Both sides affirmed that they would abide by the following principles, promote a long-term constructive and cooperative partnership and, on this basis, build a qualitatively new relationship:

Both sides agreed to hold regular high-level exchanges between the two countries. This will greatly enhance mutual understanding and expand bilateral relations. With a view to deepening their coordination and dialogues on bilateral, regional and international issues, both sides agreed on the need for annual meetings between Foreign Ministers of the two countries. They also agreed that personnel exchanges and friendly contacts between ministries, parliaments and political parties of the two countries should be further enhanced.

The two sides welcomed the positive momentum of bilateral trade and economic cooperation in recent years and shared the belief that continued expansion and intensification of China-India economic cooperation is essential for strengthening bilateral relations.

Both sides shared the view that existing complementarities between their two economies provide an important foundation and offer broad prospects for further enhancing their economic relations. In order to promote trade and economic cooperation, both sides will take necessary measures consistent with their national laws and rules and international obligations to remove impediments to bilateral trade and investment. They reaffirmed the importance of the ministerial meeting of the Joint Economic Group (JEG) and agreed to hold the next (seventh) JEG meeting within the year.

The two sides will set up a compact Joint Study Group (JSG) composed of officials and economists to examine the potential complementarities between the two countries in expanded trade and economic cooperation. The JSG would also draw up a program for the development of China-India trade and economic cooperation for the next five years, aimed at encouraging greater cooperation between the business communities of both sides. The Group should present a study report and recommendations to the two Governments on measures for comprehensive trade and economic cooperation by the end of June 2004.

The two countries will launch a financial dialogue and cooperation mechanism to strengthen their dialogue and coordination in this sector.

The two sides agreed to enhance cooperation at the World Trade organization, which is not only to mutual benefit but also in the broader interest of developing countries. The two sides will hold dialogues on a regular basis in this regard.

Historical and cultural links between China and India will be strengthened, inter alia, through the promotion of exchanges in culture, education, science and technology, media, youth and people-to-people relations. They agreed to set up Cultural Centers in each other's capitals and facilitate their establishment.

Both sides will work towards the enhancement of direct air and shipping links, tourism, exchange hydrological data in flood season on common rivers as agreed, cooperation in agriculture, dairy, food processing, health and other sectors.

They agreed on the need to broaden and deepen defense exchanges between the two countries, which will help enhance and deepen the mutual understanding and trust between the two armed forces. They confirmed that the exchange of visits by their Defense Ministers and of military officials at various levels should be strengthened.

The two sides exchanged views on the China-India boundary question and expounded their respective positions. They reiterated their readiness to seek a fair, reasonable and mutually acceptable solution through consultations on an equal footing. The two sides agreed that pending an ultimate solution, they should work together to maintain peace and tranquility in the border areas, and reiterated their commitment to continue implementation of the agreements signed for this purpose, including the clarification of the line of actual control.

The two sides agreed to each appoint a special representative to explore, from the political perspective of the overall bilateral relationship, the framework of a boundary settlement.

The Indian side recognizes that the Tibet Autonomous Region is part of the territory of the People's Republic of China and reiterates that it does not allow Tibetans to engage in anti-China political activities in India. The Chinese side expresses its appreciation for the Indian position and reiterates that it is firmly opposed to any attempt and action aimed at splitting China and bringing about "independence of Tibet".

The Indian side recalled that India was among the first countries to recognize that there is one China and its one China policy remains unaltered. The Chinese side expressed its appreciation of the Indian position.

China and India recognized the primacy of maintaining international peace. This is a prerequisite for the socio-economic development of all developing countries, including China and India. The world is marked by diversity. Every country has the right to choose its own political system and path to development. As two major developing countries, China and India acknowledged the importance of their respective roles in the shaping of a new international political and economic order. The international community must help the developing countries to eliminate poverty and narrow the gap between the North and the South through dialogue and cooperation so as to achieve common prosperity.

The two sides acknowledged the vital importance of the role of the United Nations in world peace, stability and development. They are determined to continue their efforts in strengthening the UN system. They reaffirmed their readiness to work together to promote reform of the UN. In reform of the UN Security Council, priority should be given to enhancing representation of the developing countries.

Both sides stood for continued multilateral arms control and disarmament process, undiminished and equal security for all at progressively lower levels of armament and for multilateral negotiations aimed at nuclear disarmament and elimination of nuclear weapons. They are firmly opposed to introduction of weapons in outer space, use or threat of force against space-based objects and support cooperation in development of space technology for peaceful purposes.

The two sides recognized the threat posed by terrorism to them and to global peace and security. They resolutely condemned terrorism in any form. The struggle between the international community and global terrorism is a comprehensive and sustained one, with the ultimate objective of eradication of terrorism in all regions. This requires strengthening the global legal framework against terrorism. Both sides shall also promote cooperation on counter-terrorism through their bilateral dialogue mechanism.

China and India face special and similar challenges in their efforts to protect the environment while simultaneously forging ahead with rapid social and economic development of their countries. In this context, the two sides agreed to work together in a practical manner to cooperate on preserving the environment and ensuring sustained development and to coordinate positions on climate change, biodiversity and other issue in relevant multilateral fora.

The two sides supported multilateral cooperation in Asia, believing that such cooperation promotes mutually beneficial exchanges, economic growth as well as greater cohesion among Asian countries. The two sides viewed positively each other's participation in regional and sub-regional multilateral cooperation processes in Asia.

The two sides stated that the improvement and development of China-India relations is not targeted at any third country and does not affect either country's existing friendly relations and cooperation with other countries.

The two sides agreed that the official visit of the Prime Minister of India to the People's Republic of China has been a success, has contributed to enhancing mutual understanding and trust between the Governments, leaders and peoples of the two countries, and marks a new step forward in strengthening the all-round cooperation between China and India in the new century.

Prime Minister Vajpayee invited Premier Wen Jiabao to visit India at a mutually convenient time and conveyed to President Hu Jintao an invitation from President Abdul Kalam to visit India. The Chinese side accepted the invitations with appreciation. The dates of the visits will be settled through diplomatic channels.

On behalf of the Government and the people of India, H.E. Prime Minister Atal Bihari Vajapyee thanked the Government and the people of China for the warm welcome received by him and his delegation.

Signed in Beijing on 23 June 2003 in the Chinese, Hindi and English languages.

(Wen Jiabao) Premier of the State Council The People's Republic of China (Atal Bihari Vajpayee) Prime Minister The Republic of India

(Xinhua News Agency June 25, 2003)