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Last Updated: Wednesday, 25 June, 2003, 14:16 GMT 15:16 UK
Deal boosts Vajpayee China trip
Indian Prime Minister Atal Behari Vajpayee (l) meets Jiang Zemin
Vajpayee said relations were transformed
Indian Prime Minister Atal Behari Vajpayee is continuing his trip to China, a day after the two countries signed a landmark agreement easing territorial disputes.

Mr Vajpayee travelled to China's commercial centre, Shanghai, on Wednesday for talks on fostering business ties.

Trade between India and China has grown spectacularly in recent years. Last year the two countries conducted business deals worth US$5bn - a figure which is expected to double or even treble in the next few years.

Relations between the Asian neighbours were boosted on Tuesday, when India formally recognised the area known as the Tibetan autonomous region as part of the People's Republic of China.

China, for its part, agreed to start border trade through the north-east Indian state of Sikkim - a move that is being seen as an acceptance by Beijing of India's claim over that area.

A spokeswoman for the exiled Tibetan spiritual leader, the Dalai Lama, played down the significance of India's declaration on Tibet.

In an interview with the BBC, Kesang Takla said the move did not alter the Dalai Lama's desire for eventual talks with China on self-rule for Tibet.

New ties

Mr Vajpayee, the first Indian prime minister to visit to China for 10 years, said relations had been "transformed" as the two sides sought new ways to overcome their differences.

Map of India and China, showing Tibet

However, BBC India correspondent Sanjeev Srivastava says the joint declaration is in reality as much diplomatic fudging as genuine progress in areas of differences.

The Tibet and Sikkim agreements are the first details to emerge of a declaration signed by India and China aimed at solving their long-running border disputes, which erupted into war in 1962.

The world's two most populous nations have appointed envoys "to explore from the political perspective of the overall bilateral relationship the framework of a boundary settlement", according to a joint declaration released after the talks.

Mr Vajpayee added: "The appointment of special envoys is a special step that reflects the desire of both countries to settle the border issue as early as possible."

The joint declaration adds that India will not allow "anti-China political activities" by Tibetan exiles, who have fled to India in their tens of thousands.

Autonomy hope

The Indian Foreign Minister, Yashwant Sinha, has said this will not affect the status of the Dalai Lama, who leads a Tibetan government-in-exile based in the Indian town of Dharamsala.

Atal Behari Vajpayee (l) and Jiang Zemin
Mr Vajpayee met former Chinese President, Jiang Zemin

The agreement has surprised observers, as border disputes have bedevilled relations between China and India.

Fifteen rounds of talks since the 1980s have failed to resolve India and China's boundary disagreements.

Even in this declaration, our India correspondent says, the Indian leadership is keen to differentiate between the Tibet autonomous region and the whole of Tibet.

The Tibet autonomous region, west of the Yangtze river and south of the Kunlun mountains is the only area recognised by modern-day China as "Tibet".

It is about one third of the size of the old Tibet that existed before China invaded in 1950 and started incorporating areas into surrounding Chinese provinces.

The BBC's Sanjeev Srivastava
"There's a new spirit in Indo-China relations"

In pictures: Vajpayee in China
25 Jun 03  |  Photo Gallery
India and China's 'quiet pragmatism'
24 Jun 03  |  South Asia
Press upbeat over Vajpayee's China visit
23 Jun 03  |  Asia-Pacific
China and India's mutual distrust
21 Apr 03  |  South Asia
Tibetans struggle with Chinese changes
06 Dec 02  |  Asia-Pacific
China and the Kashmir crisis
02 Jun 02  |  South Asia

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