Chinese President Jiang Zemin said Sunday in Beijing that China will offer US$400 million of preferential loans to Indonesia to promote bilateral cooperation and support Indonesia's economic development.

Jiang made the announcement during talks with Indonesian President Megawati Soekarnoputri, who arrived in Beijing Sunday afternoon on a five-day state visit. This is Megawati's first visit to China since becoming President.

Jiang made a four-point proposal on boosting China-Indonesia relations: maintaining top-level contacts and exchange; expanding trade and economic cooperation; expanding cooperation in culture, education and tourism sectors; and strengthening cooperation in the international arena.

Jiang said Indonesia, like China, was a nation with many minority groups. The unity among different ethnic groups was vital to the country's stability and development.

Jiang noted that Megawati herself and the Indonesian government have made efforts to improve the conditions of ethnic Chinese in Indonesia, and China was appreciative of those efforts.

"China sincerely hopes that all minority groups in Indonesia can live harmoniously, and ethnic Chinese can merge in local society and make new contributions to the economic prosperity and social progress of Indonesia," Jiang said.

Jiang, who met Megawati last year in Shanghai during APEC meetings, said Megawati's father, President Sukarno, established a close friendship with former Chinese leaders, and laid a solid foundation for China-Indonesia relations. The current visit by Megawati and a large delegation showed that Megawati herself paid great attention to developing bilateral relations with China.

China was satisfied with the good development momentum of bilateral relations, Jiang said, adding that it was a set policy of China to pursue long-term stable and friendly relations with Indonesia.

Megawati said she agreed with Jiang's four-point proposal. She said she admired the economic achievement of China over the years, adding that relations between Indonesia and China had great potential to grow.

The Indonesian president thanked China for its assistance and support, saying it showed China's sincere wish to develop bilateral relations.

She said her country's economy was evidently recovering, and she very much hoped to have understanding and support from China and other friendly nations.

Megawati said Indonesia was proud of the "Asia-Africa Spirit" that former Indonesian and Chinese leaders jointly created. Indonesia was ready to strengthen cooperation and coordination with China on international and regional issues, and make joint efforts for a new, better world order.

Following the talks, the two presidents presided over the signing of an agreement on Indonesia's establishment of consulates general in Guangzhou and Shanghai, and four other memorandums of understanding on economic and technological cooperation.

(Xinhua News Agency March 25, 2002)