The newly sworn-in Indonesian leader landed in China on Friday, kicking off his first foreign tour seeking a more prominent position for Jakarta on the world stage.
Xi held a welcome ceremony for Prabowo at Beijing's Great Hall of the People, where the bilateral talks took place, according to Xinhua.
Beijing and Jakarta are key economic allies, with Chinese companies ploughing money into extracting Indonesian natural resources in recent years, particularly the nickel sector.
But the two countries have sparred verbally over disputed claims in the South China Sea.
Beijing has said it hopes the visit will take bilateral relations to a "new level".
"China is ready to work with Indonesia to take this visit as an opportunity to consolidate high-level political mutual trust," foreign ministry spokeswoman Mao Ning said at a regular briefing on Tuesday.
Prabowo is also meeting Premier Li Qiang and number three official Zhao Leji on his trip, which ends on Sunday.
He will travel onwards to Washington, at the invitation of US President Joe Biden, as part of a world tour which will also include Peru, Brazil and Britain.
Prabowo was sworn in on October 20, pledging to stick to Jakarta's traditionally non-aligned foreign policy while making the world's fourth-most populous nation more active abroad.
- Maritime disputes -
Confrontations over what Indonesia says are Chinese incursions into its territorial waters have weighed on the trading partners' relationship in recent years.
In 2020, Indonesia deployed fighter jets and warships to patrol around the Natuna islands in the South China Sea after Chinese vessels entered the area.
Last month, Indonesia said it drove Chinese coast guard ships from contested waters in the South China Sea on three separate occasions.
Indonesia says it is trying to stop foreign vessels from fishing in its waters, costing the economy billions of dollars annually.
Huge unexploited oil and gas deposits are believed to lie under the South China Sea, though estimates vary greatly.
Beijing has for years sought to expand its presence in contested areas of the South China Sea, brushing aside an international ruling that its claim to most of the waterway has no legal basis.
It has built artificial islands armed with missile systems and runways for fighter jets, and deployed vessels that the Philippines says harass its ships and block its fishers.
The latest confrontations are an early test for Prabowo, who has pledged to bolster the defence of Indonesian territory.
Prabowo has promised to be bolder on foreign policy than his predecessor Joko Widodo, who focused more on domestic issues.
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