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BEIJING (Reuters) - Chinese President Hu Jintao told his Afghan counterpart Hamid Karzai on Friday that China will provide "sincere and selfless help" to Afghanistan, promising to step up trade, aid, investment and security cooperation.
"At present Afghanistan has entered into a critical transition period. China is a trustworthy neighbor and friend of Afghanistan," Hu told Karzai in central Beijing's cavernous Great Hall of the People.
"Both now and in the future China will continue to stay firmly committed to our policy of developing friendly relations with Afghanistan and will continue to provide sincere and selfless help to the Afghanistan side."
Hu congratulated Karzai on Afghanistan becoming an observer member of the Beijing and Moscow-anchored Shanghai Cooperation Organization (SCO), which held its summit this week. He called Karzai an old friend of China, according to a pool report.
"In the past 10 years, very fortunately, our relations have grown in a very positive way. Relations have broadened and deepened," Karzai said in return.
The two signed a strategic partnership agreement, under which China said it would encourage Chinese investment, help build infrastructure, grant scholarships to Afghan students and provide 150 million yuan ($23.57 million) in aid this year.
"Both sides agreed to step up bilateral exchanges and cooperation in the field of security, jointly fight terrorism ... and increase intelligence exchanges," said the agreement, carried by the official Xinhua news agency.
China has been nervous about links between what it says are militants operating in its restive far western region of Xinjiang and central Asia, including Afghanistan.
The future of Afghanistan, struggling to end an insurgency by Taliban militants despite the presence of U.S.-led international forces for more than a decade, was a key issue at the summit. Hu told Chinese state media this week that the bloc wanted to play a bigger role in Afghanistan.
A senior Russian official, however, ruled out any military involvement by member countries, despite fears instability will spread through the region as most foreign combat troops leave Afghanistan by the end of 2014.
The SCO, founded in 2001, includes China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Iran, India, Pakistan and others attend the summits, but not as full members. All have an interest in Afghanistan's future. As an observer, Afghanistan can attend SCO meetings but not vote.
But Beijing will remain cautious, edging rather than rushing towards any bigger presence on concern about security troubles without the lure of major energy resources, Chinese experts say.
U.S. officials and legislators have said China could play a bigger reconstruction role through aid and investment.
Afghanistan's neighbors, including Iran and Pakistan, as well as nearby India and Russia, have jostled for influence in the country. The competition could well heat up after 2014.
India has poured aid into Afghanistan and has also invested in minerals. But China's trade with Afghanistan is small.
Two-way trade totaled $234.4 million in 2011, a rise of 31 percent on the previous year. Chinese imports were worth just $4.4 million, according to Chinese customs data. ($1 = 6.3635 Chinese yuan)
Editing by Ron Popeski