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Chinese President Xi Jinping shakes hands with Indian Prime Minister Narendra Modi during their visit at East Lake Guest House in Wuhan China

They endorsed the work of the special representatives to find a fair, reasonable and mutually acceptable settlement on the boundary issue.

The overseas edition of the ruling Communist Party's official People's Daily said in a front page commentary on Saturday "two great countries ought to have great cooperation", and showed a large picture of the two leaders shaking hands.

The two leaders were also seen riding on a houseboat and chatting over tea - a "chai pe charcha" moment.

China-India relations have been under considerable strain as the two nations compete for leadership in Asia.

Earlier on Saturday, Modi and Xi walked by the East Lake and took a boat ride on the scenic East Lake as they began their second round of talks. As per the understanding, officials of both sides will identify the project in follow up discussions and work out the modalities.

"We feel that there is no fundamental difference between China and India on the issue of supporting inter-connectivity", Chinese Vice Foreign Minister Kong Xuanyou said. "It will undoubtedly give impetus and new dynamics to China-India relations", Boris Volkhonsky, associate professor of the Institute of Asian and African Studies, Moscow State University, said.

It had been suggested in this space last Thursday that the two leaders' agreement on holding subsequent summits would indicate a positive environment for India-China ties.

"The two leaders further directed their militaries to earnestly implement various confidence-building measures agreed upon between the two sides, including the principle of mutual and equal security, and strengthen existing institutional arrangements and information sharing mechanisms to prevent incidents in border regions".

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China is India's largest trading partner although India has not yet signed up to President Xi's signature foreign policy plan to build a new "Silk Road" of infrastructure and trade links between China and Eurasia.

The news agency also quoted experts as saying that Xi-Modi meeting is significant for bilateral ties and regional cooperation.

Xi told Modi that their two countries' influence in world and region was steadily on the rise.

The two countries even went to war in 1962 amid a dispute over their 3,500-kilometer (2,200-mile) Himalayan border. "India is pursuing its "Make in India" initiative, so it is concerned the U.S. might one day do the same to it", said Associate Professor Lin Minwang, an expert on Sino-Indian ties at Fudan University.

Prime Minister Narendra Modi's two-day China visit has "accomplished" the objective of creating greater bonhomie between the two Asian giants, BJP general secretary Ram Madhav said as he asserted that there was no "frostiness" in Indo-China ties.

"And, if as expected, the "heart-to-heart" communication between the two leaders on Friday reflected their deepened mutual chemistry".

Hu Zhiyong, a research fellow at the Shanghai Academy of Social Sciences' Institute of International Relations, said the two leaders wanted to improve relations after the Doklam crisis. They committed themselves to cooperate on counter-terrorism.

China then accused India of border violation.