"China has not halted defence exchanges with India and has received no word that India has stopped military exchanges between the two countries," said a statement by China's defence ministry.

The faxed statement was a response to an AFP request for comment on Indian press reports that New Delhi had cancelled defence exchanges and sent an "angry" letter to Beijing.

The reports said New Delhi's angry reaction came after China refused a visa for an Indian general responsible for the disputed region of Kashmir.

An atmosphere of suspicion surrounds relations between the two giants amid border disputes over Kashmir and the northeastern Indian state of Arunachal Pradesh.

The two also fought a short war in 1962, while the presence in India of Tibet's exiled spiritual leader, the Dalai Lama, adds to the tension.

The Indian foreign ministry has said the general's planned visit in August had not taken place and called on China to show more "sensitivity." It gave no details about any response by New Delhi.

However, a highly placed Indian military source told AFP on condition of anonymity that no defence exchanges have been cancelled and the matter was being resolved.

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