(Fixes typo in paragraph 15)
By Lesley Wroughton and Michael Martina
BEIJING, July 10 China and the United States
agreed on Thursday to boost military ties and counter-terrorism
cooperation during high-level annual talks in Beijing, but there
was little immediate sign of progress on thorny cyber-security
or maritime issues.
The two-day talks, led by Secretary of State John Kerry and
Treasury Secretary Jack Lew for the United States and Vice
Premier Wang Yang and top diplomat Yang Jiechi for China, were
never expected to achieve great breakthroughs.
The Strategic and Economic Dialogue, now in its fifth year,
is more about managing an increasingly complex and at times
After discussions on topics ranging from the value of
China's currency to North Korea, Yang said the two sides agreed
to strengthen cooperation in counter-terrorism, law enforcement
and military-to-military relations.
He gave few details.
On two of the most sensitive issues - maritime disputes and
cyber-spying - Yang largely restated Beijing's position on both.
"The Chinese side will continue to steadfastly protect its
territorial and maritime rights" in the South and East China
Seas, Yang told reporters as the talks wrapped up.
"China urged the U.S. side to adopt an objective and
impartial stance and abide by its promise to not take sides and
play a constructive role in safeguarding regional peace and
Washington insists it has not taken sides but has criticised
China's behaviour in the potentially energy-rich South China
Sea, where the Philippines, Vietnam, Malaysia, Brunei and Taiwan
have overlapping territorial claims with China.
Beijing, however, views the United States as encouraging
Vietnam and the Philippines to be more assertive in the dispute,
and of backing its security ally Japan in the separate spat over
uninhabited islands in the East China Sea.
China's Foreign Ministry criticised the Philippines on
Thursday for extending by one year a drilling permit for
London-listed Forum Energy Plc for a natural gas project
in the disputed Reed Bank area of the South China Sea.
"Any foreign companies carrying out development of oil or
gas in China's territorial waters without obtaining permission
from China are breaking the law," ministry spokesman Hong Lei
told a daily briefing.
CYBER TALKS FRANK
On Internet security, Kerry told reporters that discussions
were frank, and both sides agreed it was important to keep
It was unclear if any progress was made in resuming the
activities of a cyber working group that Beijing suspended in
May after the United States charged five Chinese military
officers with hacking.
"The loss of intellectual property through cyber has a
chilling effect on innovation and investment. Incidents of cyber
theft have harmed our businesses and threatened our nation's
competitiveness," Kerry said.
Chinese hackers broke into the computer networks of the
United States government agency that keeps the personal
information of all federal employees in March, the New York
Times reported this week, citing senior U.S. officials.
Yang said China wanted cooperation on cyber issues on the
basis of mutual respect and trust.
"China believes cyber-space should not become a tool to harm
other countries' interests. China hopes the U.S. side can create
the conditions to carry out U.S.-China dialogue and cooperation
on the Internet," he said.
China sees the United States as being hypocritical on the
subject following revelations about Washington's own spying by
former U.S. intelligence contractor Edward Snowden.
Kerry also repeated his earlier message that Washington
wanted a strong, prosperous and stable China.
"And we mean what we say when we emphasise that there's no
U.S. strategy to try to push back against or be in conflict with
China," he told Chinese President Xi Jinping in Beijing's Great
Hall of the People.
(Writing by Ben Blanchard; Editing by Dean Yates)