President Jiang and his wife Madame Wang Yeping joined the Queen, the Duke of Edinburgh, the Prince of Wales and the Prime Minister, Tony Blair, at the state banquet at Buckingham Palace at the end of his first full day in London.

His visit is the first to the UK by a Chinese head of state.

President Jiang has been sampling the pomp and ceremony of royal life

In her speech, the Queen said that "we take great satisfaction in the much closer relationship between our two countries ..." and referred to the "successful return of Hong Kong to Chinese sovereignty" in 1997.

The Queen said: "The handover of the former colony and its smooth transition to the status of a Special Administrative Region of China exemplifies the trust and co-operation on which that relationship is based.

"We believe firmly in the virtues of dialogue. In the years ahead we shall continue to work together for world peace, prosperity and the protection of the environment."

The banquet was also attended by the Princess Royal, the Duke of York and Earl and Countess of Wessex, as well as the Archbishop of Canterbury, Dr George Carey, and Foreign Secretary Robin Cook.

Protests outside palace

Human rights protesters gathered outside Buckingham Palace during the event, continuing the demonstrations that have been staged since President Jiang arrived in London on Monday night.

In her speech, the Queen noted the British had long admired Chinese civilisation, particularly its art, architecture and literature.

Society was also becoming increasingly interested in China's ancient wisdom in philosophy and medicine, she said.

The Queen continued: "It is a matter of particular pride to me that Britain today is a very diverse and multi-cultural society which includes many people of Chinese origin or descent.

"They are a vibrant part of British life and of our economy."

Queen continued by remarking on the British love of Chinese food.

'Strong traditions'

She said: "Many years ago we copied your porcelain and called it China.

"We adopted your passion for tea. And more recently, the local Chinese restaurant has become a familiar feature of life throughout this land."

The Queen told guests that she was born in the same year as the President - 1926 - the year of the Tiger.

She said: "We have lived through almost three-quarters of this turbulent century.

"During our lifetimes our two countries have trodden very different paths ... Britain and China have both been shaped by their long, rich pasts and strong traditions which have, in different ways, contributed so much to world civilisation."

President Jiang expressed his "heartfelt thanks" to the Queen for her "kind invitation and warm hospitality" and wished to convey "best wishes" to the British people.

He said: "I am confident that this [state visit] will open up a new chapter of further growth of China-UK relations.

"If we keep on working hard for another 50 years, we will turn China into a strong, prosperous and modernised socialist country with a high degree of democracy and civilisation."