Rome gave a lavish welcome to the Chinese president, Xi Jinping, his wife and entourage on Friday as Italy and China controversially pledged to strengthen trade and investment ties.

Xi is in the Italian capital on a two-day state visit, along with about 200 officials. He is expected to strike a range of deals worth up to €7bn and attend a gala dinner, where the tenor Andrea Bocelli will perform, during his visit.

The most contentious part of the trip is the signing, on Saturday morning, of a non-binding memorandum of understanding (MoU) that could lead to Italy’s participation in China’s Belt and Road Initiative (BRI), an ambitious project aimed at building a Silk Road-styled global trade network.

Italy would become the first G7 country to endorse a pact to participate in the project, which the US and EU fear will be used by China to embolden its political and strategic clout.

During a joint press conference with the Italian president, Sergio Mattarella, on Friday morning, Xi said the two countries wanted to “revitalise the ancient Silk Road” in order to “better share the fruits of humanity’s progress”.

Mattarella backed the project, saying Italy’s role would be crucial. He warned, however, that it must be a “two-way street” along which “ideas, talents, knowledge, future projects and far-sighted solutions to common problems transit as well as goods”.

The Chinese first lady, Peng Liyuan, greets the Italian president Sergio Mattarella’s daughter Laura at the presidential palace, in Rome, on Friday. Photograph: Quirinale press office/EPA

He raised the matter of human rights, calling for “constructive dialogue” at an upcoming EU-China summit on the issue in Brussels.

Dozens of Chinese businesspeople congregated in central Rome on Friday morning, waving their country’s flag as they awaited Xi’s arrival at the presidential palace.

The Italian press has had a field day, with La Repubblica describing Xi as “the Godfather of Rome” and Corriere headlining with “Xi in Rome: the escort fit for Kings”. Indeed, Xi was greeted at the presidential palace by guards on horseback, a privilege usually only given to monarchs and popes.

The Chinese president and the first lady, the folk singer Peng Liyuan, are staying in the royal suite at the plush Parco dei Principi hotel in Rome’s Parioli district. The Chinese first lady has been taken on a tour of some of the city’s museums.

The trip was orchestrated by Luigi Di Maio, the deputy prime minister and leader of the Five Star Movement, the populist party governing alongside the far-right League. Di Maio has been nurturing relations with China since the coalition came to power last June, making his first visit there in the autumn.

On Friday, he celebrated the first fruits of his labour: the transportation to China of Sicilian oranges by plane.

“This represents a small revolution for our ‘Made in Italy’ products,” he said. “From 2 April, for the first time, Sicilian oranges will arrive in China by plane. Italian entrepreneurs have been waiting for this for years, now small and medium-sized firms will be able to internationalise their business.”

Di Maio blundered during his maiden visit in November, calling the Chinese president “Ping” instead of Jinping.