The two sides could be holding the second joint military exercises, details of which are to be worked out.

"It is a very good development. We want to see more cooperation between the two armies. It can help build confidence, build trust," said Chinese Ambassador to India Zhang Yan.

He was speaking ahead of the three-day visit of Prime Minister Manmohan Singh to Beijing from Sunday, during which the two sides will discuss the vexed border issue.

The armies of India and China held week-long joint counter-terrorism exercises in Kunming in southwest China from December 19, which were hailed by both sides as successful.

The first-ever exercises between the militaries of the two countries were significant considering the history of the bilateral relations.

Zhang noted that during the exercises in Kunming, both sides got opportunity to demonstrate their skills, ways of training and special tactics.

"It will lead to two military sectors to work out the next plan," the envoy said, adding that the two sides had agreed to have another round of exercises but expressed ignorance about the nature, scale or place.

57-year-old Zhang, who was China's arms control chief before taking over as the Ambassador last month, said the joint military exercises between the two countries, would help push the bilateral strategic partnership.

These endeavours will help promote "non-traditional security cooperation in particular, and that in combating the 'three forces' -- terrorism, separatism and extremism and to press ahead with China-India strategic partnership of cooperation," he said.

Pointing out that India and China are the major countries of the region and each other's "important neighbours", Zhang said, "We hope such kind of exchanges will be maintained and increased."

He said the two countries needed to join hands in "making active contributions to the tranquility in the border areas and peace, security and stability in the region."

Talking about the unresolved boundary question, the Chinese envoy said an early settlement "should be seen as a strategic objective" as it was in the "basic interest" of both the countries.

Referring to the 2005 Agreement on Political Parameters and Guiding Principles for settlement of the border issue, Zhang said, "I am happy to see that both sides agreed that a fair, reasonable and mutually-acceptable solution should be brought through friendly consultations on an equal footing."

Pending a final resolution, he said, both sides should make joint efforts to ensure peace and tranquility of the border areas, according to the relevant agreements, he said.