Chinese President Hu Jintao has told Vietnam's parliament that his country's rapid economic rise presents no threat to other nations in the region.
President Hu gave a televised speech to the National Assembly
Mr Hu said China's development would be peaceful and co-operative.
Mr Hu is only the third foreign leader to have addressed Vietnam's parliament, following Swedish and Laotian visitors.
Since the normalisation of relations between the two communist countries 14 years ago, China has become Vietnam's largest trading partner.
Bilateral trade exceeded $7bn last year, and President Hu hopes to increase the figure to $10bn by 2010.
Mr Hu was speaking on the second day of a three-day visit to Vietnam.
On Monday he was given a high-profile welcome at the presidential palace in Hanoi, before holding talks with Nong Duc Manh, the head of Vietnam's Communist Party.
Nong Duc Manh said developing relations with his country's northern neighbour was a "top priority".
From war to trade
Analysts say Mr Hu's visit is part of China's long-standing strategy to befriend its immediate neighbours to ensure they do not seek closer US involvement in the region.
In fact relations between China and Vietnam have been steadily progressing since 1991, when they formally ended the enmity that saw them fight a brief border war in 1979.
President Hu has been given a warm reception
"China's development poses an obstacle to no one and undermines no one," Mr Hu told Vietnam's parliament on Tuesday.
"[China's development] will only be conducive to world peace, stability and prosperity," he was quoted as saying by Chinese official news agency Xinhua.
Mr Hu said that both Vietnam and China had agreed that friendly co-operation was in their mutual interest.
On Monday he offered a five-point proposal to develop trade and political relations, as well as completing the full demarcation of a land border between the two nations and enhancing marine co-operation.
Some progress has already been made on the latter issue. Last week China and Vietnam agreed to start joint military patrols of the Gulf of Tonkin, which has been the subject of a border dispute for years.
Mr Hu is in Vietnam after a three-day visit to North Korea, where he reportedly won a pledge from North Korean leader Kim Jong-il that the country would take part in the next scheduled round of six-nation talks on its nuclear programme, due to take place in November.