Chinese President Hu Jintao and his Afghan counterpart Hamid Karzai, agreed on Friday to upgrade bilateral relations to the level of a strategic and cooperative partnership, state-run Xinhua News Agency reported. During their talks in Beijing, Hu promised Karzai that as a reliable neighbor to Afghanistan, China will unswervingly stick to friendly policies and continue to provide sincere and selfless help to the country. Hu made a five-point proposal on the development of bilateral relations, suggesting that the two sides expand cooperation in areas including the economy and trade, contracted projects, resource and energy development, agriculture and infrastructure. \"The Chinese government will continue to encourage capable Chinese companies to invest in Afghanistan,\" he said. The Chinese president also urged the two sides to enhance security cooperation and jointly combat the \"three forces\" of terrorism, separatism and extremism as well as trans-boundary crimes, including drug trafficking. Karzai thanked the Chinese president for his steadfast support for Afghanistan\'s becoming an observer of the Shanghai Cooperation Organization (SCO). The Afghan president agreed with Hu\'s proposal on developing bilateral relations, saying that Afghanistan hopes to enhance political, economic and trade, and energy cooperation with China, and welcomes Chinese companies expanding investment in Afghanistan. Karzai also expressed hope that Afghanistan will realize peace, security, stability and development at an early date under the help of the international community, including China. Meanwhile, China announced that it will provide a CNY 150 million (USD 24 million) grant to the Afghan government this year. Karzai is in Beijing for a four-day visit since Tuesday. He attended the SCO Beijing Summit held on Wednesday and Thursday, in which Afghanistan became the observer. The SCO now has six full members -- China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. Mongolia, Iran, Pakistan, Afghanistan, and India are observer states, and its dialogue partners include Belarus, Sri Lanka and Turkey.