Beijing, China - Chinese leader Xi Jinping called Wednesday for "mutual respect" in strengthening relations with the US, warning President Donald Trump in a phone call to use "caution" when selling arms to Taiwan, Beijing's state media reported.

Xi expressed the hope that bilateral issues – amongst which trade figures highly – could be resolved amicably between the world's two largest economies.

"By tackling issues one by one and continuously building mutual trust, we can forge a right way for the two countries to get along," Xi said, according to state broadcaster CCTV.

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"Let us make 2026 a year in which China and the United States, as two major countries, move toward mutual respect, peaceful coexistence, and win-win cooperation," he added.

Trump, in a post on his Truth Social platform following what he called an "excellent" call, said ties between the two countries were "extremely good".

"The relationship with China, and my personal relationship with President Xi, is an extremely good one, and we both realize how important it is to keep it that way," Trump said.

The president said he and Xi discussed trade, Taiwan, the Russian war against Ukraine, and Iran, as well as a planned trip to China, which he said "I very much look forward to".

On Taiwan, however, Xi warned Washington to exercise caution in arms sales to the democratically-run island, which Beijing claims as its own territory.

"The Taiwan question is the most important issue in China-US relations... The US must handle arms sales to Taiwan with caution," Xi said, according to state broadcaster CCTV.

China's Communist Party has never ruled democratic Taiwan, but Beijing claims the island of 23 million people is part of its territory and has not ruled out the use of force to annex it.

Washington does not officially recognize Taiwan, but is the island territory's main military backer – although the tone of that support has softened slightly under Trump.

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The US approved $11 billion-worth of arms to Taiwan in December, Taipei said.

Shortly thereafter, China launched major live-fire drills to simulate a blockade around Taiwan's key ports.