Pakistan and China have signed a five-year free trade agreement aimed at increasing business between the two allies.
The agreement was signed on Friday in Islamabad during a meeting between Chinese President Hu Jintao and his Pakistani counterpart, Pervez Musharraf.
Officials from both sides say the new pact could boost trade between China and Pakistan by several billion dollars a year.
During the talks, Mr. Hu also pledged new political and economic support for Pakistan, including continued help with nuclear energy development and a constructive role in improving relations between Pakistan and India.
The countries also are expanding their long-standing collaboration on military technology. Pakistan is expected to buy Chinese AWAC planes fitted with early warning systems.
On Saturday, Mr. Hu will head to the eastern city of Lahore to meet with business leaders.
This is the first visit by a Chinese president to Pakistan in more than 10 years.
The Chinese leader came to Islamabad from New Delhi where the two sides pledged to boost trade and work toward settling decades-old border disputes. Mr. Hu also said Beijing welcomes improving relations between nuclear rivals India and Pakistan.