SINGAPORE and China have signalled their intentions to further cooperation on key projects, while taking stock of the factors that have underpinned 25 years of warm diplomatic relations.

Singapore's President Tony Tan Keng Yam and Chinese President Xi Jinping agreed to work towards an upgrade of the China-Singapore Free Trade Agreement (FTA), as the two leaders met on Friday in a key leg of Dr Tan's maiden state visit to China as president.

An upgrade is timely given that the pact came into effect in 2009, said a statement from Sinagapore's Ministry of Foreign Affairs (MFA) on Friday. Dr Tan expressed hope that the upgrade will commence within the year and be concluded swiftly.

Dr Tan and Mr Xi also noted the good progress made on the exploration of a third government-to-government project in western China. The two governments had earlier worked together on the Suzhou Industrial Park and the Sino-Singapore Tianjin Eco-City.

Mr Xi said that the third project would be a priority and can serve as a demonstrative project for China's "One Belt One Road" initiative, as well as the Western Region Development and the Yangtze River Economic Belt strategies.

The pledge to work on these bilateral initiatives come as both sides reviewed the warm ties that have been fostered since diplomatic relations were formalised 25 years ago.

Dr Tan is in China for his first state visit as president, as part of a series of activities to mark the occasion.

In their meeting on Friday, Mr Xi attributed the successful relationship to the big-picture, long-term approach that leaders from both countries have taken, state media Xinhua reported.

China and Singapore both focus on development strategies and look for economically complementary activities to work on, Mr Xi noted, adding that the two countries have also built effective mechanisms for cooperation.

He said that the two countries should continue to strengthen strategic communications and political trust, maintain high-level interactions, and deepen trade and economic cooperation.

Despite the regional tensions that have arisen due to territorial disputes in the South China Sea, Mr Xi on Friday told Dr Tan that China values the path of peaceful development and good neighbourliness. He said China wants to cooperate with Asean.

For its part, Singapore - which will take over as country coordinator for Asean-China Dialogue Relations in August - will work hard to build mutual trust and strengthen ties between Asean and China, Xinhua quoted Dr Tan as saying.

Mr Xi held a welcome ceremony for Dr Tan yesterday, complete with a 21-gun salute, and also hosted the Singapore leader to a state banquet at the Great Hall of the People. The two also witnessed the signing of three memorandums of understanding, in areas of education and research development.

On a busy day of political meetings, Dr Tan also met Premier Li Keqiang.

Dr Tan on Friday also jointly hosted a lunch reception with top Chinese political adviser Yu Zhengsheng, commemorating the 25th anniversary of diplomatic ties.

At the event, Mr Yu said the two countries "need to make sure that this friendship is passed from generation to generation and that our cooperation grows into a lush tree laden with fruits".

The two leaders also witnessed the handing over of a cheque for 3.7 million yuan (S$803,640) to the China Foundation of Poverty Alleviation, to build three hostels for 1,000 students in Ludian.

The funds were raised by Singapore companies operating in China for the county in south-western Yunnan, which was hit by an earthquake last August that killed more than 600 people.

Dr Tan ends his six-day state visit on Saturday.