Beijing: US Secretary of State John Kerry on Monday warned China against attempts to resolve the South China Sea dispute through "unilateral actions" while Chinese President Xi Jinping said the two countries must properly manage their differences avoiding "major disturbance" in ties.
"The US will make it clear that we are looking for a peaceful resolution to the dispute the disputes of the South China Sea (SCS)," Kerry said speaking here at the opening ceremony of the two-day strategic and economic dialogue between the world's two biggest economies.
"We are not a claimant. We have taken no position on any of the claims of any claimant. The only position we've taken is let's not resolve this by unilateral action; let's resolve this through rule of law, through diplomacy, through negotiation," he said.
He urged all nations to find a diplomatic solution, rooted in international standards and rule of law, countering Chinese criticism of US interferences in the SCS dispute.
The SCS dispute has become flash point between the two countries as the US backed the Philippines, Vietnam, Malaysia, Brunei and Taiwan to counter China's claims of almost all the SCS.
China also declined to take part in the international tribunal which is currently hearing the Philippines' petition under the UN Convention on Law of Seas (UNCLOS).
Beijing accuses Washington of trying to expand its influence in the region taking advantage of the SCS dispute.
Kicking off the talks, billed as the most important annual dialogue between the two countries, Xi said differences between China and the US are quite normal.
"So long as the two sides tackle differences and sensitive issues in the principle of mutual respect and equality, the bilateral relations can avoid major disturbance," Xi said, adding that China and the US should strengthen communication and cooperation on Asia-Pacific affairs.
Commenting on Xi's remarks that US and China followed two systems, Kerry said, "We acknowledge that. We respect that. But the value of our ties is most clearly respected and reflected in outside-of-government meeting rooms ? in busy work places, academic settings, scientific laboratories, music halls, athletic fields, and in the freedom of daily communication between our people."
The SCS dispute was likely to dominate the two-day talks along with a host of other issues including Taiwan, Tibet and India's inclusion in Nuclear Suppliers Group (NSG).
The US has expressed its firm backing to India's inclusion into the 48-member nuclear club building on the Indo-US nuclear accord but China has been insisting that there should be consensus among the members about inclusion of countries who have not signed the Non-Proliferation Treaty.
Officials in Beijing are hopeful of a solution as China-US dialogue is taking place ahead of two of NSG's key meetings on June 9 in Vienna and June 24 in Seoul during which the issue was expected to come up.
As India pressed its case, Pakistan too has applied amid reports that China is trying to push the case of its all weather ally.
President Pranab Mukherjee took up this issue with top Chinese leadership during his last month's visit here.
In his address, Kerry referred to concerns over nuclear proliferation specially relating to North Korea.
"Nuclear nonproliferation is another example. Together, we helped to negotiate the Joint Comprehensive Plan of Action and resolved the international community's 10-year-long concern about Iran's nuclear program, and we together removed a major threat to the stability of the Middle East and to the danger of proliferation," he said.
"And it is absolutely vital that we use this meeting in good spirit, in good faith, constructively, to work on those differences," he said.
During the two-day talks, top officials from both the countries would discuss issues relating to climate change, micro economics and policy, trade and investment, cooperation in Agriculture, science and technology and innovation, cooperation between US Fed and People's Bank of China, people-to-people contact to cultural exchanges.
The dialogue, which started in 2009, has become the highest-level, regular bilateral communication channel for the world's two largest economies to compare notes on key issues concerning diplomacy, security and economy.
High-level officials from the countries' education, culture, health, science and technology, women, sports and youth sectors will attend the talks.
This is the eighth dialogue and will be the last to be co-chaired by President Barack Obama's administration.