BAGHDAD — China has agreed to cancel 80 percent of the 8.5-billion-dollar debt it is owed by Iraq, the finance ministry in Baghdad said in an official statement on Tuesday.

It said a bilateral agreement was signed in Beijing, without specifying the date, and that China’s ambassador to Iraq had met officials in Baghdad to confirm the agreement.

The statement added that the two countries entered into trade deals valued at 3.8 billion dollars in 2009.

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