Harare — China will provide Zimbabwe with a US$2,9 million grant to finance development projects after the two countries signed an economic and technical co-operation agreement.

The agreement was signed in China recently when Foreign Affairs Minister Simbarashe Mumbengegwi paid an official visit at the request of the Chinese Government last month.

Briefing journalists in Harare yesterday, Minister Mumbengegwi, said the two sides would help each other to identify projects that needed support.

"The two sides signed an agreement on economic and technical co-operation where China will provide a grant of RMB Yuan 20 million, which is equivalent to approximately US$2,9 million.

"The money will be used to finance projects jointly identified by the two sides in support of economic recovery," he said.

Minister Mumbengegwi said a bilateral agreement was also reached on the identification of new projects to be implemented under the new measures announced by Premier Wen Jiabao at the Fourth Ministerial conference of the Forum on China-Africa Co-operation held in Egypt last year.

Zimbabwe and China, Minister Mumbengegwi said, agreed on measures to enhance bilateral co-operation.

He said they agreed on the twinning of Yiwu City and Shanghai with Zimbabwean cities.

Minister Mumbengegwi said as part of maintaining cordial relations, China agreed to offer 100 square metres of exhibition space to Zimbabwe at the commodities market in Yiwu.

Yiwu City was declared jointly by the UN, World Bank and the international accounting firm, Morgan Stanley as the world's biggest Small Commodities for Daily Necessities Market.

Minister Mumbengegwi said the Zimbabwean delegation held high level meetings with Chinese Vice President Mr Xi Jinping and Foreign Affairs Minister Mr Yang Jiechi among other high-ranking officials.

He said he conveyed Zimbabwe's gratitude to China for using its veto power in the UN Security Council in July 2008 to block a malicious resolution by Western countries to impose mandatory sanctions against Zimbabwe under chapter VII of the UN Charter.

At a bilateral level, the two sides reaffirmed their unwavering support.

Minister Mumbengegwi said the two sides held fruitful discussions on climate change and reform of the United Nations, particularly the democratisation of the Security Council.

"We had fruitful and wide-ranging discussions with the Chinese leadership on bilateral and multilateral issues such as climate change, reform of the United Nations Security Council and the international financial crisis," he said.

Minister Mumbengegwi said Zimbabwe and China reaffirmed the need to maintain cordial relations that date back to Zimbabwe's liberation struggle.

He visited Shanghai, which is going to host the 2010 World Expo where Zimbabwe will participate.