Beijing, May 4 - China and the US today appeared to have found a way out of a messy diplomatic row, with Beijing agreeing to let a blind Chinese dissident at the centre of the crisis to leave the country and Washington assuring all assistance to give him asylum.

The Chinese government, which earlier demanded an apology from the US for allowing human rights activist Chen Guangcheng to take shelter in its embassy gave in today and said that he could apply to obtain necessary travel documents to go abroad.

Foreign Ministry spokesman Liu Weimin said in a press release that Chen may apply to study abroad according to China's laws.

Answering a host of questions, Liu later told a media briefing that Chen could get a passport.

His "criminal record" of the past may not come in the way as he has already served sentence in a previous case, he said.

The blind activist, who is convalescing in a hospital here appealed to US leaders yesterday for political asylum for him and his family.

Appreciating China's softening of stand on Chen, whose week-long stay in the US embassy virtually overshadowed the two-day high level US-China strategic and economic dialogue here, US Secretary of State Hillary Clinton said Washington would provide all necessary assistance.

Talking to the media after the conclusion of the two-day dialogue, Clinton told the media here that Chen has confirmed to the US Ambassador to China Garry Locke today, that he wants to go the US along with his wife and two children to pursue studies there.

"In that regard we are also encouraged by the official statement issued by the Chinese government confirming that he can apply to travel abroad to pursue his studies," she said.

"Over the course of the day progress has been made to help him about the future that he wants. We will be staying in touch with him as this process move forward," Clinton said.

At the same time, she said the US would continue to engage with the Chinese government over human rights issues.

"Let me also add that it is not about the well known activist. It is about human rights and aspiration of more than billion people here in China and billion more around the world and future of this great nation and all nations," she said.

"We will continue to engage with the Chinese government at the highest levels putting these concerns at the heart of our diplomacy. I think we have been very clear and committed to honouring both his choices and our values," she said.

State-run CCTV which began telecasting her press conference live abruptly disconnected it.

In a separate statement, State Department spokesperson, Victoria Nuland said "the Chinese Government stated today that Mr Chen Guangcheng has the same right to travel abroad as any other citizen of China".

Chen has been offered a fellowship from an American university, where he can be accompanied by his wife and two children.

"The Chinese Government has indicated that it will accept Chen's applications for appropriate travel documents. The United States Government expects that the Chinese Government will expeditiously process his applications for these documents and make accommodations for his current medical condition.

"The United States Government would then give visa requests for him and his immediate family priority attention.

This matter has been handled in the spirit of a cooperative US-China partnership," she said.

China had earlier declined to release well known human rights activist Liu Xiaobo even after he was awarded Nobel Prize last year.

Though activists like Liu and Chen are famous abroad, they are hardly known here as their activities are blacked out by the official media and they become less important once they move out of the country.

The two-day strategic and economic dialogue which was rocked by Chen's affair, however, ended on a positive note.

The dialogue focusing on bilateral, global, trade and economic issues yielded positive results, Chinese President Hu Jintao said in his meeting with Clinton and US Treasury Secretary Timothy Geithner here today.

Hu said he appreciated the "excellent work" of the teams from the two sides and the relationship is stronger than it has ever been.

During the meeting with Hu, Clinton said the US-China relationship is stronger than it has ever been.

"There is a lot of work ahead of us, but we find more and more opportunities for cooperation," Chinese state run Xinhua news agency quoted Clinton as saying.

Hu inaugurated the two day dialogue yesterday calling on the two countries to work a "new type of relationship" to break the traditional belief that big powers only have conflicts.

"To build a new type of relationship between China and the United States, we need to trust each other," Hu said.

While meeting Clinton and Geithner, Premier Wen Jiabao called for long term plan of cooperation.

Both sides should map out a long-term plan for bilateral cooperation, focusing on the economic, trade, finance and investment sectors, he said.

A joint statement issued at the end of the talks said the dialogue served as a unique platform for the two countries to promote understanding, expand consensus, manage differences, improve mutual trust, and increase cooperation.

The two sides reviewed the progress of the past three years of bilateral ties.

The United States and China recognise that the breadth and depth of their nations' interests and cooperation prove that they have a stake in each other's success, it said.

"The two sides decided to strengthen bilateral relations, including through increased cooperation and coordination on a range of pressing global and regional issues, to build a new model of bilateral relations in the 21st century," it said. PTI