"The United States welcomes the rise of a prosperous, peaceful and stable China," Obama said in a speech at the Asia-Pacific Economic Cooperation (APEC) summit in Beijing.
But he also walked a delicate line between reaching out to Beijing and raising thorny issues, following up the visa announcement with calls for China to free up its markets and tightly controlled exchange rate, and to respect human rights and media freedoms.
"Our primary message has been to make sure violence is avoided," he told reporters, adding that the US would "continue to have concerns about human rights" in China.
China has labelled the demonstrations illegal and has previously told Washington to stay out of the issue.
More From This Section
The consular deal for both countries' citizens will see student visas extended to five years, with the validity of business and tourist visas stretched out to a decade, up from one year now.
"This agreement could help us more than quadruple those numbers," he said, describing it as an "important breakthrough which will benefit our economies, bring our people together".
"I'm pleased that President Xi has been a partner in getting this done."
China sends nearly 100 million tourists abroad annually and represents a growing and increasingly coveted source of high-spending visitors in destination countries.