Flourishing political interaction, uninterrupted dialogue channels and stronger mutual trust between China and India in 2003 helped in 'progress' in dealing with 'problems left over from history', the Chinese foreign ministry has said.

Observing that then prime minister Atal Bihari Vajpayee's visit to China in June last year was a 'major event' in Sino-India relations, the ministry, in its just-released 'China's Foreign Affairs 2004 Edition', said, 'Progress was made
in straightening out the problems left over from history.'

'The visit went a long way towards improving China-India relations and opened a new page in the all-round cooperation between the two countries,' it said. 'Political interaction flourished with uninterrupted dialogue channels and stronger mutual trust.'

On the Sino-India boundary issue, it noted, the two sides last year decided to designate Special Representatives to deal with the issue and explore a framework solution.

While the year book did not comment on the boundary negotiations, it pointed out that the year 2003 witnessed a
'momentum of positive development in the friendly, good-neighbourly and mutually-beneficial cooperation between
China and India'.

It also noted that in 2003, contacts between the two countries at the highest level 'abounded'.

'High-level contacts were frequent, trade and economic cooperation further expanded and exchanges in the military,
cultural, education and other areas grew steadily,' the year book, released in Beijing yesterday by Chinese Foreign Minister Li Zhaoxing, said.

Apart from high-level meetings between Vajpayee and top Chinese leaders, the two sides also signed the first-ever
joint declaration of principles for relations and comprehensive cooperation in 2003.

Both sides reaffirmed their commitment to a long-term constructive and cooperative partnership under the joint
declaration, the year book said.

Further, India 'clearly recognised the Tibet autonomous region as part of the territory of the People's Republic of China,' it said, referring to New Delhi's reiteration of its policy on Tibet in the joint declaration signed during Vajpayee's visit.

Turning to bilateral trade, it noted that last year trade volumes reached a record US $ 7.595 billion, up 53.6 per cent over 2002.

Progress was also made in border trade following the signing of a bilateral agreement, and both sides also established a cooperation mechanism on fiscal and financial dialogue. Both sides have also decided to set up a joint research group composed of officials and financial experts to map out plans for bilateral economic cooperation.

On the military front, the two countries made 'steady' progress, the year book said.

Recalling former defence minister George Fernandes's visit to China, it said the two sides pledged their readiness to develop a friendly relationship.

Further, an Indian naval fleet made a friendly port call at Shanghai and later joined the Chinese navy in a search and rescue exercise in the east China sea.

'This was the first joint exercise by the two navies in the non-traditional security field,' the year book noted, adding that it strengthened ties between the two militaries as evidenced by the increased number of bilateral visits.

In 2003, China and India also conducted extensive cooperation in international affairs, it said, adding that India backed China on human rights and Taiwan.

Last year, the foreign ministers of China, India and Russia held their second joint meeting, focussing on the international situation and issues concerning the United Nations.

China and India also worked closely at the World Trade Organisation ministerial meeting in Cancun, Mexico, vigorously defending the interests of developing nations, the year book concluded.