a 'tryst with destiny', the prime minister, who is on a six-day official visit to China, said he was encouraged by his talks with Chinese Premier Wen Jiabao.

According to foreign ministry sources, during his talks with Vajpayee, Wen said China wanted to see historical disputes with India gradually phased out.

Vajpayee inaugurated a Centre for Indian Studies at the Peking University before addressing the students.

The prime minister referred to the 'rivalry' that is often perceived to exist between the two countries. "It is an unavoidable characteristic of human nature that there is always a sense of competition between two close and equal neighbours," he said, adding that healthy and good-natured economic competition is a positive phenomenon and should not be shied away from.

True to style, his speech had a fair sprinkling of poetry, quoting from both Taoist mystic Lao Zi and Rabindranath Tagore.

"This is the first time that I am getting the opportunity to hear any Indian poet," said a second year student of Chinese literature, referring to the Tagore quotation with which the prime minister closed his speech.

"I was really moved by him," said another student. "He looked just like my grandfather and made me think how alike we all are."

The address lasted around half-an-hour and was not followed by a question and answer session, which was a disappointment for some students.

"I hope that he comes back again some day," said a student.