Xi Jinping has greeted Donald Trump with an ominous warning about the risk of war between the US and China, as the two leaders sat down for crunch talks in Beijing. 

Trump had been dazzled moments earlier by the full red-carpet treatment laid on by his Chinese host, lavished with imperial pomp rarely afforded a US leader as he was met by goose-stepping troops, thundering cannons and flag-waving children.

But as the pair took their seats opposite each other in the Great Hall of the People in Tiananmen Square, Xi opened with a loaded reference to the so-called 'Thucydides Trap.'

The phrase refers to the ancient Greek historian Thucydides' account of Athens and Sparta, and describes the danger of conflict when an established power feels threatened by a rising civilization.

'The world has come to a new crossroads. Can China and the US overcome the Thucydides Trap and create a new paradigm?' Xi asked Trump across the table. 

During their two-hour summit, Xi warned Trump that if Taiwan is 'mishandled' the US and China 'will clash, or even come into conflict, pushing the entire relationship into a very dangerous situation,' state media channel CCTV reported.

Trump, seemingly unfazed by Xi's classical reference, was effusive in return and praised the pageantry of his welcome, calling it 'an honor like few have ever seen before', and singling out the 'happy and beautiful' children for special praise.

He told Xi: 'It's an honor to be with you, it's an honor to be your friend, and the relationship between China and the USA is going to be better than ever before.' 

It is Trump's first face-to-face with Xi since the Iran war erupted on February 28. 

The mood appeared upbeat as American business leaders were met by reporters as they left the Great Hall after the initial talks.

Tesla boss Elon Musk, Nvidia chief Jensen Huang and Apple's Tim Cook were spotted filing down the steps toward their bus.

'Wonderful,' Musk declared. Asked what had been achieved, the world's richest man replied: 'Many good things.'

Cook flashed a peace sign followed by a thumbs up, while Huang told the press gaggle: 'Meetings went well. Mr Xi and President Trump were incredible.'

The President's motorcade swept into Tiananmen Square at 10.01am Thursday almost exactly on schedule, with Trump emerging moments later in his signature dark suit and red tie to a blaring military fanfare. 

He walked over to Xi, who was waiting by the steps, and the pair shook hands, with Trump affectionately patting the Chinese leader's hand as they exchanged a few words. 

Xi, accompanied by Trump, then worked the front row of the heavyweight US delegation lined up on the steps, including Secretary of State Marco Rubio, Defense Secretary Pete Hegseth and Treasury Secretary Scott Bessent.

The two leaders then mounted a red and gold dais as a military band struck up the Star Spangled Banner and troops in full ceremonial dress marched past. 

Thundering cannon salutes boomed across Tiananmen Square round after round as Trump stood beside Xi, before the President broke into a broad smile as he saluted the troops.

A crowd of brightly dressed Chinese schoolchildren waved flowers and US and Chinese flags while chanting 'welcome, welcome, welcome to China'. 

The pair finally swept into the Great Hall after around 20 minutes of pageantry, US cabinet secretaries, officials and American business executives filing in behind them.

The two leaders buckled down for a roughly two-hour bilateral behind closed doors. 

Trump plans to press Xi to lean on Iran to accept a ceasefire and reopen the Strait of Hormuz, while Xi is widely expected to push for tariff relief and access to American-designed AI chips.

The summit was originally slated for March but was postponed when the war broke out.

Trump and Xi, leading the world's two largest economies, have plenty to hammer out over their two days together. 

Trump called on Xi to 'open up' his economy further to US businesses on Wednesday, with a 17-strong cohort of American CEOs flown in to the White House to act as economic negotiators and iron out roadblocks to further investment. 

The President arrived late Wednesday evening local time in the Chinese capital before heading to his hotel for rest.

Trump was greeted on the tarmac by a military band, roughly 300 students waving US and Chinese flags and the nation's Vice President Han Zheng.