Having great potential for economic and trade cooperation, China and Pakistan should work together to push forward the cooperation of mutual benefit, said visiting Chinese Premier Wen Jiabao Wednesday in Islamabad.

Addressing Pakistan's business circle, Wen put forward three-point proposal on expanding trade and investment to enrich the content of the strategic and cooperative partnership between the two countries.

The proposal includes sticking to the principle of equality and reciprocity; enhancing exchanges between the business circles; and exploring new areas for cooperation.

The economic and trade relations between China and Pakistan have developed smoothly in recent years. The trade volume between the two countries hit 3 billion US dollars in 2004, increased by 26 percent to the year of 2003, and tripled that of the year of 2000.

Wen said China and Pakistan are good neighbors, and have enjoyed long-term friendship. Two thousand years ago, the silk road for trade exchanges has linked the peoples of the two countries. The all-weathered and comprehensive relations have deepened since the two countries forged diplomatic ties 54 years ago, he said.

It is significant to sign a treaty for friendship, cooperation and good-neighborly relations Tuesday evening, said Wen, saying the treaty confirms Sino-Pakistan friendly relations in the legal framework, and helps upgrade the bilateral ties in the long run.

On the same day, China and Pakistan declared to start the process of negotiation of building up a free trade area(FTA), and signed an agreement on early-harvest plan, the first step towards FTA.

Wen called upon the Pakistani and Chinese entrepreneurs to strengthen cooperation and make common progress, pledging the two governments will create condition for the business circle to build up a mechanism of exchanges.

More than 500 officials and entrepreneurs attended the gathering.