Gates, in a meeting with Chinese Foreign Minister Yang Jiechi before his talks with Hu, said he was optimistic the two governments could shore up uneasy military ties, which were suspended a year ago over US arms sales to Taiwan.
"We believe that President Hu Jintao's visit next week will be a major step forward in the US-China relationship," Gates said at the start of his meeting with Yang.
The Chinese foreign minister said the US defence chief's trip "shows the high importance the Chinese side places on the China-US relationship and on the military-to-military relationship".
However, the Pentagon chief's visit produced no breakthroughs on sensitive defence issues and no sign from Beijing that it was ready to overlook Washington's sale of billions of dollars in arms and weaponry to Taipei.
"China's position has been clear and consistent. We are against it," the defence minister, General Liang Guanglie, said Monday, referring to the US deals with self-ruled Taiwan.
With an increasingly powerful China pushing to assert itself in the Pacific and the Americans vying to retain a dominant role in the region, US officials are anxious to build up a dialogue to avoid potential crises.
Washington's military relations with China have lagged behind trade and diplomatic ties, and Gates hopes to nudge the Chinese towards an approach similar to Cold War-era exchanges between the Americans and the Soviets.
But Gates' appeals over the past four years for a permanent security dialogue have failed to persuade Chinese generals, who resent the arms deals with Taiwan and the US naval presence in the South China Sea.
After Monday's talks, the Chinese backed more military exchanges but stopped short of endorsing a US proposal for a "strategic dialogue" focusing on nuclear, missile defence, space and cyber-weaponry, agreeing only to study the idea.
In his first visit to China since 2007, Gates -- a former CIA director -- will get a rare glimpse on Wednesday of the Second Artillery Corps headquarters, the command centre for China's nuclear and missile arsenal.
China's pursuit of advanced anti-ship missiles and other weapons have US officials worried, seeing it as a threat to America's naval reach in the Pacific.
The United States, however, has little leverage as China flexes its newfound economic and military muscle. Washington is grappling with mounting fiscal pressures, cutting back some weapons programmes while waging a costly war in Afghanistan.
The rivalry between the Asian juggernaut and the stretched superpower is fuelling an arms race, though Chinese military leaders insist the modernisation effort is purely for the country's defence.
In response to China's military investments, Gates said Sunday before arriving that he had proposed funding for new radar, unmanned naval aircraft and other weaponry.
Japan last month labelled Beijing's military build-up a global "concern", citing its increased assertiveness in the East and South China Seas.
Gates said earlier his discussions would cover recent tensions on the Korean peninsula, including China's role in helping to ease a crisis that began after Pyongyang's deadly shelling of a South Korean island in November.
After his visit to China, Gates heads to Tokyo on Wednesday and Seoul on Friday for meetings focused on the Korean crisis.