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Page last updated at 12:21 GMT, Friday, 19 June 2009 13:21 UK

China rebukes ADB over India fund

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China has rebuked the Asian Development Bank (ADB) for funding a project in the disputed Indian state of Arunachal Pradesh, which is claimed by Beijing.

The Chinese government said the bank had "tarnished" its name with the move.

A bank spokesperson told the AFP news agency that it was not taking sides in the territorial dispute.

The north-eastern state of Arunachal Pradesh is at the centre of a long-standing border dispute, which Beijing claims as its own territory.

The $60m (£36.5m) loan is for a flood-management programme in Arunachal Pradesh and is part of a three-year lending programme for India from the ADB worth a total $2.9bn. (£1.7bn)

"China has expressed strong discontent. The action can neither change the fact that China and India have a huge territorial controversy, nor China's fundamental position on the border issues between China and India," a foreign ministry spokesman told a news conference on Thursday.

The ADB said that the organisation's charter stated that only economic considerations - and not political affairs - should be relevant to its decisions, the AFP news agency reported.

Ties between China and India - who fought a brief border war in 1962 - have improved lately, with both sides saying that they are eager to expand trade.



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