China and Malaysia agreed yesterday to conduct a feasibility study on an Economic Partnership Agreement (EPA) to strengthen economic cooperation.

The plan was included in a joint communiqué released after talks between Premier Wen Jiabao and Malaysian Prime Minister Abdullah Ahmad Badawi.

The communiqué highlighted bilateral economic ties while pledging efforts toward cooperation in the fields of energy, health care, food security, education, culture and national defense.

The two countries "will continue to expand bilateral trade and mutual investment, vigorously push forward trade and investment liberalization and facilitation, and strive to increase bilateral trade to US$50 billion a year by 2010," the communiqué said.

It described the feasibility study on the EPA as "an effort to promote the long-term development of China-Malaysia trade and economic cooperation."

Malaysia is China's eighth largest trade partner, with bilateral trade reaching US$26.26 billion last year.

Meanwhile, trade between China and the Association of Southeast Asian Nations (ASEAN), of which Malaysia is a member, stood at US$117.24 billion in the first 11 months this year.

The EPA plan is believed to be part of the efforts to set up a free trade area (FTA) between China and the ASEAN. China and the Southeast Asian bloc have agreed to form an FTA by 2010 but no institutional framework has been announced to date.

As a sign of stronger mutual trust, the communiqué said "Malaysia welcomes China's participation in security cooperation in the Malacca Strait," through which 80 percent of China's oil imports pass.

Malaysia agrees to discuss with China the form of security cooperation such as intelligence exchanges and sharing; and welcomes the contribution of China, as a main user of the Malacca Strait, to security in the strait, according to the communiqué.

During their talks held in Putra Jaya, Malaysia's administrative center located some 30 kilometers west of Kuala Lumpur, Wen and Badawi pledged to deepen strategic and cooperative relations.

"China is willing to closely cooperate with Malaysia in promoting East Asia cooperation," Wen said.

Badawi said the continuous deepening of bilateral relations between Malaysia and China has brought about mutual benefits.

(China Daily December 16, 2005)