The dam, one of the eight hydel projects shortlisted for construction with a capacity of generating 7,000 MW of electricity, has triggered anxieties in India about growing Chinese activities in Pakistani Kashmir.

India and Pakistan have fought three wars over Jammu and Kashmir, which both countries claim.

Jammu and Kashmir is one of the issues the two neighbours are trying to resolve in their composite dialogue that got suspended by New Delhi in the aftermath of the Mumbai terror attack last year.

During his visit to Hang Zhou in Zhejiang province and Guangzhou Aug 21-24, Zardari sought Chinese participation in the development of hydel, thermal and solar energy projects, irrigation and fisheries and mobile telephone networks. Pakistani and Chinese companies have signed a slew of pacts in these areas.