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China cancels Iraq debt
China drops "large margin" of debt as Iraqi president begins visit to Beijing.
Last Modified: 22 Jun 2007 05:46 GMT

Talabani is the first Iraqi president to visit China since the two countries established ties [Reuters]

China has agreed to cancel a "large margin" of Iraq's debt, a move which Iraqi officials hope will lead to one of the first investment deals in rebuilding the war-torn country.
 
The agreement comes at the start of a week-long visit by Jalal Talabani, the first by an Iraqi president to China since the two  established diplomatic ties in 1958.
The visit is aimed at boosting economic ties, particularly in developing Iraq's oil fields.
 
On Friday Talabani is due to hold talks with Wen Jiabao, the Chinese premier, to discuss details of economic cooperation between the two countries

Commenting on Talabani's visit Qin Gang, the Chinese foreign ministry spokesman, said China was ready and willing to participate in the reconstruction of Iraq.

 

"We hope Iraq can realise security, stability and development at an early date and the Iraqi people can enjoy stable life as early as possible," he said.

 

Qin did not give any details of the debt agreement, other than to say China hoped to cancel a "large margin" of the funds owed by Iraq.

 

Iraq owes China about $8 billion, according to Iraq's finance minister, part of the roughly US$60 billion in foreign debt accumulated during the Saddam Hussein era.

 

Stronger ties

 

On Thursday the Iraqi president held talks with his Chinese counterpart Hu Jintao, although official reports on their talks did not mention any discussion of the rising violence in Iraq.

 

Talabani is accompanied on his visit by a large delegation of senior ministers - a sign, he said, of Iraq's desire to boost ties with Beijing.

 

"In Iraq, we look on the achievements of China as an achievement for people seeking freedom and independence throughout the world," he was quoted as saying during the meeting.

 

Al Jazeera's Beijing correspondent Melissa Chen says one of the major areas of interest for China is access to Iraqi oil.

 

China already imports 58 per cent of its oil from the Middle East, and is keen to secure oil exploration deals in Iraq to ensure a steady supply of oil for its energy-hungry industries.

 

Last October state-owned PetroChina began moves to renegotiate a deal secured in 1997 with the Saddam Hussein government to develop Iraq's al-Ahdab oil field.

Source:
Al Jazeera and agencies
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