India, China take steps to ease disputes, enhance trade

SANYA, China, (Reuters) – India and China have  agreed to restore defence ties and will exchange visits by their  top leaders as well as take steps to enhance their balance of  trade, India’s National Security Adviser Shiv Shankar Menon said  yesterday.

The two will also set up a consultation mechanism for a  long-running border dispute, Menon said, in a sign that the  Asian giants are willing to sidestep contentious issues to align  with each other on global platforms like the G20.

India and China suspended military ties last year after  Beijing denied a visa to an Indian army general from disputed  Kashmir. India also has broad suspicions about China’s close  relationship with Pakistan.

But Menon described a 50-minute meeting between Indian Prime  Minister Manmohan Singh and Chinese President Hu Jintao ahead of  a summit of emerging powers in the southern Chinese resort of  Sanya as “very productive, warm, friendly”. The two sides reached in principle agreement on establishing   a “working mechanism for consultation and coordination on border  affairs,” he added.

“This will handle important border affairs relating to  maintaining peace and tranquility,” Menon said, though he added  that “in practice it is one of the most peaceful borders that we  have.”