New Delhi, Aug 9 - In a damage control mode after its recent bid to block development aid for India at the Asian Development Bank, China has stressed the need to build 'strategic trust' to handle 'frictions' better and said the two countries have 'no other option than living in peace and developing side by side'.

India and China have decided to take a slew of measures to further their ties that include setting up a hotline between the prime ministers, robust people-to-people and cultural contacts, high-level visits and expanding coordination on global issues like protectionism.

'China and India should endeavour to build strategic mutual trust. Both need to expand the common interests and cooperation bilaterally and on regional and global affairs,' a statement by the Chinese foreign affairs ministry said Saturday night at the end of the 13th round of boundary talks.

India's National Security Adviser M.K. Narayanan and China's State Councillor Dai Bingguo, also the vice foreign minister, held two-day talks here to devise a framework for a final settlement of the border dispute. The talks also covered other bilateral, regional and international issues.

The desire to keep bilateral relations on an even keel was mutual.

The two sides decided to accelerate the process of setting up a hotline between their prime ministers, a proposal mooted when Indian Prime Minister Manmohan Singh met Chinese President Hu Jintao on the sidelines of a multilateral summit in the Russian city of Yekaterinburg in June.

In a deviation from the normally terse statement issued at the end of each round of boundary talks, both the Indian and Chinese foreign ministries came out with detailed separate statements emphasising the importance of consolidating their strategic partnership.