In an earlier meeting with Gates at the Microsoft campus in Redmond, Hu reassured his host that China is serious about intellectual property rights (IPR) protection.

"Regarding IPR protection, it's not only needed by China as it opens up more to the outside world and improves the investment environment, it is also needed as we strengthen our innovation ability."

"We have already improved protection of intellectual property rights through laws. We will seriously keep our promise."

Gates expressed his appreciation for the Chinese Government's efforts in IPR protection.

Microsoft and China's National Development and Reform Commission on Tuesday signed a memorandum of understanding on co-operation in software in the next five years.

At Microsoft Corp's campus, Hu said he admired what Bill Gates had achieved.

"You, Mr Bill Gates, are a friend of China. I'm a friend of Microsoft," Hu said through a translator.

"Also, I use the operating system produced by Microsoft every day," he added, to laughter.

Gates responded: "Thank you, it's a fantastic relationship," and then quipped: "And if you ever need advice on how to use Windows, I'll be glad to help."

Hu accompanied by Gates, company CEO Steve Ballmer and an entourage of Chinese dignitaries witnessed business technology demonstrations and toured Microsoft's Home of the Future, which features experimental technology that might someday be used in people's living spaces.

Hu, who was later greeted by elementary school children from Seattle's John Stanford International School, wrote in Chinese using a Tablet PC: "Long live Sino-American friendship."

The Chinese president arrived here on Tuesday local time to start a four-day state visit to the United States.

In her meeting with Hu, Gregoire suggested that China open a trade office in Washington State.

Two-way trade in 2004 between China and Washington State grew 400 per cent from 2000, reaching US$20.3 billion, making China the state's third-largest trade partner after Japan and Canada.

After his meeting with the governor, Hu addressed a closed-door meeting of 250 members of Seattle's Chinese community.

Those present said Hu told the group he hopes his meeting with President Bush would improve the dialogue between the two countries.

The Sino-US relationship, as one of the world's most important bilateral ties, is not just a matter for the two countries, Hu said.

"Better relations between the two countries and the two peoples are of significance to peace and development in the Asia-Pacific region and the world at large," he noted.