China’s President Xi Jinping has said he believes his visit will lift UK-China relations to a “new height”.
The UK and China were becoming more interdependent and a “community of shared interests,” he told MPs.
Earlier Mr Xi and his wife, Peng Liyuan, took part in a procession along The Mall to Buckingham Palace, where a state banquet will be held later.
The visit comes amid job losses in the UK steel sector, with cheap Chinese imports among factors being blamed.
Tata Steel has announced the latest in a series of cuts, with 1,200 jobs going at its plants in Scunthorpe and Lanarkshire. Prime Minister David Cameron has said he will raise the steel issue in talks with Mr Xi.
Addressing peers and MPs in the Royal Gallery at Westminster, the Chinese leader said that, although his four-day visit had just started, he was “deeply impressed by the vitality of China-UK relations”.
“Although China and the UK are located at opposite ends of the Eurasian continent, we have a long shared deep mutual affection,” he said.
In an 11-minute speech, the president quoted Shakespeare as well as ancient Chinese proverbs, and referenced the involvement of Chinese troops in the Normandy landings in World War Two.
He was introduced by Commons Speaker John Bercow, who praised Myanmar’s opposition leader Aung San Suu Kyi and “the innate human right of freedom”.
BBC China editor Carrie Gracie said this would be perceived as a “bit of a dig” at China on the issue of human rights.
President Xi and Madame Peng then travelled to Clarence House to meet the Prince of Wales and the Duchess of Cornwall for tea.
Earlier, President Xi was welcomed by the Queen, the Duke of Edinburgh and Mr Cameron during the ceremony in Horse Guards Parade, while a 41-gun salute was held in nearby Green Park.
He then took part in a carriage procession along The Mall, as he headed to Buckingham Palace for lunch with the Queen.
Mr Xi will also hold talks with Mr Cameron and Labour leader Jeremy Corbyn later on Tuesday. Mr Corbyn’s spokesman said he would be “using the opportunity” of Mr Xi’s visit to raise his concerns on human rights.
Protests have been held on The Mall and outside Parliament by members of the Anti-China Free Tibet group and the human rights group Amnesty International.
Crowds of anti-China protesters and pro-China supporters also gathered in front of Buckingham Palace.
From the point of view of the Communist Party leadership, it’s imperative that the visit goes off without a hitch.
The government’s reputation for competence was undermined over the summer by the stock market meltdown, growing questions over economic growth and the Tianjin warehouse explosions.
The party needs President Xi to be shown respect internationally in order to bolster its own popularity and power at home.
Chinese state media have effused about “the reddest of red carpets” and a new golden era of “win-win results” between China and the UK.
In general the public is supportive of President Xi, thanks to his campaign against corruption and his carefully-crafted “man of the people” image. They too want to see their leader, and his glamorous celebrity wife, shown respect on the world stage.
But there is also a fascination among the emerging middle classes of China for things British, including royalty, contemporary music, fashion and TV drama.
Ministers expect more than £30bn of trade and investment deals to be struck during the four-day visit.
The Treasury hopes that within 10 years China will be Britain’s second biggest trading partner.
However, critics have accused the government of “kowtowing” to Beijing.
“If you act like a panting puppy, the object of your attention is going to think they have got you on a leash,” James McGregor, chairman of consultancy group APCO Worldwide’s Chinese operations, said.
Analysis By CARRIE GRACIE, October 20, 2015 in the BBC