The Chinese Government encourages Chinese companies to take part in Saudi Arabia's infrastructure construction to upgrade the two countries' cooperation on project contracting and labor services, he said.

During Hu's visit, China Railway Construction Corp. Ltd. signed a contract with Saudi Arabia on a light rail project in Mecca. The $1.77-billion light rail service is expected to help pilgrims move around more easily in the holy city.

Regional reach

In Riyadh, Hu also met with Abdul Rahman Al-Attiya, Secretary General of the Gulf Cooperation Council (GCC). Both leaders expressed their wish to create a free trade area between China and the GCC as soon as possible.

"The establishment of a China-GCC free trade area is in the fundamental and long-term interests of both sides and will help deepen their mutually beneficial cooperation and achieve common development," Hu said.

China will actively work toward signing the free trade agreement with the GCC at

an early date, Hu said, while calling on both sides to continue energy dialogue and jointly ensure the stability of global energy markets.

China and the GCC launched free trade agreement negotiations in July 2004, and the first round of talks took place in April 2005. The GCC, founded in 1981 and headquartered in Riyadh, is a trade bloc of six Arab states-Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

Hu said recent years have witnessed substantial development of China's relations with the GCC and its member countries, as evidenced by their increasing mutual political trust, rapidly growing trade and energy cooperation, and fruitful collaboration in the fields of investment and infrastructure construction.

China has always dealt with its relations with the GCC and its member countries from a strategic perspective, Hu said, adding that he hopes both sides work together closely to improve the group cooperation mechanism.

The GCC is China's eighth largest trading partner.

According to China's Ministry of Commerce, their bilateral trade volume amounted to $79.3 billion in the first 10 months of 2008.