China, India sign border pact during Indian PM visit

China and India concluded a border defense cooperation pact, making it a highlight of Indian Prime Minister Manmohan Singh\'s visit to the Asian neighbor. Singh, who arrived in China Tuesday on a three-day trip after visiting Russia, met with China\'s top leadership including his counterpart Li Keqiang and Chinese President Xi Jinping, to discuss various issues between the sides including border cooperation and trade. The two nuclear powers fought a brief border war in 1962, and while their relations have improved since the half century-old incident, their thorny border issue along the Himalayas are yet to be resolved. There have also been recent border incidents along the so-called Line of Actual Control that have made resolution of the border more pressing. In this background, the Border Defense Cooperation Agreement signed Wednesday in the presence of Singh and Li could be starter as it would help set up a hotline between the military headquarters of the two countries and tighter ground rules for their armed forces along the border. Chinese Foreign Ministry spokeswoman Hua Chunying said the agreement is of great significance for peace and stability along their borders, and reflected the will and resolution of both sides for a friendly and cooperative relationship. The Indian Express newspaper said the pact also puts no restrictions on India developing border infrastructure or enhancing military capabilities along the border. It quoted India\'s Ambassador to China S. Jai Shanker as saying: \"This principle allows both countries to take appropriate measures according to their own security needs.\" Singh\'s visit has received extensive coverage in the official Chinese media and Chinese leaders, who hold the Indian leader in high esteem, stressed the importance of closer relations between the two countries. At a news conference, Li, accompanied by Singh, said: \"China and India are the world\'s two largest developing countries and the two most dynamic emerging markets\" and their relationship \"is one of the most important bilateral relationships in the 21st century, and also the most promising.\" Li said China would like to work with India to \"benefit the 2.5 billion people in China and India, and to make greater contribution to peace, development and cooperation in the world,\" Xinhua News Agency reported. Chinese President Xi, after his meeting with Singh, described the Indian prime minister as an old friend of the Chinese people and credited him with starting India\'s economic reform in the 1990s. \"China-India relations have gone far beyond bilateral scope and have global and strategic significance,\" Chinese President Xi Jinping said during his meeting with Singh. \"When India and China shake hands, the world notices,\" the Indian prime minister responded. The two sides also signed a memorandum of understanding to strengthen cooperation on trans-border rivers and on sharing hydrological data. India has said China\'s building of dams on the River Brahmaputra could seriously affect its vital source of water from the river. As for bilateral trade, another issue between the two countries, China agreed to consider a proposal for an industrial park in India as a way to tackle India\'s growing trade deficit. Two-way trade totaled nearly $66.5 billion last year but India\'s deficit jumped to $28 billion and the deficit this year is expected to be even more. Increasing China\'s direct investment in India such as the industrial park is seen as one way of tackling the widening trade gap.