By Ian Talley

BEIJING--Chinese President Xi Jinping warned Wednesday that confrontation between China and the U.S. would be a "disaster" for the world, as the two sides began high-level talks aimed at reversing a downturn in relations over the past year.

The two countries must "break the old pattern of conflict and opposition between great powers," Mr. Xi said at the opening of the annual U.S.-China Strategic and Economic Dialogue in Beijing.

"Cooperation between China and the U.S. can help both countries and the rest of the world accomplish great things," Mr. Xi told five of President Barack Obama's cabinet-level officials and a host of other senior U.S. administration officers.

"Confrontation between the U.S. and China would be a disaster for both countries and the rest of the world," Mr. Xi said, speaking just over a year after his first presidential summit with Mr. Obama.

This year's two-day talks aren't really about resolving long-running disputes over trade irritants and calming geopolitical hot spots, officials and analysts say. They are primarily about ensuring that the world's two largest economies don't fall headlong into hostile conflict, a dynamic that the last century proved can wreak global havoc.

"Throughout history, there has been a pattern of strategic rivalry between rising and established powers," U.S. Secretary of State John Kerry said at the opening of the talks.

The U.S. and China can avoid such enmity, Washington's top diplomat said at one of the grand halls in the Diaoyutai State Guesthouse, a sprawling, leafy compound in western Beijing.

"It's not inevitable. It is a choice," he said.Flush with a newly equipped navy, an economy that threatens to overtake the U.S. as the world's largest and growing leverage in capitals around the world, China's new leadership has been flexing its geopolitical muscles. That has complicated an already rocky relationship with the U.S.

Tensions between Washington and Beijing have risen in recent months as the U.S. has increasingly challenged China over cybersecurity and backed allies in territorial disputes along the Asian country's maritime borders.

Washington fears Beijing's aggressive tactics could spark a dangerous escalation in regional disputes, including with U.S. ally Japan. A rash of recent incidents in disputed waters has heightened U.S. concerns.

China, meanwhile, fears that the U.S. rebalance toward Asia is primarily an effort to contain the country's rise in the region and is emboldening its neighbors to challenge Beijing. China has also been irritated by the U.S. indictment in May of five Chinese military officers for alleged cybertheft--a geopolitical slap in the face following the allegations of former National Security Agency contractor Edward Snowden that the U.S. engaged in extensive cyberespionage against China.

Even though the delegations will delve into a number of well-worn issues such as exchange-rate policy, intellectual-property rights and cutting greenhouse-gas emissions, massaging the relationship is the highest priority for both nations.

"It's fundamentally about having the right conversations to maintain a healthy, dynamic relationship with China that doesn't drift towards inevitable strategic rivalry or confrontation," a senior U.S. official said ahead of the talks.

Yuan Zheng, a senior fellow with the Institute for American Studies at the state-affiliated Chinese Academy of Social Sciences, said, "The most important thing at these meetings is for the U.S. and China to establish channels of communication that will prevent a crisis from unfolding."

Signaling Beijing's priority for the talks, Mr. Xi told visiting former U.S. Treasury Secretary Henry Paulson last week that the two countries should "plant more flowers, not thorns," according to Chinese state media reports.

"That's a message to the U.S. that this is an opportunity to improve the tone and improve the atmosphere in the relationship," said Bonnie Glaser, a top China expert at the Center for Strategic and International Studies and a U.S. government adviser on East Asia. "They're frustrated with us, we're frustrated with them."

Ms. Glaser said that if the U.S. can convince Beijing that Washington's rebalance toward Asia isn't really aimed at forging an anti-China coalition in the region, it "would be a great accomplishment."

Mr. Kerry tried to make the point in his opening remarks. "Let me emphasize to you today: The U.S. isn'tseeking to contain China," he said, adding that Washington wanted a stable and prosperous China that "chooses to play a responsible role in world affairs."

Mr. Obama, in a statement, said the dialogue should "demonstrate to the world that--even in a relationship as complex as ours--we remain determined to ensure that cooperation defines the overall relationship."

In an indication of the current limits of that cooperation, however, one of the few areas of agreement highlighted at this week's talks is a deal to coordinate on illegal trafficking of wildlife.

Josh Chin and Jeremy Page contributed to this article

Write to Ian Talley at ian.talley@wsj.com

(END) Dow Jones Newswires

July 09, 2014 08:12 ET (12:12 GMT)

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