Two days after signing a historic agreement with one leading Chinese city, the group has signed a further agreement in another of China's biggest cities.

Earlier this week, the a bond was secured between Sunderland and Harbin. Yesterday, Sunderland City Council Chief Executive Dave Smith signed a Memorandum of Understanding between the city and Nanjing's Ministry of Science and Technology.

Nanjing's Deputy Mayor, Professor Wang Yonghong, witnessed the signing of the agreement on behalf of her city, which has more than six million residents and is situated in southern China.

The Memorandum of Understanding builds on a long-standing relationship between One NorthEast and the Ministry of Science and Technology of Jiangsu's provincial capital, Nanjing. It commits both parties to exchange experience and generate business co-operation.

Prof Wang welcomed the delegation to the city, which was established 2,500 years ago and was the ancestral capital of six Chinese dynasties.

In reply, Mr Smith said he was confident that Sunderland and Nanjing could build a close working relationship for the mutual benefit of both cities.

"Too many cities respond to economic challenges by closing their doors and not responding properly to those challenges. Sunderland and Nanjing are making sure those doors remain open. Co-operation can only help us build our economic performance," he said.

Mr Smith praised the work of One Northeast in setting up the arrangement and thanked the development agency for its foresight in establishing a network of business contacts it has set up in China for the benefit of North East businesses.

The Memorandum of Understanding was then signed by Huang Min, Director General of the Science and Technology Bureau and Mr Smith.

One main area of opportunity that has been identified by both Sunderland and Nanjing is the software industry.

Professor Zheng Jiaqiang gave a presentation on how the software industry in Nanjing has developed, and Bernie Callaghan, Chief Executive of Sunderland Software City, responded by describing the recent acceleration in growth of the software industry on Wearside.

He added: "A workforce must be of a very high calibre to service the demands of software companies and our aim, working with schools, colleges and universities, is to ensure the North East can service that demand. Education is central to everything that we do."

Mick Thurlbeck, Chairman of the Sunderland Committee of the North East Chamber of Commerce, agreed that Sunderland Software City would play a big role in the economic development of the city and praised the role of the University of Sunderland in helping set up the pioneering initiative."

"Sunderland Software City has the full backing of the Sunderland business community which believes it could make a big difference to the city's economy," said Mr Thurlbeck.