The two countries had been locked in years of diplomatic spats after the retaliatory arrests of each others' citizens and a series of tit-for-tat trade disputes.

But Carney has sought to turn the page on the testy relations, in a bid to reduce reliance on the United States, its key economic partner, as President Donald Trump aggressively raised tariffs on Canadian products.

Addressing Xi in the Great Hall of the People, Carney said that "together we can build on the best of what this relationship has been in the past to create a new one adapted to new global realities".

Engagement and cooperation would be "the foundation of our new strategic partnership", he said.

"Agriculture, energy, finance, that's where we can make the most immediate progress."

Welcoming Carney, Xi said China-Canada relations reached a turning point at their last meeting on the sidelines of the APEC summit in October.

"It can be said that our meeting last year opened a new chapter in turning China-Canada relations toward improvement," Xi told the Canadian leader.

"The healthy and stable development of China-Canada relations serves the common interests of our two countries," he said, adding he was "glad" to see discussions over the last few months to restore cooperation.

- 'Right track' -

Ties between the two nations withered in 2018 over Canada's arrest of the daughter of Huawei's founder on a US warrant, and China's retaliatory detention of two Canadians on espionage charges.

The two countries imposed tariffs on each other's exports in the years that ensued, with China also being accused of interfering in Canada's elections.

But Carney has sought a pivot, and Beijing has also said it is willing to get relations back on "the right track".

The Canadian leader, who on Thursday met with Premier Li Qiang, is also scheduled to hold talks with business leaders to discuss trade.

Canada, traditionally a staunch US ally, has been hit especially hard by Trump's steep tariffs on steel, aluminium, vehicles and lumber.

Washington's move has prompted Canada to seek business elsewhere.

In October, Carney said Canada should double its non-US exports by 2035 to reduce reliance on the United States.

But the United States remains far and away its largest market, buying around 75 percent of Canadian goods in 2024, according to Canadian government statistics.

While Ottawa has stressed that China is Canada's second-largest market, it lags far behind, buying less than four percent of Canadian exports in 2024.

Officials from both countries have been in talks to lower tariffs and boost bilateral trade, though an agreement has yet to be reached.