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 The two leaders also unveiled a deal to build on a landmark
emissions agreement struck last year, outlining new steps they will
take to deliver on pledges they made then to slash their greenhouse
gas emissions.
Speaking after White House talks during Xi's first U.S. state visit,
Obama quickly homed in on the thorniest dispute between the world's
two biggest economies - growing U.S. complaints about Chinese
hacking of government and corporate databases, and the suspicion in
Washington that Beijing is sometimes behind it.
"It has to stop," Obama told reporters at a joint news conference in
the White House Rose Garden, with Xi standing beside him. Obama said
he and Xi made "significant progress" on cyber security.
But he added warily: "The question now is, are words followed by
actions?" and made clear he is prepared to levy sanctions against
cyber criminals.
The two leaders said they agreed that neither government would
knowingly support cyber theft of corporate secrets or business
information.
But the agreement stopped short of any promise to refrain from
traditional government-to-government cyber spying for intelligence
purposes. That could include the massive hack of the federal
government's personnel office this year that compromised the data of
more than 20 million people. U.S. officials have traced that back to
China but have not said whether they believe the government was
responsible.
Xi reiterated China's denial of any government role in the hacking
of U.S. corporate secrets and said the best way to address the
problem was through bilateral cooperation and not to "politicize
this issue."
"Confrontation and friction are not the right choice for both
sides," he said. China has routinely insisted that it too is a
victim of cyber hacking.
Analysts said the agreement was significant. James Lewis, senior
fellow at the Center for Strategic and International Studies, said
the leaked plan for sanctions helped push the Chinese toward a
better-than-expected agreement, but noted that Beijing also got
Washington to consider some Chinese concepts for norms of behavior.
POMP AND TECH
Obama hosted a lavish black-tie state dinner for Xi on Friday night,
featuring Maine lobster and Colorado lamb for about 200 guests, with
technology executives featured among them.
Seated with Obama and Xi at the head table were Apple CEO Tim Cook,
Satya Nadella of Microsoft, Facebook's Mark Zuckerberg and
Salesforce.com's Marc Benioff.
In their dinner toasts, both leaders focused on the theme of
friendship. But Obama also referenced the tensions. "There will be
times when there are differences between our two countries. It's
inevitable," Obama said, also gently urging China to accept diverse
views and "uphold the rights" of all people.
Earlier in the day, the two men struck a serious, businesslike tone
when they appeared before reporters, showing little sign of close
personal rapport as Obama laid out concerns with Beijing's economic
policies, territorial disputes with its neighbors and its human
rights record.
As the two leaders spoke, dozens of pro- and anti-Xi protesters
gathered near the White House grounds, waving flags, beating drums
and shouting slogans.
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U.S. and Chinese officials sought to cast their talks in a favorable
light by showcasing at least one area of cooperation – the global
fight against climate change.
As part of their agreement, Xi announced that China, the world's
biggest emitter of greenhouse gases, will launch a national carbon
cap-and-trade system in 2017 to help contain the country's
emissions.
For Obama, the deal with China strengthens his hand ahead of a
global summit on climate change in Paris in December.
But disagreements on other issues loomed.
Obama told Xi after a 21-gun salute at a morning welcoming ceremony
that the United States would continue to speak out over its
differences with China, but he reiterated that the United States
welcomes the rise of a China that is "stable, prosperous and
peaceful."
Xi, who faces rising nationalism at home as well as pressure to get
China's economic house in order, called for "mutual respect."
In their talks, Obama also pressed Xi to follow through on economic
reforms and not discriminate against U.S. companies operating in
China. Some analysts believe Obama has more leverage due to China's
slowing economic growth, which has destabilized global markets.
At the same time, the Obama administration is still at a loss about
how to curb China's assertiveness in the South China Sea, where
Beijing has continued to reclaim land for potential military use
despite conflicting claims with its neighbors.
Xi defended his government's "right to uphold our own territorial
sovereignty" and denied any plan to use its island-building efforts
to create military strongholds.
In a reminder of potential flashpoints, the United States and China
also finalized a plan aimed at reducing the risk of aerial
collisions between warplanes in areas such as the South China Sea
through adoption of common rules of behavior.
(Additional reporting by Jeff Mason, Valerie Volcovici, Joseph Menn,
Julia Edwards, David Brunnstrom, Roberta Rampton, Phil Stewart;
Writing by Matt Spetalnick; Editing by Frances Kerry and Ken Wills)
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