China and the USA have been embroiled in a trade war for several months, placing tariffs on hundreds of billions of dollars worth of goods on both sides.
-China Diplomatic and Security Dialogue signals an effort by the two sides to contain the slide in the relationship, it's something of a placeholder ahead of a planned meeting at the end of the month between President Donald Trump and China's President Xi Jinping at a Group of 20 summit in Argentina.
Terry Branstad told reporters at the State Department on Thursday that the USA would seek progress on priority issues, including North Korea, and that there would also be discussions on strategic security and how "to avoid mistakes or accidents that can happen in the military arena".
Secretary of State Mike Pompeo, right, shakes hands with Chinese Politburo Member Yang Jiechi at the conclusion of a news conference at the State Department in Washington, Friday, Nov. 9, 2018.
Pompeo said the United States side had been "forthright in addressing significant differences between our nations" and laid out the Trump administration's larger goal.
However, speaking in Singapore at a forum on Wednesday, former US Treasury Secretary Henry Paulson said there was a risk of an economic "Iron Curtain" falling between China and the United States unless China carried out reforms and that some people in the United States would like to "divorce" China.More news: Flight attendant breastfeeds stranger's baby on flight
Trump has railed against China for what he sees as intellectual property theft, entry barriers to U.S. business and a gaping trade deficit.
"Both sides should seek an appropriate solution through equal and mutually beneficial negotiations", said Yang, adding that the essence of China, U.S. trade and economic ties is mutually beneficial. "Competition does not mean hostility".
Defense Secretary Jim Mattis said the talks were "candid" but that the two militaries looked to improve communication and avoid "miscalculation" at sea.
The U.S. pushed back, insisting it will continue to "fly, sail and operate wherever global law allows".
"The Chinese side made it clear to the United States that it should stop sending its vessels and military aircraft close to Chinese islands and reefs and stop actions that undermine China's sovereignty and security interests", he said.
Pompeo has previously dubbed China as the primary adversary of the United States, but during the talks called Beijing "essential" in key areas - including North Korea.More news: Rams' Marcus Peters to Saints' Sean Payton: 'Keep talking'
During a round of high-level talks in Washington, the two sides aired in sometimes blunt terms many of their main differences, including a bitter trade dispute, freedom of navigation in Asia-Pacific waters, self-ruled Taiwan, and China's crackdown on its Muslim minority.
"China is in damage control mode", said Yun Sun, a China expert at the Stimson Center think tank, noting Beijing's uncertainty about what exactly Trump wants out of trade deal but its hopes that with USA mid-term elections out of the way the mercurial American president may be more inclined to reach a compromise.
He branded the critics "unregistered foreign agents" who wanted to pressure Mr Trump into a deal.
The defense chiefs and top foreign affairs officials of the two countries met in Washington for a regular dialogue that had been pushed back amid months of spiraling tensions between the world's two largest economies.
Yang deflected the issue, saying that "matters related to Xinjiang are China's internal affairs".
"Within the confines of law, the government has taken steps to crack down on ethnic separatist activities and violent terrorist crimes to safeguard national security and life and property of the people", Yang said, seeming to refer to the Uighur detention camps in Xinjiang.More news: Smoking, diabetes, high BP greater risk factors in women