Menon, who is here on a four-day visit as Prime Minister Manmohan Singh’s special envoy, said India and China would be finalising dates to resume talks to resolve differences over demarcation of borders and to conduct joint military exercises.

Talking to the Indian media here before leaving for home, Menon said the dates for the resumption of the next round of border talks between the two countries would be set through diplomatic channels.

The two sides so far held 13 rounds of talks to resolve the differences over demarcation of boundaries. The last round was held in New Delhi in 2009.

Menon, the designated representative of India for the border talks, met his Chinese counterpart Dai Bingguo yesterday and discussed bilateral issues.

Menon came here as Prime Minister's envoy with a wider mandate to discuss whole gamut of relations between the two countries.

Menon also said dates would be set for India-China military exercises which are due this year. Dates are being set for the joint military exercises.

Menon's visit coincided with China-Pakistan military exercises focusing on anti-terrorism drills.

Indian and Chinese armies have so far held two rounds of joint counter terrorism exercise to enhance military to military cooperation and improve confidence building.

Asked whether China understands India's concerns relating to Pakistan, Menon said the two countries have high-level understanding between the two leaderships.

"Yes, we understand each other better and better. This is not static. The situation keeps changing. We keep changing we are growing. This is an ongoing exercise," he said, adding "We understand their interest I think they understand our core interests as well”.