Chinese President Hu Jintao on Saturday arrived in Lahore as he continues a four-day visit to Pakistan to strengthen a strategic alliance between the countries.
Following meetings the previous day with Pakistan President Pervez Musharraf in Islamabad that produced a broad spectrum of 18 cooperation agreements, the leaders were to inaugurate a special economic zone in Lahore.
They will also attend an afternoon reception in the city's ornate 17th century Shalimar gardens.
China signed a free trade pact with close ally Pakistan Friday with a promise to supply radar-borne early warning and control system (AWACS) to Islamabad.
Analysts said the FTA and AWACS deals could have long-term impact on the South Asian region.
Both Pakistan and India have expressed concern at each other's efforts to acquire AWACS in the past.
The Pakistan Air Force announced on Friday that it had agreed with Chinese Aviation Industries "for long-term collaboration and co-development in the fields of aircraft manufacturing and other related fields including AWACS".
At a joint press conference addressed by Hu and Musharraf, both countries agreed to expand ties in defence, nuclear, economic and trade sectors.
"China will continue to view its relations with Pakistan from a strategic and long-term perspective and we are ready to work together with Pakistan to raise our partnership to a new level," Hu said.
Pakistan gave Hu the honour of addressing the nation live on state television Friday. He became the first foreign leader to do so since then US president Bill Clinton in 2000.