Wu said that since the establishment of bilateral relations, remarkable progress had been achieved. Beneficial cooperation in all areas had been expanded. The two nations maintained good political relations.

"The key task for us in the future is to strengthen trade economic cooperation," she said.

The two nations had great potential in tourism cooperation. The signing of a tourism memorandum Tuesday would deepen mutual understanding and friendship and actively promote bilateral trade and economic relations.

She said that since the beginning of the reform and opening up policy, China had achieved great progress in attracting foreign capital and restructuring state-owned enterprises. Last year, China's economic growth reached eight percent, with its gross domestic product reaching 1,200 billion US dollars. China now encouraged capable entrepreneurs to go abroad and join in international competition.

Granic said that although the two nations were a great distance apart, their peoples had a traditional friendship. Croatia valued trade and economic relations with China. Both sides should further promote bilateral economic and trade development. More Chinese people would be able to understand Croatian culture after the signing of tourism memorandum.

Wu said the Chinese government insisted on settling the Iraqi issue within the United Nations framework, in order to protect the interests of Iraqi people and maintain stability in the Gulf region. Iraq should provide more assistance to the United Nations weapon inspectors. China would make greater efforts for the solution of the issue.

Granic agreed with Wu.

After the meeting, He Guangwei, director of the China National Tourism Administration and Pave Zupan Ruskovic, Minister of Tourism of Croatia signed a tourism memorandum.

(Xinhua News Agency February 19, 2003)