The good-neighborly and trusty partnership of China and Mongolia has entered a new stage of all-facet development, Chinese President Hu Jintao said in Shanghai Friday.

"The reason behind the sound development of China-Mongolia relationship is that both sides put bilateral ties on an important position in their foreign relations," Hu said in his meeting with Mongolian President Nambaryn Enkhbayar, who on Thursday attended the 2006 summit of Shanghai Cooperation Organization (SCO), in which Mongolia holds observer status.

China and Mongolia respect the other's independence, sovereignty and territorial integrity, respect the other's road of development, properly handle the other's concerns, and exert joint efforts in reciprocal cooperation and common development, Hu said.

"China and Mongolia are good friends, partners and neighbors alike," Hu said. "Cooperation and development should be a major theme in bilateral relations in a period to come," the Chinese president said.

He proposed that the two countries enhance mutual understanding and trust, increase exchanges between parliaments, political parties and governments, and strengthen economic and trade cooperation, especially in resources exploration and infrastructure construction.

China is making preparations for setting up a cultural center in Mongolia and is ready to expand the exchanges among the young people of the two countries. And the two countries can cooperate better in tourism, sandstorm control and space technology, Hu said.

He also said that China and Mongolia should step up coordination and cooperation in international and regional affairs so as to bolster regional and global peace and development.

Enkhbayar noted that trade volume of Mongolia and China has been increasing in the past years, and their cooperation in energy and education has been making new progress. In addition, they have close communication within the SCO.

Mongolia values Mongolia-China relations and is ready to make joint efforts with China to push forward their mutually beneficial cooperation in politics, economy and trade, investment, energy and tourism, Enkhbayar said.