China angrily denounced on Thursday the approval by the Asian Development Bank of a 2.9-billion-dollar funding plan for India, saying the scheme encroached on a territorial dispute between the Asian giants.
"The Asian Development Bank, regardless of the major concerns of China, approved the India Country Partnership strategy which involves the territorial dispute between China and India," foreign ministry spokesman Qin Gang said, referring to a largely uninhabitable Himalayan region.
"China expresses its strong dissatisfaction over this... The bank's move not only seriously tarnishes its own name, but also undermines the interests of its members."
A bank spokeswoman confirmed to AFP that the plan had won "broad support" from the board of directors during a Monday meeting, but insisted it was not taking sides in the territorial dispute, only seeking to push forward its poverty alleviation efforts.
"ADB takes no position on territorial disputes between its members," ADB spokeswoman Ann Quon told AFP in an email.
"ADB will issue suitable guidelines for its staff on dealing with proposed activities in disputed areas."
According to India's Economic Times, the 2.9-billion-dollar package for India covers the whole country for the period from 2009 to 2012.
However, it says, China is particularly concerned about a 60-million-dollar watershed protection project in the Arunachal Pradesh region, where much of China and India's territorial dispute is centred.
India says China occupies 38,000 square kilometres (14,700 square miles) of its Himalayan territory, while Beijing claims the whole of the northeastern Indian state of Arunachal Pradesh, which is 90,000 square kilometres.
The two countries fought a brief but bloody border war in 1962, and are yet to resolve the border dispute.
"The Asian Development Bank as a regional development institution should not interfere in the political affairs of the members," China's spokesman Qin said.
"The Chinese government strongly urges the Asian Development Bank to take effective measures to eliminate the negative impact of this move."
The ADB's Quon said: "ADB's Charter mandates that ADB shall not interfere in the political affairs of any member and that only economic considerations shall be relevant to its decision."