The tension continues to build between India and China.

After the war of words on Tuesday over Arunachal Pradesh, the new point of conflict is China's business plans in Pakistan-occupied Kashmir (PoK).

Chinese President Hu Jintao has assured Pakistan that China will continue to engage in projects inside PoK.

Not ok, says India.  "Pakistan has been in illegal occupation of parts of the Indian state of Jammu & Kashmir since 1947. The Chinese side is fully aware of India's position and our concerns about Chinese activities in Pakistan occupied Kashmir," said External Affairs Ministry spokesman Vishnu Prakash.  India has asked China to stop business in PoK in view of "long-term relations."

On Monday, the Chinese president met with the Pakistani Prime Minister and said ""Howsoever, the international situation may change, the people of China and Pakistan are always joined in hearts and hands." The Chinese President outlined a major project to upgrade the Karakoram highway connecting the two countries overland and offered Chinese help in the Neelam-Jhelum hydroelectric project in PoK.

The new warning from India comes a day after China said it's furious with Prime Minister Manmohan Singh's visit to Arunachal Pradesh 11 days ago. India dismissed the protest by clarifying that Arunachal Pradesh is a part of India, and politicians are free to visit it whenever they want. India said it was "concerned and disappointed" by China's remarks about the prime minister's visit.  External Affairs Minister SM Krishna also reiterated that despite Chinese protests, the Dalai Lama will visit Arunachal soon, but will refrain from making any political comments there.