China and Uruguay on Wednesday upgraded their bilateral ties, setting the stage for further trade and investment, as the tiny neighbour of Argentina and Brazil seeks to strike deals abroad that it deems would be more beneficial than membership of a local trade bloc.

At a meeting in Beijing's Great Hall of the People, President Xi Jinping told his Uruguayan counterpart Louis Lacalle Pou that "China is ready to work with Uruguay to take establishing a comprehensive strategic partnership as a new starting point... and enrich cooperation," according to state media.

The announcement elevates Uruguay's ties with China to an equal footing with Brazil and Argentina, two other members of the Mercosur trade bloc.

Xi said he was committed to making China-Uruguay relations "a model of solidarity and cooperation", broadcaster CCTV reported.

For his part, Lacalle Pou said he wanted to deepen the "multidimensional relationship" even further, observing that his country had strengthened its diplomatic presence in China recently.

He said Uruguay was taking steps to join the New Development Bank, an institution founded by the Brics emerging economies headquartered in Shanghai.

He also invited Xi to Uruguay next year. (Reuters/AFP)