* Leaders address tensions over cybersecurity
* Agreement to pressure North Korea on nuclear arms
* Eight hours of talks at desert retreat
By Matt Spetalnick, Steve Holland and John Ruwitch
RANCHO MIRAGE, Calif., June 8 U.S. President
Barack Obama confronted Chinese President Xi Jinping over
allegations of cyber theft on Saturday but they agreed at a
shirtsleeves summit in the California desert on reining in North
The two leaders debated how to handle China's growth as a
world power more than 40 years after President Richard Nixon's
groundbreaking visit to Mao Zedong's Communist China in 1972
ended decades of estrangement between Washington and Beijing.
While Obama publicly emphasized the U.S. desire for a
"peaceful rise" by China, privately he laid out some specific
examples to Xi of what the United States says is Chinese cyber
American officials have voiced increasing alarm at cyber
spying from China that has hit U.S. businesses and Obama is
under pressure to take steps to stop it amid controversy in
America about the extent of his own government's
The Washington Post reported recently that China had
accessed data from nearly 40 Pentagon weapons programs.
Obama's message to Xi carried a warning, "that if it's not
addressed, if it continues to be this direct theft of United
States property, that this was going to be a very difficult
problem in the economic relationship," White House national
security adviser Thomas Donilon said.
Chinese State Councillor Yang Jiechi told reporters Beijing
wanted cooperation rather than friction with the United States
over cybersecurity. Xi had told a news conference with Obama on
Friday that China itself was a victim of cyber attacks but that
the two sides should work together to develop a common approach.
"Cybersecurity should not become the root cause of mutual
suspicion and friction, rather it should be a new bright spot in
our cooperation," Yang said.
But while cyber attacks were a sore spot, the two leaders
found common ground on North Korea, whose belligerent rhetoric,
nuclear tests and missile launches have frustrated its only
ally, Beijing, and raised tensions in the Asia Pacific.
American officials came away from the Obama-Xi summit
believing that China is ready to work more closely with the
United States on North Korea than it has in the past, but
offered no specific concrete measures to be taken.
Donilon told reporters that Obama and Xi "agreed that North
Korea has to denuclearize, that neither country will accept
North Korea as a nuclear-armed state and that we would work
together to deepen cooperation and dialogue to achieve
Yang told a separate news conference that Xi had told Obama
that China and the United States were "the same in their
positions and objectives" on the North Korean nuclear issue.
CHINA STILL N. KOREA ALLY
Beijing has resisted full implementation of U.N. sanctions
against its impoverished neighbor out of fear a collapse of the
reclusive state could trigger chaos on China's border.
Analysts cautioned that it remained unclear and probably
unlikely that Beijing had changed its fundamental calculus about
North Korea, an old Cold War ally that serves as a buffer
between China and democratic South Korea, which hosts 28,000
"Going back a very long time, China and North Korea have a
lot of problems, and don't particularly like each other, but
they've needed each other and in a certain real sense they still
do," Alan Romberg, director of the East Asia program at the
Stimson Center, a Washington thank tank.
In one tangible outcome of the summit, Obama and Xi agreed
to cooperate in fighting climate change by cutting the use of
hydrofluorocarbons, or HFCs, which are greenhouse gases.
In talks that may set the stage for U.S.-Chinese relations
for years to come, both Obama and Xi appeared to gain something
from talks that both used to try to advance a new model of
cooperation between the world's lone superpower and its rising
economic competitor in Asia.
Obama, whose second term has gotten off to a rocky start at
home, was able to break away from domestic political troubles
and advance U.S. interests in Asia, even as he faces a new
controversy over a government-run domestic surveillance program
that in recent days has emerged as far more expansive than
Xi was able to promote directly to Obama his desire for a
"new model of major country relationship," in which China would
be viewed as an equal global player.
Many questions remain unanswered about U.S.-Chinese
relations in the wake of the talks. Concerns about the U.S.
military "pivot" toward Asia were unresolved, while Washington's
worries about China's military assertiveness are ongoing.
To that end, Obama urged Xi to de-escalate a contentious
territorial dispute with Japan over remote islands in the East
China Sea and deal with the matter through diplomatic channels,
A maritime territory dispute over islets in the East China
Sea has escalated to the point where China and Japan scramble
fighter jets and patrol ships shadow each other.
The United States, a formal security ally of Japan, says it
is neutral about sovereignty over the islets, but opposes use of
force or unilateral efforts to change the status quo.
For its part, China urged the United States to halt its arm
sales to Taiwan.
Aside from the discussion of various disputes, the overall
objective of the summit appeared to have been reached, as Obama
and Xi simply got to know each other and injected some warmth
into often chilly relations.
Obama also seized the opportunity to strike an even deeper
personal bond with Xi by meeting the Chinese leader's glamorous
wife, Peng Liyuan, a famous singer, for tea before bidding the
couple farewell at the end of the summit.
There had been some talk that Obama's wife, Michelle, had
snubbed the Chinese first lady by staying back in Washington,
but the Chinese knew well in advance that Mrs. Obama needed to
stay home while her two daughters finished the school year.
"Terrific," was how Obama described the sessions when asked
by a reporter how the talks were going.
The Obama-Xi visit included a 50-minute one-on-one session
on Saturday morning that included a stroll outside in the desert
heat, and a Friday night dinner of lobster tamales, porterhouse
steak and cherry pie prepared by celebrity chef Bobby Flay.
China experts say if Obama and Xi can develop personal
rapport - something lacking between U.S. presidents and Xi's
notoriously wooden predecessor, Hu Jintao - and make at least
some progress on substantive issues, the summit could
gain historic significance.
"One would hope that there's a level of confidence that
emerges from this meeting, and it's something that's very
personality-specific," said Richard Solomon, a former assistant
secretary of state.
(Additional reporting by Paul Eckert in Washington; Editing by
Alistair Bell and Eric Walsh)