UK Foreign Secretary David Miliband Wednesday signed a memorandum of understanding (MOU) on urban-rural coordinated development cooperation with the Chongqing municipal government.

The UK will help raise the living standard of people in Chongqing's rural area's and narrow the urban-rural income gap by working together on higher education, business, climate change and other issues.

"I think the MOU means that partnership will be taken to a new level to include the public sector," Miliband said. The two sides have seen a wide range of private sector partnership since the UK opened a consulate in Chongqing eight years ago.

The MOU pays special attention to fighting climate change because it aims to help Chongqing realize sustainable development.

"Balanced growth will not have the meaning without full respect for the eco-system on which we depend," he said. "I hope we work together to help Chongqing avoid some of the mistakes that have marked our development in the 20th century."

The MOU is a great boost for Chongqing officials trying to make the municipality an economic driving force in west China.

"We want to develop Chongqing into a 'new municipality' with balanced growth between urban and rural areas," Chongqing Vice-Mayor Tong Xiaoping said. "The memorandum will help us reach our objectives."

The urban-rural gap prompted the State Council to approve Chongqing, together with Chengdu, as China's first pilot area for reforms on balanced development last June.

Chongqing's urban area accounts for just 7 percent of its total but is responsible for about 50 per cent of its economic output. About 64 percent of its 31.07 million people, however, are still registered farmers.

That's also why Miliband chose Chongqing as a stop during his six-day visit to China, UK consul-general in Chongqing Nick Whittingham said.

"Coming to Chongqing is an excellent way of understanding the challenges facing China in trying to narrow the gap between urban and rural areas," Whittingham said. He said the foreign secretary had already seen the developed side of China before flying to Chongqing from Shanghai on Tuesday.

"I think the MOU is the first step in trying to find areas we can work on," Whittingham said. "For example, London is an international financial center and has a lot of expertise in pension and social welfare management. All these issues are relevant to China and its under-urbanized areas."

Chongqing has taken some key measures to balance urban and rural development since becoming a pilot area for the reform.

The municipal government chose two counties and one district as experimental regions late last year. It has signed an agreement with Hong Kong-based real estate developer China Overseas to help send Chongqing's abundant migrant workers abroad.

Miliband's visit, however, marks the municipality's first attempt to extend such cooperation at the inter-state level, local analysts said.

"The selection of Chongqing as a pilot area will usher in massive urbanization in the city, whereas Britain has a lot of experience in the field as a leading industrial country," said Tian Daigui, a professor in the Development Research Center of Chongqing municipal government.

"Miliband's visit can offer Chongqing a pivot to learn from British experience in its attempt to manage the process," Tian said. London can be used as a medium to help Chongqing develop its connections with other European Union countries.