India and China on Friday confounded the dire predictions being made of renewed rivalry and distrust by reaffirming their intention to work closely together on a wide range of issues and to not let differences over the border become an impediment to future cooperation.

In his opening remarks at delegation-level talks with Prime Minister Manmohan Singh on the sidelines of the 15th Asean summit here, Chinese Premier Wen Jiabao said strengthened bilateral relations served the interests of the two countries, the region and world. He later recalled Dr. Singh’s oft-quoted remark about there being enough space for both India and China to develop, adding that there was “still more space in the world” for the two countries to grow together. If the “Asian Century” is to become a reality, he added, it was important for India and China to live in harmony and friendship and enjoy prosperity, a senior Indian official who was present in the meeting told reporters later.

Dr. Singh warmed to this theme, reiterating India’s willingness to cooperate with China on global issues like climate change, world trade and the financial crisis. Providing an account of the talks, N. Ravi, Secretary (East) in the Ministry of External Affairs, said the Prime Minister described economic and trade relations between the two sides as “a vital pillar” of the relationship despite the payments imbalance, a point Premier Wen responded to by promising to work with India to handle the growing trade deficit. He also said China encouraged its companies to invest in India and welcomed Indian investments in China. The two leaders then agreed to take steps to ensure bilateral trade reached the $ 60 billion annual target by 2010.

According to Mr. Ravi, Dr. Singh said both sides needed to build better understanding and trust at the political level so that bilateral relations remained strong despite existing differences. He spoke of growing exchanges in the defence field and proposed that India and China observe the 60th anniversary of the establishment of diplomatic relations “in a fitting manner.” Among the options proposed was a cultural festival.

Premier Wen responded to the suggestion by saying both sides should seize the opportunities provided by the 60th anniversary “to heighten our bilateral relationship.”

On December 30, 1949, Jawaharlal Nehru sent a telegram to Zhou Enlai, who was China’s Foreign Minister at the time, informing him of India’s decision to recognise the People’s Republic of China. Following talks in Beijing, formal diplomatic relations were established on April 1, 1950.