China pursues a policy of friendship and partnership with neighbors. Basing its Asia policy on peace, security, and prosperity, China works hard to promote long-term stable good-neighborly relations and mutual trust, and makes continuous progress in bilateral, multilateral and regional cooperation. The year 2005 witnessed a breakthrough in the joint development of the South China Sea by China, the Philippines and Vietnam; further strengthening of China's relations with South Asian countries; China being accepted as the observer in the South Asian Association for Regional Cooperation (SAARC); and signing of the agreement on the guiding political principles for settling boundary disputes and establishment of strategic cooperative partnership aimed at peace and prosperity between China and India. China has actively participated regional cooperation with neighboring countries. The building of the ASEAN-China Free Trade Area has entered the essential phase and the process of tariff cutting has been initiated in an all-round way.

In 2005, Chinese government leaders visited most neighboring countries. In April, Chinese President Hu Jintao paid a state visit to Brunei, Indonesia and the Philippines, and participated in the Asia-Africa Summit in Jakarta, Indonesia and in the Bandung Conference 50th anniversary activities; Chinese Premier Wen Jiabao visited Pakistan, Bangladesh, Sri Lanka and India. Between October and November, President Hu Jintao visited Democratic People's Republic of Korea (DPRK), Vietnam and Republic of Korea (ROK). In December, Premier Wen Jiabao paid an official visit to Malaysia and attended the ASEAN-China (10+1) Summit, the ASEAN-China, Japan and ROK (10+3) Summit, and the first East Asia Summit. At the meetings, Premier Wen expounded China's peaceful development approach and noted that China's development would never be an obstacle or threat to any other countries.

China also makes active efforts in moving forward the Six Party Talks on the DPRK nuclear issue. In September 2005, a joint statement issued during the fourth round of talks brought significant progress in solving the DPRK nuclear issue.