Chinese President Hu Jintao said Friday in Budapest that China and Hungary have agreed to put economic ties and trade as the priority areas in their bilateral relations.

Hu told a group of Hungary businessmen at a special meeting proposed by Hu himself that China will work together with the Hungary side to strike a balanced development of two-way trade.

President Hu meets Hungarian Prime Minister

"We are not seeking a long-term trade deficit in favor of China, but hope to gradually narrow the gap through development of bilateral economic ties and trade," Hu said.

The Chinese president promised to encourage Chinese firms to import more from Hungary, and proposed Hungary companies explore better ways in tapping Chinese market.

Two-way trade between China and Hungary reached 2.6 billion US dollars last year, up 66 percent from the previous year. Hungary has been China's largest trading partner among central and eastern European countries for three consecutive years.

Although China is the 5th largest trading partner of Hungary, China-Hungary trade volume was less than 0.3 percent of China's total foreign trade volume of 851.2 billion US dollars.

"That figure cannot match with the level of friendship and the high economic growth rate of our two countries," Hu said. "We should find out better ways and work more vigorously to promote our economic ties and trade as President Madl Frenc and I have agreed to put economic ties and trade as a priority in our bilateral relations."

The Chinese president made a three-point proposal on boosting economic ties and trade between the two countries. They are increasing direct contacts between businessmen of the two sides, starting cooperation in hi-tech and increasing mutual investment.

President Hu meets president of National Assembly of Hungary

Hu's proposal was welcomed by Hungary businessmen.

Miklos Devecz, manager of the Flextronics company responsible for strategic development and government relations, said the proposals were "excellent" and that his company "appreciates, supports" the proposal and will work to make the proposals a success.

The Flextronics company, a Singapore-based electronic products manufacturer and service provider, has about 44 percent of its business in China, the same level as in Hungary.

Hu arrived in Budapest Thursday morning, the first state visit by a Chinese head of state in 10 years. It is also the first visit to Hungary by a Chinese leader after Hungary became a member of the European Union in May.

China and Hungary signed six cooperation documents Thursday to strengthen their economic ties and to boost bilateral trade.

The China Hainan Airlines and the Hungary airlines signed an agreement that will open direct flights between Beijing and Budapest three times a week from August 2 this year.

"China welcomes Hungary firms to participate in China's development of its western areas and the rejuvenation of the old industrial belts," Hu told Madl Thursday. "Hungary companies are also welcome in the construction of projects for the Beijing 2008 Olympiad and the World Expo' 2010 in Shanghai."

Hungary is the second leg of Hu's four-nation tour following Poland. He will also visit Romania and Uzbekistan before attending a summit meeting of the Shanghai Cooperation Organization, slated to begin in Tashkent on June 17.