(Updates with implication for talks, analyst quotes) By Sheikh Mushtaq SRINAGAR, India, Nov 21 (Reuters) - China has a stake in peace in South Asia, and Kashmir in particular, as part of the disputed region is under Beijing's control, Kashmir's main separatist alliance said. The mention of China's role in resolving the dispute and its control over a part of the Himalayan region -- the first by separatist leaders since a revolt against New Delhi broke out in 1989 -- could hurt chances of resuming peace talks with the government. India rules 45 percent of Kashmir and the bulk of its more than 11 million population. Pakistan has about 35 percent of the territory and China controls the rest. "It (China) has a direct link with Kashmir as certain parts of Kashmir, including Aksai Chin, are under its control," Mirwaiz Umar Farooq, chairman of the All Parties Hurriyat (Freedom) Conference, told thousands of Muslim worshippers late on Friday. "I believe that China is not a party to the Kashmir conflict but it has stakes as far as peace in the region is concerned." Farooq, also the chief priest of Kashmir, said he is planning to visit China soon. "Hurriyat welcomes the approach adopted by China and America jointly in terms of addressing the issue of Kashmir in South Asia," he said. He was referring to a joint statement issued by the United States and China after President Barack Obama met his Chinese counterpart Hu Jintao, which included a line of support for the improvement of India-Pakistan relations. New Delhi said in response it does not need any external help to improve ties with neighbour Pakistan. HURT PEACE TALKS? With violence down in Kashmir in recent years, India is pulling out troops from the region and has initiated secret talks with separatist groups to come up with a solution, which could also be greater autonomy. Experts said the latest Hurriyat comment will have an impact on the future of official peace talks, which broke down in 2006. Indian Prime Minister Manmohan Singh offered to resume talks last month during a visit to Kashmir. "This is something that was not desirable and Mirwaiz's suggestion that China could play a role along with Pakistan on the Kashmir issue will never go down well with the government," Uday Bhaskar, a New Delhi-based strategic affairs expert, said. "I am sure the Hurriyat's latest statement will irritate New Delhi further," said Noor Ahmed Baba, dean of the faculty of social science at the Kashmir University. A clear government reaction was not immediately available. "It is unfortunate for them (separatists) to say so. We are watching the situation closely," said one home ministry official, who was not authorised to speak to the media. India and Pakistan, who claim the whole region, have fought two of their three wars over Kashmir, where tens of thousands of people have died in two decades of violence. Ties between the two neighbours nosedived after last November's Mumbai attacks, in which 166 people were killed and New Delhi blamed Pakistan-based militants for the attacks. (Additional reporting by Bappa Majumdar in New Delhi; Editing by Sonya Hepinstall)
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