China has expressed support for the Nepalese government's fight against rebels and its drive to achieve peace in the central Himalayan kingdom. President Jiang Zemin delivered the message when he met Nepal's King Gyanendra on Wednesday afternoon.

This is Gyanendra's second visit abroad since he was crowned last summer following the assassination of his elder brother, King Birendra.

Two weeks ago, he visited India, where New Delhi offered counter-insurgency training to Nepalese army officers in fighting the domestic rebellion.

On Wednesday, he received fresh support from Beijing.

President Jiang said China opposes terrorism in any form.

In return, the Nepalese monarch promised he will not allow his country to be used for staging anti-Chinese activities.

The two leaders also discussed trade and business ties and pledged to increase cooperation between the neighboring nations.

They witnessed the signing of agreements on economic cooperation and border trade.

China is now the fifth largest investor in Nepal after India, the United States, Britain and Norway.

In May of last year, Premier Zhu Rongji visited Katmandu and announced a grant assistance package worth 9 million US dollars.

In a sign of booming economic cooperation, China has opened two more trade points on its border with Nepal, bringing the total to five.

For its part, Nepal's business community and travel industry early this week offered ready access to the Chinese currency, the Renminbi.

During his week-long stay in China, King Gyanendra will also visit Dalian, Shanghai and Yichang, where he will receive a guided tour of the Three Gorges Dam project.