Chinese premier Wen Jiabao and Bhutanese prime minister Jigmi Y. Thinley have expressed willingness to establish formal diplomatic ties between their countries.
The two leaders met in Rio de Janeiro on the sidelines of the UN Conference on Sustainable Development (Rio+20), the China Daily reported on Friday.
Wen said China highly appreciates Bhutan's staunch support of China's position on issues concerning Taiwan and Tibet.
Wen said China also values the traditional friendship between the two nations, and respects Bhutan's choice for its development path according to its own national conditions.
Noting that China pursues a foreign policy of "good-neighbourliness", Wen said China is ready to forge formal diplomatic relations with Bhutan on the basis of the "five principles of peaceful coexistence".
He said China was willing to complete border demarcation with Bhutan at an early date, and strengthen exchanges in various fields so as to push bilateral ties to a higher level.
Thinley said the Bhutanese people highly appreciate China's endeavour to safeguard the common interests of developing countries in international and regional affairs.
He said Bhutan firmly sticks to a one-China policy and has strong desire to strengthen understanding of as well as friendship with China.