Chinese President Hu Jintao and his Afghan counterpart, Hamid Karzai, agreed on Friday to upgrade bilateral relations to the level of a strategic and cooperative partnership.

Chinese President Hu Jintao shakes hands with Afghan President Hamid Karzai in the Great Hall of the People in downtown Beijing.

They reached the agreement during formal talks in the Great Hall of the People in downtown Beijing.

Hu congratulated Afghanistan on its success in becoming an observer of the Shanghai Cooperation Organization (SCO).

Calling Karzai an old friend of the Chinese people, Hu voiced appreciation for his long-term commitment to bilateral friendly cooperation and his contribution to the development of bilateral ties.

As a reliable neighbor to Afghanistan, China will unswervingly stick to friendly policies and continue to provide sincere and selfless help to the country, promised its president.

The advancement of bilateral relations marks a new step for the development of bilateral ties, said Hu, adding that it not only meets the fundamental interests of the two countries but also benefits world and regional peace, stability and development.

Hu made a five-point proposal on the development of bilateral relations.

He called on the two sides to deepen political mutual trust and maintain close high-level contacts, so as to enhance strategic communication on major issues.

He suggested that the two sides expand cooperation in areas including the economy and trade, contracted projects, resource and energy development, agriculture and infrastructure.

"The Chinese government will continue to encourage capable Chinese companies to invest in Afghanistan," he said.

On people-to-people exchanges, Hu added China is willing to strengthen education, culture, media and personnel training cooperation with Afghanistan.

He urged the two sides to enhance security cooperation and jointly combat the "three forces" of terrorism, separatism and extremism as well as trans-boundary crimes, including drug trafficking.

According to Hu, the two sides should expand multilateral coordination and cooperation within the framework of the SCO and the South Asian Association for Regional Cooperation.

"China will continue actively participating in international and regional cooperation concerning Afghanistan," said the president, adding that China respects Afghan people's independent choice of national development path.

Noting that Afghanistan is entering a pivotal period of transition, he said China will continue to support and participate in the nation's peaceful reconstruction.

China is ready to work with the international society to promote peace, stability and development in Afghanistan as well as in the region, he added.

Karzai thanked the Chinese president for his warm hospitality as well as his steadfast support for Afghanistan's becoming an SCO observer.

"Without your support, we can not do this," he said.

The Afghan president said bilateral relations have developed positively in the past decade, and are continuing to deepen, attributing that progress to China's good-neighborly and friendly policies.

He also voiced appreciation for China's understanding, support and assistance to Afghanistan's reconciliation and reconstruction process, and expressed his pleasure at the establishment of a bilateral strategic and cooperative partnership.

Afghanistan is willing to develop long-term friendly cooperation with China, said Karzai, adding that he agreed with Hu's proposal on developing bilateral relations.

He said Afghanistan hopes to enhance political, economic and trade, and energy cooperation with China, and welcomes Chinese companies expanding investment in Afghanistan.

Briefing Hu on the situation there, Karzai said Afghanistan attaches great importance to China's role in its reconstruction process.

He expressed hope that Afghanistan will realize peace, security, stability and development at an early date under the help of the international community, including China.

After their talks, the two sides issued the Joint Declaration between China and Afghanistan on Establishing Strategic and Cooperative Partnership.

Karzai is in Beijing for a visit to China. He attended the SCO Beijing Summit held on Wednesday and Thursday. At the event, Afghanistan became an observer of the SCO.