Obama says US, China must develop cyber rules

RANCHO MIRAGE, California (AP) - United States President Barack Obama and Chinese President Xi Jinping were wrapping up a two-day summit at which they tackled the contentious issue of cybersecurity and tried to forge closer ties between the leaders of the world's largest economies.

Mr Obama and Mr Xi opened their second day of talks on Saturday with a staged walk for the press through the grounds of the Sunnylands estate in the California desert, with Mr Obama telling reporters the meetings have been "terrific". They chatted with each other through interpreters as they walked along a manicured lawn, then over a small bridge. In the spirit of the informal summit, they went without jackets.

The issue of cyberespionage hangs over the summit, although both leaders carefully avoided accusing each other of the practice when talking to the press at the end of their first day of meetings. But they acknowledged an urgent need to find a common approach to addressing the matter.

Mr Obama described the cyber issue as "uncharted waters".

"We don't have the kind of protocols that have governed military issues and arms issues, where nations have a lot of experience in trying to negotiate what's acceptable and what's not," Mr Obama said during a news conference with Mr Xi late on Friday on the grounds of the sprawling Sunnylands estate.

The question-and-answer session with reporters was bookended by more than two hours of private talks and a working dinner.

US officials cast the more relaxed California summit as an opportunity for Mr Obama and Mr Xi to hold candid and free-flowing talks on the myriad issues that define the relationship between the two countries, including the economy, climate change and North Korea's nuclear provocations. It was their first meeting since Mr Xi took office in March.

However, it is cybersecurity that has taken on increasing importance to the Obama administration in its recent talks with China.

Because of advances in technology, the issue of cybersecurity and need for rules and a common approach towards cybersecurity are going to be increasingly important, Mr Obama said.

Mr Obama said it was critical that the US and China reach a "firm understanding" on cyber issues. But he stopped short of accusing China of orchestrating hacking attacks on American government and business computers.

Mr Xi claimed no responsibility for China's alleged actions. He said his nation was also a victim of cyberspying, but did not assign any blame.

The discussion on international cyberspying was juxtaposed with new revelations that the Obama administration is collecting data from US phone and Internet companies.

The President pushed back against the notion that the controversy over the widespread government surveillance undercut his credibility to take on China over cybersecurity. He insisted the two issues were separate and said concerns over hacking and intellectual property theft should not be confused with the debate over how governments collect data to combat terrorist threats.

"That's a conversation that I welcome," he said.

China, too, has concerns over cybersecurity, Mr Xi said, calling new technology a "double-edged sword" that can drive progress while causing headaches for governments and their regulators. Although he said China has been victimised by cybercrimes, he did not specify who may have perpetrated them.

Speaking more broadly, Mr Xi said he and Mr Obama believe the two countries can approach each other in a way "that is different from the inevitable confrontation and conflict". The US has started bringing its complaints about persistent Chinese computer-hacking into the open after years of quiet and largely unsuccessful diplomacy. It has accused Beijing's government and military of computer-based attacks against America.

While there have been no actual admissions of guilt, Chinese leaders have started acknowledging there is a problem and US officials say the Chinese seem more open to working with the US to address it.

On the economic front, US manufacturers have long contended that China is manipulating its currency to gain a trade advantage. The US trade deficit with China is the largest with any single nation. The US government, however, has declined to label China a currency manipulator in an effort to narrow the trade deficit through negotiation rather than confrontation.

The two presidents were originally scheduled to hold their first meeting of the year in September, on the sidelines of an economic summit in Russia. But both countries agreed there was a need to hold talks earlier.

US officials see Mr Xi, who took office in March, as a potentially new kind of Chinese leader. He has deeper ties to the US than many of his predecessors and appears more comfortable in public than the last president Hu Jintao, with whom Mr Obama never developed a strong personal rapport.

As the meetings continue, Mr Obama will also be looking to build on Mr Xi's apparent impatience with North Korea's nuclear provocations. The US has welcomed Mr Xi's recent calls for North Korea to return to nuclear talks, though it is unclear whether Pyongyang is ready to change its behavior.

Mr Xi is likely to press China's claims of business discrimination in US markets and express concern over Mr Obama's efforts to expand US influence in the Asia-Pacific region, which China sees as an attempt to contain its growing power.