Zardari, on his first state trip since taking office in September, was greeted by Hu at Beijing's Great Hall of the People, the seat of power in China.

Hu extended an effusive welcome, stressing close bilateral ties going back to the premiership of Zardari's late wife Benazir Bhutto, who was assassinated last December, and her father, late president Zulfikar Ali Bhutto.

"Your entire family are old friends of the Chinese people," Hu told Zardari.

"This is something we will never forget."

The two leaders signed 11 agreements, one on technical and economic co-operation.

The Financial Times newspaper has reported, without citing sources, that Zardari would seek a soft loan of between 500 million and 1.5 billion dollars from China to help cash-strapped Pakistan out of a financial crisis.

Zardari inherited nearly empty government coffers and huge security problems from Islamic extremists. The global financial crisis has pushed Pakistan closer to the financial brink.

Reports, denied by Islamabad, have said the country faced bankruptcy perhaps as soon as February.

Zardari, who had praised China as "the future of the world" before departing Pakistan for Beijing, told Hu the selection of China as his first overseas visit reflected the importance of bilateral ties.

"The only way I could do justice to the memory of my late wife and my late father-in-law was to make sure that I made my first president's trip to China," he said before the two leaders went in for meetings.

Pakistan's ambassador to China, Masood Khan, said earlier in an interview with Pakistan television station Geo that an agreement on a civilian nuclear pact with China could be reached during the trip.

China's foreign ministry has confirmed the subject would be discussed but gave no specifics.

If an agreement is signed, it would come after the United States last week signed a deal with Pakistan's rival, India, to open up sales of civilian nuclear technology to New Delhi for the first time in three decades.

Liu Xuecheng, a researcher with the China Institute of International Studies, told AFP any such agreement should not raise alarm bells for other countries.

"The nuclear cooperation between China and Pakistan is confined to civilian use. It has lasted for some time and... will continue," Liu said.

"We should view this with a normal mentality. We should not view the relationship among these countries with a Cold-War attitude."

The visit also comes as Islamabad's anti-terror alliance with Washington has become strained amid American impatience with Pakistani efforts to root out Taliban and Al-Qaeda fighters in its lawless border region.

Zardari said in his interview with Xinhua that he would seek to step up co-operation with China in the fight against terrorism.

China has long been one of Pakistan's closest political and economic partners, with Beijing looking to Islamabad as a counterbalance to India.

Zardari is also set to meet on Thursday with Premier Wen Jiabao.

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