Prime Minister Modi was received by Chinese President Xi at the guesthouse.
Prime Minister Modi arrived here in the wee hours of Friday for a two-day visit to participate in an unprecedented 'informal' summit with President Xi and reset the ties, which took a hit post the two-month-long Doklam standoff.
Earlier, China's defence ministry had expressed its inclination to stable the bilateral military relations between the two countries.
They are expected to discuss issues of several bilateral interests while the on-going Doklam stand-off and China's veto on declaring Masood Azhar as a global terrorist and a fugitive might not figure in their talks.
Later in the day, the leaders are expected to go for a walk around the guesthouse.
President Xi would also host a dinner for Prime Minister Modi at Meiling Hall in the EastGuest Lake House.
Prime Minister Modi is staying at Hotel Wanda Reign situated in Huangpu, China. (ANI)