India and China will hold a new round of negotiations on the vexed border issue which is an area of 'differences and divergences' despite bilateral relations having witnessed 'visible improvement', External Affairs Minister Pranab Mukherjee [Images] said on Tuesday.

"Of course there are areas of concern...not concern, but areas of differences and divergences with regard to the border dispute," Mukherjee told PTI when asked about the future of Sino-Indian relationship.

He said both countries have an established mechanism at the level of special representatives to deal with the border issue at the political level. "They have completed 12 rounds of talks. More rounds of talks are to take place," he added without specifying any exact timeframe for the talks.

The last round of talks were held in Beijing [Images] between National Security Advisor M K Narayanan and Chinese State Counselor Dai Bingguo in September.

Unable to find a negotiated settlement through the diplomatic channels, India and China appointed Special Representatives in June 2003 to address the border issue from a political perspective of the overall bilateral relations.

India says China is illegally occupying 43,180 sq kms of Jammu and Kashmir [Images] including 5,180 sq km illegally ceded to Beijing by Islamabad [Images] under the Sino-Pakistan boundary agreement in 1963. On the other hand, China accuses India of possessing some 90,000 sq km of Chinese territory, mostly in Arunachal Pradesh.

Mukherjee said India has reiterated the 'one China' policy on Taiwan and has also helped in the smooth passage of the (Beijing) Olympic torch peacefully.

The External Affairs Minister said both the countries have been in touch with each other after the Mumbai terror attacks [Images], adding that he had a telephonic conversation with the
Chinese Foreign Minister Yang Jiechi.

Reviewing high-level bilateral exchanges during the year, Mukherjee said Prime Minister Manmohan Singh [Images] had visited China twice in 2008-- once bilaterally and the second time to attend the ASEM summit.

United Progressive Alliance chairperson chairperson Sonia Gandhi [Images] also visited the communist country during the Olympics [Images]. "I myself visited China on a bilateral visit and my counterpart visited India," he said.