Trade issues topped the opening on Wednesday of strategic and economic talks between the United States and China. U.S. business leaders say the high-level talks are an opportunity for U.S. officials to push for lower trade barriers.
Chinese officials say an unexpected drop in trade, both imports and exports, reflects rising labor costs and weak overseas demand -- key concerns for the world's two largest economies as their foreign and finance ministers meet in Washington.
U.S. Vice President Joe Biden, who opened Wednesday's talks, said the US-China relationship is crucial.
"The stakes are very high because it's fair to say that the dynamic that emerges between our nations will affect not just our peoples, but quite frankly have a significant impact on the entire world," Biden noted.
Two way trade was nearly $500 billion last year. And the economic relationship between the United States and China benefits not only their citizens but also serves worldwide peace and development, said Chinese Vice Premier Wang Yang.
"We need to raise our strategic mutual trust to new heights through dialogue," Wang said. "Trust starts with communication and exchanges. The more communication and exchanges we have the less misunderstanding and disagreement."
Stopping cyber theft of U.S. intellectual property is one area where there needs to be more progress, said Vice President Biden.
And even though Bejing's new government has moved to curb corruption and adjust currency rates, it risks further slowing growth if it does not remove obstacles to fair foreign competition, said U.S. business leader Calman Cohen.
"As China continues to make it far more difficult to compete with their national champions, who they provide special benefits to, I believe that companies around the world are going to not put all their eggs in the China basket," Cohen said.
China's more assertive foreign policy, especially its contested claims on nearly all of the South China Sea, is also a concern for Washington. Vietnam, the Philippines, Taiwan, Brunei and Malaysia are contesting those claims.
According to Michael Auslin at the American Enterprise Institute, the United States can help China resolve the dispute without threatening its sovereignty.
"I think it is really trying to express that when you're a country as large as China, so that you have multiple geographic fronts on which you must operate and in which you have interests, that you have to think very carefully about your approach in total as well as separately," Auslin said.
U.S. Secretary of State John Kerry said these annual talks are a chance for honest, wide-ranging conversations about agreements and differences.
"We will never agree on everything, and we will have candid conversations about those issues where we don't see eye to eye because that is absolutely the best way to constructively manage our differences and increase understanding," Kerry said.
The talks also include issues around climate change and cyber-security.