India described China as 'a key foreign policy priority' while Beijing backed 'a bigger role' for New Delhi in world affairs.

Ruling out any conflict, the Chinese foreign ministry said: 'China and India have no other option than living in peace and developing side by side.' Beijing stressed on greater coordination with New Delhi on major international issues like the global financial crisis, climate change, energy and food security.

China also struck an upbeat note about promoting the relationship with 'a higher and strategic perspective' and called for expanding people-to-people contacts and cultural interactions as the two sides get ready to celebrate the 60th anniversary of the establishment of diplomatic relations in 2010 by observing a year of friendship in their respective countries.

The re-assertion of friendship and strategic partnership comes against the backdrop of recent discordant notes in bilateral ties.

In March, China tried to block a development loan for India at the Manila-based Asian Development Bank on grounds that a part of it was meant for Arunachal Pradesh, which Beijing claims. China's attempt to block a waiver by the Nuclear Suppliers Group for New Delhi last year has not been forgotten in India.