Beijing – China and Indonesia pledged to boost trade and cooperation in wide-ranging fields yesterday, as the two countries' largest oil companies agreed to form a partnership on the first day of Indonesian President Megawati Sukarnoputri's visit.

China was her first stop on an Asian tour that will also take her to North and South Korea, and to India.

In a meeting between Ms Megawati and Chinese President Jiang Zemin after her arrival yesterday, both leaders agreed to strengthen ties. "China and Indonesia are developing countries with important influence in the world," the Chinese leader was quoted by the China Central Television Station as saying. He said he hoped both countries would step up cooperation in regional and international affairs and make new contributions for a fair and reasonable international political order.

The Indonesian leader thanked China for helping her country during its economic development and said the two countries' friendship was "very, very long-standing". She agreed with the Chinese President's suggestions, noting that the two countries should increase cooperation in fields such as agriculture, education and tourism.

The two leaders then oversaw the signing of several deals, one of which was an agreement between the Indonesian state oil company Pertamina and China's largest oil company PetroChina to form a partnership. Details were not revealed.

China also pledged US$400 million (S$733 million) in low-interest loans to Indonesia.

The two countries also signed four other memorandums of understanding, including an agreement to establish Indonesian consulate generals in the Chinese cities of Guangzhou and Shanghai and Chinese consulates in Surabaya and Medan in Indonesia.

Both sides also signed a deal for China to provide a 50-million-yuan (S$11.1-million) grant to Indonesia for economic and technical cooperation and an agreement on cooperation in infrastructure projects in Indonesia.

The Chinese leader thanked his Indonesian counterpart for the efforts she has made in improving the situation for Indonesia's ethnic Chinese. The Chinese leader recalled that Ms Megawati's father Sukarno had close relations with China's former leaders.

Political and economic ties between Indonesia and China were close in the 50s and early 60s under President Sukarno, but relations cooled in 1967 after Jakarta, then under army general Suharto, accused Beijing of complicity in a failed communist coup two years earlier.