Chinese President Hu Jintao(R) shakes hands with his Chilean counterpart, Ricardo Lagos, in South Korea's southeast port city of Busan, Nov. 18, 2005.

Chinese President Hu Jintao met with his Chilean counterpart, Ricardo Lagos, on Friday in Busan and both attended the signing ceremony of a free trade agreement between their two countries.

The meeting took place on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting, which kicked off on Friday in South Korea's southeastern port city of Busan. Both China and Chile are members of the APEC forum.

Hu said the establishment of a free trade zone between China and Chile, the first between China and a Latin American country, will not only help deepen bilateral political, economic and trade ties, but also set a good example for South-South cooperation.

The two leaders agreed to direct the relevant government departments to implement the agreement as early as possible, so as to benefit peoples of both countries, said sources from the Chinese delegation.

The free trade agreement was signed by Chinese Commerce Minister Bo Xilai and Chilean Foreign Minister Ignacio Walker.

Under the agreement, the two countries will fully launch on July 1, 2006, the tariff reduction process of cargo goods trade.

The free trade negotiations were launched by the Chinese and Chilean presidents on Nov. 18, 2004, when Hu paid a state visit to the Latin American country.

It is the second free trade agreement that China has signed. The last one was with the Association of Southeast Asian Nations.

During the meeting with Lagos, Hu said that in recent years, the Sino-Chilean ties are facing a new phase of accelerated development with frequent exchanges of high-level visits and enhanced political mutual trust.

Chile's recognition of China's full market status has promoted the rapid increase of bilateral trade and the expansion of investment, Hu added. Chile is the first Latin American country to recognize China's full market status.

"The two countries are maintaining sound coordination and cooperation in regional and international affairs," said the Chinese president who arrived here on Thursday.

China and Chile, both important countries in their regions, enjoy great potentials and broad prospects in enhancing bilateral ties, Hu said.

This year marks the 35th anniversary of the establishment of full diplomatic ties between the two countries. Both sides should grasp the opportunity and enhance cooperation in political, economic and trade and cultural fields, so as to push forward their all-around cooperative partnership, he added.

For his part, Lagos said the Chinese president's visit to Chile last year has consolidated bilateral traditional friendship, expanded cooperation areas, and enhanced bilateral ties.

Agreeing that the two countries share identical views on many major international and regional issues, the two heads of state also pledged to strengthen cooperation in multilateral organizations.

Source: Xinhua