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Chinese president visits Indonesia to boost ties

Ali Kotarumalos, Associated Press

Indonesian President Susilo Bambang Yudhoyono, right, talks to Chinese President Xi Jinping, left, before a meeting at Merdeka Palace in Jakarta, Indonesia,Wednesday, Oct 2, 2013. Xi is making his first visit to Southeast Asia since taking office, arriving Wednesday in Indonesia to boost ties and economic partnerships with the region's biggest country. (AP Photo/Achmad Ibrahim)

JAKARTA, Indonesia (AP) -- The leaders of China and Indonesia agreed Wednesday to improve cooperation in several areas, as Chinese President Xi Jinping began his first visit to Southeast Asia since taking office, striving to boost ties and economic partnerships with the region's biggest country.

Xi met with his Indonesian counterpart, Susilo Bambang Yudhoyono, and is expected to meet with business leaders and become the first foreign leader to address the country's Parliament during the two-day trip.

Besides trade and investment, the two countries agreed to improve cooperation in industry, infrastructure, transportation, energy and finance, as well as maritime and fisheries, Yudhoyono said after the meeting.

"We realize there is good potential in tourism, education and creative industry," he said, welcoming China's plan to open a consulate on Indonesia's resort island of Bali.

He said the two countries also plan to strengthen defense and security cooperation.

They also signed a currency swap agreement worth $16 billion for three years that could be utilized to support Indonesia's sliding rupiah in a crisis.

"The agreement reflects regional commitment in the face of global uncertainty and will contribute propitiously toward maintaining macroeconomics and domestic financial stability," said Indonesian Central Bank Governor Agus Martowardojo.

Xi said that a Chinese cultural center would be built in Jakarta, and that 1,000 Indonesian students would be offered scholarships to study in China.

He said the two countries would increase communication and work together for peace and stability in the region.

China has been trying to build deeper ties with the 10-member Association of Southeast Asian Nations.

Indonesia has been a broker during heated territorial spats over disputed islands in the South China Sea. China claims most of the entire sea on historical grounds, but Vietnam, the Philippines, Brunei, Malaysia and Taiwan all strongly disagree. A number of maritime incidents between China and its neighbors has increased tensions in recent years, raising concerns about potential violence.

Xi, who took office in March, is also expected to visit Malaysia and attend the Asia-Pacific Economic Cooperation summit next week in Bali.

China is Indonesia's second-largest trading partner. Two-way trade reached $66 billion last year, while Chinese direct investment rose to $2 billion.