China's visiting President Hu Jintao will sign a free trade deal with Pakistan that will more than triple bilateral trade to US$15 billion (euro11.5 billion) in five years, a Pakistani diplomat said Thursday.

Hu, who arrived in Islamabad on the first visit to Pakistan by a Chinese leader in 10 years, will sign a raft of economic deals on Friday aimed at expanding a burgeoning bilateral trade that grew 39% last year to US$4.26 billion (euro3.3 billion).

Salman Bashir, Pakistan's envoy to China, said a free trade agreement will be the most important document signed during Hu's four-day visit.

"We are expecting to take volume of bilateral trade to US$15 billion (euro11.5 billion) within the next five years with the implementation of the FTA (free trade agreement)," Bashir told the state-run Associated Press of Pakistan.

The Chinese leader was given a rare red carpet reception at Islamabad's international airport by Pakistani President Gen. Pervez Musharraf, Prime Minister Shaukat Aziz and the entire Cabinet as well as the heads of each of the defense services.

Artillery blasted a 21-round salute, a brass band played China's national anthem, drum-beating musicians performed traditional songs and scores of schoolchildren waved miniature Chinese and Pakistani flags. Hu was later driven in a heavily guarded convoy for a banquet at Pakistan's presidency building.

"We feel proud to be friends of Pakistan and will further enhance our strategic relationship," Hu said during an address to the banquet, according to private-run Geo TV.

China already provides Pakistan nuclear and defense industry assistance and is its third-largest trading partner, after the United States and the European Union.

In New Delhi, Hu offered his assistance, if asked, to help resolve lingering disputes between Pakistan and its nuclear-armed archrival India, but added he would not choose sides between the neighbors, who have fought three wars since their 1947 independence, including two over the Himalayan Kashmir region.

"I look forward to having in-depth exchange of views with President Pervez Musharraf and other Pakistani leaders (on) bilateral relations as well as international and regional issues of mutual interest," state-run Pakistani TV quoted Hu as saying.

At the banquet, Musharraf vowed to resolve his country's differences with India, particularly over Kashmir, and called for stability in war-wracked Afghanistan.

"Success in this endeavor would usher in a new era of peace and prosperity in South Asia," the state-run agency quoted the Pakistani leader as saying.

In what is expected to be the first of several economic deals made during Hu's trip, Pakistan and Chinese officials agreed to establish a joint investment company, involving the China Development Bank, to undertake urban and rural infrastructure projects in Pakistan.

Dr. Salman Shah, finance adviser to Pakistan's prime minister, said China will provide "necessary financial support" in the industrial, services, agricultural, health care and education sectors.

A defense deal is also in the offing, Pakistan's army chief, Gen. Ihsahn ul-Haq, said Wednesday. Pakistan currently produces two tanks and a fighter jet using Chinese expertise and designs, and is considering building F-22 class frigates with China.

Pakistan is an impoverished country of 160 million people seeking increased foreign investment to help boost its infrastructure and industry demands, as well as expand much-needed energy sources.

Bashir, the ambassador, said China and Pakistan have established a framework to expand energy cooperation. They will investigate building an energy corridor providing Beijing access to oil and gas resources of Central and Western Asia and developing oil refining and storage facilities in Pakistani coastal areas.

China's official Xinhua news agency has reported that China would conclude an accord with Pakistan in November to sell Islamabad reactors for six nuclear power plants to be built during the next 10 years.

Pakistan has been seeking U.S. support to boost its nuclear energy program, calling for a deal along the lines of one between Washington and New Delhi. That deal allows U.S. civilian nuclear trade with India in exchange for Indian safeguards.

China has already provided funding and expertise to help build a 300-megawatt nuclear power station in 1999 at Chashma in the eastern province of Punjab. In April last year, the two countries began building a second nuclear power plant near the old one.

On Friday, Hu holds talks with Musharraf and Aziz before delivering a live televised address to the nation. On Saturday, he travels to the eastern city of Lahore for further talks with political and business leaders.