Singh and Wen discussed a range of issues of mutual interest during their 'restricted meeting', held at the Diaoyutai State Guest House.

National Security Advisor, M K Narayanan, Foreign Secretary Shivshankar Menon and Indian Ambassador to China Nirupama Rao were also present during the parleys.

Striking a positive note before his talks, Singh said bilateral ties were now poised to enter a "vibrant and dynamic phase".

"We attach high priority to strengthening our relations with China," he said adding that China was India's largest neighbour and a "focal point" of its "Look East" policy.

The vexed boundary issue is expected to figure prominently during the discussions though both sides do not expect any breakthrough at this stage. Special Representatives M K Narayanan and Dai Bingguo, senior Vice Foreign Minister, will brief the leaders on the progress in negotiations on the boundary problem.