China and Mexico signed a memorandum of understanding Monday in Beijing and officially set up a permanent bi-national commission for closer bilateral relationship.

Chinese Foreign Minister Li Zhaoxing and Mexican Foreign Minister Luis Ernesto Derbez Bautista attended the founding ceremony and signed the memorandum of understanding.

Li said the friendly and cooperative relations between China and Mexico have been progressing continuously since the two countries forged full diplomatic ties in 1972.

Mexico has become China's second largest trade partner in Latin America and China has also become the major trade partner of Mexico in Asia, he acknowledged.

China and Mexico agreed to form a strategic partnership and to set up a permanent bi-national commission when Chinese Premier Wen Jiabao paid an official visit to Mexico in December 2003.

The establishment of the commission will surely push forward the development of the two countries' strategic partnership, Li noted.

Li also thanked the Mexican government and people for their valuable support to China on the Taiwan issue.

Derbez reiterated that Mexico adheres to the one-China policy and is in opposition to Taiwan's attempt of joining the United Nations.

Derbez said the establishment of commission is helpful for the Mexico and China to have political dialogues, to improve mutual respect and friendship through cooperation and exchanges in science, technology and culture, and to enhance strategic partnership through strengthening economic and trade cooperation.

The two sides also had an exchange of views on international issues including the United Nations reform, the nuclear issue on the Korean Peninsula and the Iraq issue.

The ceremony was followed by four sub-committee conferences covering receptively the spheres of politics, trade and economy, science and technology, education and culture. Senior officials from the two sides also formed four working groups to discuss issues of social development, communications, exchanges, agriculture and tourism.