Obama, Xi Urge New Relations Amid Hacking Row

Throwing formality aside at a desert retreat, the U.S. and Chinese leaders pledged a new approach in ties, but President Barack Obama took the rising power to task on cyber-hacking charges.

Skipping the usual summit pageantry, Obama and Chinese President Xi Jinping both went without neckties at a resort under the blazing California sun as they looked to forge a personal chemistry for the years to come.

In their first meeting since Xi assumed power in March, Obama voiced hope that the U.S. superpower and fast-growing China "can forge a new model of cooperation between countries based on mutual interest and mutual respect."

"It is in the United States' interests that China continues on the path of success because we believe that a peaceful and stable and prosperous China is not only good for the Chinese, but also good for the world and the United States," Obama said before a leisurely dinner.

Hovering over the summit at the Sunnylands retreat was a vexing question for both countries -- whether China's rise to regional and global prominence will mean an inevitable clash with the United States.

Obama wasted no time in hitting a key theme of the visit from the U.S. side -- complaints of an alleged Chinese Internet spying effort targeting American military and commercial secrets and intellectual property.

He voiced concern over the alleged theft -- which a recent study said was costing the U.S. economy hundreds of billions of dollars a year -- and urged "common rules of the road" to protect against hacking.

"President Xi and I recognize that, because of the incredible advances of technology, the issue of cybersecurity and the need for rules, and common approaches to security have become increasingly important," Obama said.

"It's critical, as two of the largest economies and military powers of the world, that China and the United States arrive at a firm understanding," Obama said.

Obama, who will hold a second day of talks with Xi on Saturday, said the two had not yet discussed cyber-security in-depth. Ahead of the summit, the two countries announced working-level talks to clear up the issue.

Xi said he wanted to clear up "misgivings" by the United States about cybersecurity, telling reporters that China was also "a victim of cyberattacks."

Xi invited Obama to pay a parallel informal visit to China. Mirroring his host's theme of a new approach, Xi said: "The vast Pacific Ocean has enough space for two large countries like the United States and China."

"We're meeting here today to chart the future of China-U.S. relations and draw a blueprint for this relationship," Xi said, next to aides in identical business casual outfits.

Xi, who is expected to lead China during a decade in which it will overtake the United States as the world's largest economy, reiterated his frequent, if occasionally vague, call for world powers to think differently about relations.

"We need to think creatively and act energetically, so that, working together, we can build a new model of major country relationship," Xi said.

The 59-year-old leader holds credibility as the son of one of China's founding revolutionaries and speaks in a confident, free-flowing style, a shift from the stilted formality of his predecessor Hu Jintao that frustrated the White House.

The two leaders had not been expected to meet until the G20 summit in Russia in September. But both sides, sensing uncertainty seeping into a complicated and often difficult relationship, saw value in an earlier encounter.

"Our decision to meet so early I think signifies the importance of the U.S.-China relationship," Obama said.

"It's important not only for the prosperity of our two countries, and the security of our two countries, but it's also important for the Asia-Pacific region, and thus for the world."

The president also pledged that the United States would raise human rights, a longstanding concern of U.S. lawmakers and campaigners who deplore China's harsh treatment of democracy advocates, religious groups and ethnic minorities.

"History shows that upholding universal rights will ultimately be a key to success and prosperity and justice," Obama said.

In troublesome optics for Obama, the summit comes as he faces criticism over revelations that the United States has run a massive Internet and telephone surveillance program for security purposes.

The White House rejected charges the scandal weakened Obama's hand and instead said the row showed how the United States holds vibrant discussions on individual rights.