During the talks, Hu, who arrived here earlier in the day for a two-day state visit to Mongolia, gave a positive assessment of the fruitful cooperation between the two countries in various areas in recent years.

China's new leadership will take further measures to develop friendly cooperation with Mongolia, Hu said.

Hu made a four-point proposal aimed at promoting the China-Mongolian relations to a new high in the new century.

First, China proposes that, on the basis of the existing friendly relations between the two countries, the China-Mongolia partnership of good-neighborliness and mutual trust be established. The two countries will forever be good neighbors, good friends and good partners.

Secondly, the frequent exchange of top-level visits between the two countries should be continued in the interest of further expanding bilateral relations, Hu said.

Thirdly, efforts should be made to promote mutually beneficial trade and economic links between the two countries and seek wider areas of cooperation.

And fourthly, the two sides should strengthen their cooperation in international and regional affairs in joint efforts to maintain peace and stability in the region.

Bagabandy said that recent years have witnessed the rapid development of bilateral ties on the basis of mutual respect and mutual trust and that it is Mongolia's long-term state policy to steadfastly develop friendly and mutually beneficial cooperation with China.

Mongolia fully approves of the Chinese side's proposal for establishing the partnership of good-neighborliness and mutual trust and other related measures, reiterates that it firmly adheres to its one-China policy, Bagabandy said.

The two heads of state also had an in-depth exchange of views on ways to further expand and deepen bilateral trade and economic cooperation. Both sides agreed to conduct cooperation in finance, infrastructure and the fight against sandstorms.

Bagabandy said Mongolia attaches importance to its trade and economic cooperation with China and expresses its thanks to China for providing preferential loans to Mongolia as a way of encouraging large cooperation projects. Mongolia also welcomes China's inclusion of Mongolia in the list of destination countries for Chinese tourists, he added.

The two leaders also briefed each other about the economic and social development in their respective countries and exchanged views on the situation in the region, the regional cooperation in Asia and other issues.

After their talks, Hu and Bagabandy attended the signing ceremony for cooperation documents, including an agreement on economic and technological cooperation between the two countries. They told reporters later that both are satisfied with the results produced at their talks and that strengthening China-Mongolia friendship and cooperation is in keeping with the fundamental interests of both sides.

The two presidents also pledged joint efforts to establish and develop the China-Mongolia partnership of good-neighborliness and mutual trust.

On Wednesday evening, Bagabandy and his wife gave a state banquet in honor of the Chinese president and his wife.

(Xinhua News Agency June 5, 2003)