Image source, ReutersImage caption, Both leaders are speaking virtually
US President Joe Biden is speaking to his Chinese counterpart Xi Jinping in a highly anticipated virtual meeting.
Mr Xi said that China was "ready to move US-China relations forward in a positive direction".
Both sides began by outlining areas that the two countries needed to talk about. Mr Biden brought up human rights and the Indo Pacific region.
Mr Xi said it was important that both countries respected each other and required a "steady relationship".
He added that he was happy to see his "old friend" Biden.
For his part, Mr Biden said, "Maybe I should start more formally, although you and I have never been that formal with one another," according to a Reuters report.
He added that both men had "always communicated with one another very honestly and candidly", adding "we never walk away wondering what the other man is thinking".
At the meeting Mr Xi said the two countries needed to improve "communication" and face challenges "together," amid heightened tensions over Taiwan and other flashpoint issues.
He also said healthy China-US relations were needed in order to face global challenges like climate change and Covid-19, Chinese state media said.
"Humanity lives in a global village, and we face multiple challenges together. China and the U.S. need to increase communication and cooperation." said Mr Xi.
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In a statement released on Friday, the White House said "the two leaders will discuss ways to responsibly manage the competition between the United States and the PRC, as well as ways to work together where our interests align".
This is the third time the two leaders have spoke since Mr Biden's inauguration in January. The meeting is expected to last several hours.
Mr Xi has not left China in nearly two years, since the outbreak of the Covid-19 pandemic.