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European Union and Chinese officials will formally sign a co-operation agreement tomorrow on Galileo, the Civil Global Navigation Satellite System developed by the EU.

The ceremony will take place during the EU-China Summit in Beijing tomorrow, said a press release issued by the EU executive European Commission (EC).

The EU had approved the agreement between China and the 15-nation bloc on Monday.

"This is a very important step ahead which shows the high level of confidence created by Galileo throughout the world. The partnership with China is good news and paves the way for other future bilateral and regional agreements which are of mutual benefit'' said Loyola de Palacio, EC vice-president in charge of transport and energy.

This agreement provides for co-operative activities on satellite navigation in a wide range of sectors, notably science and technology, industrial manufacturing, service and market development.

It also opens the way for China to invest around 200 million euros (about US$230 million) in the programme through taking holding in the Galileo Joint Undertaking, the body established to manage the programme.

Galileo, scheduled to be operational by 2008, is designed to encircle the globe with 30 satellites in medium Earth orbit, comprising 27 operational satellites and three reserves, plus two control centres on the ground.

In another development, President of the EC Romano Prodi said here on Monday (local time) that the EU and China should develop all-round co-operation because it is in the interests of both sides.

In an interview at the EC headquarters with Chinese journalists, Prodi said that the sixth summit meeting between the EU and Chinese leaders tomorrow will give impetus to further development of bilateral ties in general and co-operation in such key sectors as politics, economy, education, science and technology as well as cultural exchange in particular.

"It is a very important meeting because this is my first time to meet with China's new leadership,'' he said.

Prodi said that China is a key player in world issues and this was demonstrated in China's efforts made in the resolution of both the nuclear issue of the Democratic People's Republic of Korea and the Iraq issue.

The EU is also an important force and co-operation between the two parties is beneficial to both parties, he added.

He also expressed satisfaction with the development of bilateral economic relations, saying that bilateral trade, currently standing at the level of 115 billion euros (US$132 billion), is developing fast because China and the EU have complementary economies.

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