The nuclear neighbours already have close defence and economic cooperation and Musharraf's talks with President Hu Jintao were to build on the foundations.

"You are an old friend of the Chinese people, and for many years you have worked for the development of our friendship and cooperation," Hu told Musharraf.

"It is my great pleasure to exchange views with you about our bilateral relations and also about regional and international questions of shared interest."

They were to discuss issues such as Afghanistan, Kashmir and India -- all which border China's western-most region of Xinjiang.

Musharraf hailed the meeting an an "excellent interaction" and praised China's initiative in creating the Boao economic forum, which he addressed Sunday in southern Hainan province.

It is his first visit to Beijing since China's new leadership was installed in March and comes five months after India's Prime Minister Atal Behari Vajpayee was greeted by Hu -- the first time an Indian premier has been welcomed here in a decade.

Pakistan is a traditional ally of China and Pakistani Foreign Minister Khursheed Mahmud Kasuri Monday played down the significance of warming Sino-India ties.

"We don't worry at all. The best test of that is not what you say or I say but what the Chinese say," he said in an interview with the BBC.

India and Pakistan are in the middle of a delicate peace process after coming close to their fourth war last year.

"The Chinese say our relationship is one of a kind, so why should we be worried. China is a very close friend of Pakistan," said Kasuri.

Last month, their navies carried out joint exercises near Shanghai -- the first time Chinese and Pakistani navies have joined forces in an exercise based on a "non-traditional security" scenario.

This unprecedented move was tempered by Chinese reports Monday that China and India were slated to hold similar joint exercises in neutral waters in the Bay of Bengal off India's east coast later this month.

Pakistan has relied heavily on China for its defence equipment since 1990 when the United States stopped supplying it with military hardware amid claims it had acquired the capability to produce nuclear weapons.

During his three-day visit, Musharraf was expected to finalize a deal for Chinese assistance in the construction of a 300 megawatt nuclear power plant in Chashma, central Punjab province, Pakistani press reports said.

The United States has repeatedly urged China to halt nuclear cooperation with Pakistan, but both sides insist they are not working together for military purposes.

China agreed to go ahead with the 700 million dollar Chashma plant, next to an existing nuclear power plant also built with Chinese assistance, during a visit by Pakistan Prime Minister Zafrullah Jamali in March.

Both sides are working to seal financing and technical aspects of the deal.

Musharraf arrived in Beijing from Hainan following the Boao Forum for Asia, where he praised China's robust economic growth as "an inspiration for all developing countries and an assurance for a better future for Asia".

However, he lamented that security concerns in South and Central Asia were hindering economic integration.

Despite the close "strategic relationship," bilateral trade was only 1.8 billion dollars in 2002, according to Chinese trade statistics.

Officials said other deals to be signed in Beijing include an extradition treaty and special preferential tariff status for Pakistan.

Musharraf is scheduled to meet Premier Wen Jiabao and parliamentary chief Wu Bangguo Tuesday.