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US and China hold 'candid' security and economy talks

The United States and China have held "candid" talks at the start of three days of cabinet-level meetings. A senior State Department official said that the security talks were at the highest level of diplomatic exchange.

Maritime disputes and cyber hacking were among the top issues discussed on Monday as Washington pledged to resolve simmering problems between the world's biggest two economies at the two-day Strategic and Economic Dialogue (S&ED).

The event, hosted by Vice President Joe Biden, Secretary of State John Kerry and Treasury Secretary Jacob Lew attracted almost 400 Chinese officials. The US delegation, led by Deputy Secretary of State Antony Blinken, reiterated concerns about China's recent pursuit of territorial claims in the South China Sea.

Cyber issues high on the agenda

State Department spokesman John Kirby said that the United States was firmly committed to "improving its relationship with China" despite mutual distrust on cybercrime and data protection. Yet both countries said they recognized the need for cooperation in the evolving and growing cyber world.

"While our countries disagree on many points, we recognize that there are many areas for mutually beneficial cooperation," Blinken told reporters.

But another State Department official told Reuters that not having a forum in which to discuss cyber issues in particular "didn't make it any easier" to resolve any such disputes. A bilateral cyber working group had been suspended by Beijing last year after Washington indicted five Chinese military officers for hacking into US computers to lift intellectual property and US government secrets.

It was disclosed that Blinken and Secretary of State Kerry would chair the security side of the talks with State Councillor Yang Jiechi and Vice Foreign Minister Zhang Yesui on the Chinese side. US Treasury Secretary Jack Lew and Chinese Vice Premier Wang Yang were intended to lead the economic elements.

Top Chinese officials were scheduled meet President Obama at the White House on Wednesday.

New trade ties at stake

The two countries maintain robust economic ties worth $590 billion in two-way trade last year alone - despite the many differences in their complex relationship. Investments on both sides might even grow, as the two nations were also expected to discuss a Bilateral Investment Treaty which has been seven years in the making. China was also likely to press its bid to add its currency, the yuan, to the International Monetary Fund's basket of reserve currencies.

The talks come as President Obama is struggling to secure backing from Congress for legislation needed to speed a 12-nation trade deal for Asia.

ss/bw (AFP, Reuters)

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