The US president, who minutes before said he has ordered the Pentagon to start nuclear weapons testing on a level with China and Russia, complimented a smiling Xi as a "very tough negotiator" as they shook hands.

"We'll have a great understanding," Trump said in Busan, South Korea, predicting a "fantastic relationship for a long period of time".

Xi acknowledged that both sides did not always see eye to eye, but should strive to be "partners and friends".

"China and the US can jointly shoulder our responsibility as major countries and work together to accomplish more great and concrete things for the good of our two countries and the whole world," said Xi.

Sitting opposite each other each leader was flanked by senior officials including Secretary of State Marco Rubio, Treasury chief Scott Bessent and Commerce Secretary Howard Lutnick.

Xi's team, which arrived from Beijing shortly before -- the US side was already in South Korea -- included Foreign Minister Wang Yi, Commerce Minister Wang Wentao and Vice Premier He Lifeng.

The US leader's latest missive on nuclear weapons testing broadened the stakes for his talks with Xi.

-- 'Even in five years' --

Minutes before meeting Xi, Trump wrote on Truth Social that "because of other countries testing programs, I have instructed the Department of War to start testing our Nuclear Weapons on an equal basis".

Trump added that in terms of nuclear weapons stockpiles, China was a "distant third" behind the United States and Russia "but will be even in 5 years".

The comments came a day after Russian President Vladimir Putin said Moscow had successfully tested a nuclear-capable, nuclear-powered underwater drone, in defiance of US warnings.

Trump did not provide details or respond to a question from a journalist about his surprising nuclear announcement before the crucial meeting with Xi.

The world's two top economies' trade tussle -- encompassing everything from rare earths to soybeans and port fees -- has rocked markets and gummed up supply chains for months.

Following productive preparatory talks by top officials, Trump said on Wednesday on his way to South Korea that "a lot of problems are going to be solved" in a "great meeting".

Trump indicated that the agreement would include lowering 20 percent tariffs on Chinese goods related to fentanyl, which has killed tens of thousands of Americans.

Of particular importance to Trump -- with an eye on US farmers -- is whether China will resume purchases of American soybeans.

Another major issue is export controls on rare earths announced by Beijing this month that prompted Trump to call the Xi summit into question.

Beijing holds a virtual monopoly on these materials, which are essential for sophisticated electronic components across a range of industries.

"The easiest wins could include removing port fees for ships or lifting some fentanyl-related tariffs, which fall fully under presidential authority. China, in turn, could agree to purchase more US commodities to show goodwill," Yue Su at The Economist Intelligence Unit told AFP.

- Crowning achievement -

The meeting is taking place on the sidelines of an Asia-Pacific Economic Cooperation (APEC) summit of 21 countries in Gyeongju including the leaders of Japan, Australia and Canada.

It is the final stop on an Asia tour that saw Trump showered with praise and gifts, including a replica of an ancient Korean golden crown.

In Japan, new Prime Minister Sanae Takaichi said she would nominate Trump for the Nobel Peace Prize and gave him a putter and a gold-plated golf ball.

However, Trump's hopes of a re-run of his 2019 meeting with North Korean leader Kim Jong Un at the Demilitarized Zone frontier appear to have dashed.

Trump said though that they would meet in the "not too distant future" and that he would like to "straighten out" tensions between North and South Korea.

On Thursday, he hailed the military alliance with South Korea as "stronger than ever" and said he had given the green-light for Seoul to build a nuclear powered submarine.

One surprise in the talks could be if Xi brings up Taiwan, with speculation that Beijing might press Trump to water down US backing for the self-ruled island.

Since 1979, Washington has recognised Beijing over Taipei as the sole legitimate Chinese power, even though the United States remains Taiwan's most powerful ally and its main arms supplier.

burs-stu/hmn