Peru and China on Tuesday signed an agreement on bilateral economic and technical cooperation, under which China would grant assistance worth 20 million yuan ($3.07 million) to the South American country.

The money will be used in Peru's education, culture and health sectors.

Chinese Ambassador to Peru Zhao Wuyi and Carlos Pando, executive director of the Peruvian Agency for International Cooperation, inked the deal.

"The signing of this agreement reaffirms the friendship and mutual understanding between both countries and shows China's firm support to Peru's social and economic development," Zhao said.

"Trade isn't the full content of bilateral cooperation. There are many potential areas for both sides to increase cooperation, including sectors such as anti-poverty fight and infrastructure construction," he said.

Pando also hailed the deal, which came as the two countries are celebrating the 40th anniversary of the establishment of their diplomatic relations this year. Peru and China forged diplomatic ties on Nov 2, 1971.

The continued strengthening of bilateral relations has created conditions for increased trade, investment and cooperation in different areas and activities, he said.

The agreement will boost projects of education and health infrastructure in the near future, he added.

Pando also said the China-Peru cooperation increased over the 2006-2010 period, during which Peru received aid worth 120 million yuan from China.