India and China finally end their historic rivalry

Indian and Chinese leaders are to create a "strategic partnership for peace and prosperity" with accords aimed at ending a decades-long border dispute and boosting bilateral trade and economic co-operation.

Indian and Chinese leaders are to create a "strategic partnership for peace and prosperity" with accords aimed at ending a decades-long border dispute and boosting bilateral trade and economic co-operation.

A statement, signed by the Chinese Premier, Wen Jiabao, and his Indian counterpart, Manmohan Singh, said the agreement would promote diplomatic relations, economic ties and help them "jointly address global challenges and threats".

The two countries also signed a raft of agreements for co-operation in such diverse areas as civil aviation, finance, education, science and technology, tourism and cultural exchanges.

Mr Wen told reporters in Delhi at the start of his four-day visit: "We are working to promote friendly ties of co-operation between our two countries." Mr Singh said: "India and China can together reshape the world order."

India and China share a mountainous, 2,500-mile border, parts of which are not demarcated. The two sides went to war over the border in 1962.

An 11-point "road map" states that the countries would take into consideration historical factors, geographical features, people living in the area, security and whether the area was under Indian or Chinese control when marking the border.

Both sides had begun forging closer economic ties, hoping improved trade relations will also help expedite the resolution of political differences.

The two leaders have agreed to boost bilateral trade to $20bn (£11bn) by 2008. Last year, trade totalled $13.6bn, with India recording a trade surplus of $1.75bn.

China is keen to develop a free-trade area between the two countries. Their combined population is two billion, which would make it the largest free-trade area in the world. Mr Wen and Mr Singh agreed to set up a panel of experts to study the feasibility and benefits from a trade area.

On Sunday, Mr Wen visited the southern city of Bangalore, India's technology hub, and said the two nations should put aside their rivalry and instead pool their resources. He said India and China could lead the world in information technology, heralding a new "Asian century".

Mr Wen was expected to bring up the subject of Tibet. India allowed the Dalai Lama to set up a government in exile at Dharmsala in the northern Himalayas after he fled Chinese-ruled Tibet in 1959.