India and China on Monday announced to hold their second joint military exercises this year and welcomed the 'progress' in negotiations on the boundary issue.
 
Prime Minister Manmohan Singh [Images] and Chinese counterpart Wen Jiabao during extensive talks agreed to substantially enhance economic engagement by stepping up bilateral trade target from $40 billion to $60 billion by 2010.

Building on the goodwill generated by the landmark handshake between the world's two powerful armies last month in Kumming in China, the two leaders decided to have a second military exercise in India.

"We have agreed to continue to deepening mutual understanding and trust between our armed forces and welcome the successful first exercise in Kumming," Dr Singh said.

On the outstanding boundary question, the two sides had 'successful' discussions, the prime minister said at a press conference after the talks at the ornate Great Hall of the People.

"We welcome the progress made by Special Representatives for seeking a framework for settlement of the boundary question that is fair, reasonable and mutually acceptable and based on guiding principles and political parameters signed in April 2005."

While the special representatives will continue the discussions, both sides reiterated their mutual commitment to maintaining peace and tranquility on the border. 

On the festering border question, the two sides remained firmly committed to resolving outstanding differences through peaceful negotiations while ensuring that such differences are not allowed to affect the positive development of bilateral relations.

They reiterated their determination to seek a fair, reasonable and mutually acceptable solution to the boundary question and to 'build a boundary of peace and friendship' on the basis of the Agreement on Political Parameters and Guiding Principles for the Settlement of the India-China Boundary Question concluded in April, 2005.

The Special Representatives of the two countries have already held 11 rounds of negotiations on the border row.

The Chinese side was happy with India's reiteration of its 'one-China' policy and Premier Wen made a special mention of it in his remarks at the conclusion of the discussions on Monday.

"We appreciate India's support to China on the question of Taiwan," he said.

The joint statement said the Indian side recalled that India was among the first countries to recognise that there is one China and that its one-China policy has remained unaltered.

The Indian side stated that it would continue to abide by its one-China policy and oppose any activity that is against the one-China principle. The Chinese side expressed its appreciation for the Indian position, it said.  

Broadening their emerging defence cooperation, the two sides decided to continuously promote confidence building measures through steadily enhanced contacts. They welcomed the commencement of the India-China Defence Dialogue.

The two sides also welcomed their efforts for cooperation on trans-border rivers, which commenced on 2002.

The Indian side thanked China for providing flood season hydrological data, which helped India in ensuring the safety and security of its population in the regions along the trans-border rivers. The two sides agreed that this has contributed positively to building mutual understanding and trust.

The two prime ministers strongly condemned the scourge of terrorism in all its forms and manifestations and in all regions of the world.

They pledged to work together and with the international community to strengthen the global framework against terrorism in a long-term, sustained and comprehensive manner.

The two sides believed that cultural and religious tolerance and dialogue between civilisations and peoples will contribute to overall peace and stability of the world.

The two countries also decided to hold festivals of India and China in each other's country in 2010.

India and China supported and encouraged the processes of regional integration that provide mutually beneficial opportunities for growth as an important feature of the emerging international economic system.

The two sides positively viewed each others' participation in regional processes and agreed to strengthen their coordination and consultation within regional cooperation mechanisms.

They will explore together and with other countries a new architecture for closer regional cooperation in Asia and make joint efforts for further regional integration of Asia.

The two countries will strengthen their coordination under the framework of Asia-Europe meeting and are committed to strengthening and deepening Asia-Europe comprehensive partnership.

Welcoming the positive facets of economic globalisation, the two sides believed that the establishment of an open, fair, equitable, transparent and rule-based multilateral trading system is the common aspiration of all countries.

The two sides favoured the early conclusion of the Doha Development Round, placing the issues that affect the poorest of the poor at its core. The two sides are determined to strengthen their coordination with other developing countries in order to secure their shared objectives.