Indian Prime Minister Manmohan Singh has begun a three-day official visit to China aimed at improving the strained relations between the two countries.
Mr Singh is paying his first visit to China since he came to power
He told the Chinese state news agency on arrival that ties between the states had acquired global significance.
Mr Singh will hold talks with President Hu Jintao, Prime Minister Wen Jiabao and China's top legislator, Wu Bangguo.
Their discussions are expected to focus on territorial disputes and increasing bilateral trade, worth $37bn (£18.9bn).
In December, the powerful states held a landmark joint military exercise.
The war games in the south-western Chinese province of Yunnan, the first of their kind between the two largest armies in the world, involved just over 100 soldiers from each side.
Military ties between the countries have been tense since a brief but bloody border war in 1962.
After arriving in Beijing on Sunday, Mr Singh began his visit by touring several venues featuring in this year's Olympic Games.
Whilst viewing an exhibition hall for the event, he said the capital's preparations had been a "source of inspiration for India" and that some of the venues were "breathtaking".
The Indian prime minister also had warm words to say about relations between his country and China.
"I am going with an open mind to hold free and frank discussions on all issues of common interests with a view to shaping a relationship that befits our two countries and our future generations," he told the Xinhua news agency.
"India-China relations have today transcended their bilateral dimension and have acquired global and strategic significance."
Mr Singh's visit, the first by an Indian premier in nearly five years, comes at a time when trade between India and China is booming and the upcoming talks are expected to focus on surpassing the $40bn target they agreed to reach by 2010.
The Himalayan pass of Nathu La re-opened after 44 years in 2006
"It's going to be a major business event... bilateral trade has registered impressive growth," Indian Foreign Secretary Shiv Shankar Menon told reporters before the delegation left Delhi.
"We would like to sell much more to China and hence we set up the joint study group, because in the last few years, trade shifted in China's favour and we are hoping to change that," he added.
India's trade deficit with China has risen from around $4bn to $9.6bn since 2006, according to the Indian ministry of trade, and could exceed $12bn by the end of the financial year.
Correspondents say there is strong competition as well as co-operation between the two booming economies, because they are vying for the same markets and natural resources.
The talks in Beijing are also expected to touch on the unresolved territorial disputes which lay behind the 1962 conflict, but have been the subject of special negotiations since 2003.
The powerful neighbours held a joint military exercise last year
Ahead of his visit to China, Mr Singh said he would discuss "issues relating to the boundary", which are believed to include concerns that Chinese troops have made numerous incursions across the border into India over recent months.
India's relations with China have also been complicated by Beijing's strategic alliance with Pakistan, which it has supplied with arms and missile technology.
China, meanwhile, has expressed concern about India's involvement in the so-called axis of democracy that includes Japan, Australia and the United States.
The BBC's Daniel Griffiths in Beijing says both Mr Singh and the Chinese leaders he meets will emphasise the positive aspects of their relationship in the coming days.
But it is going to be a long time before the two Asian giants really trust each other, our correspondent says.