US Vice President Joe Biden urged China to end its "outright" theft through hacking as the world's two largest economies waded into some of their thorniest disputes.
Biden opened two days of annual talks with China in which the Pacific powers pledged to build trust but are addressing a gamut of issues including mutual complaints over market access.
While many experts expect the session to be a talking shop without major decisions, Biden did not shy away from divisive rows, including charges of cyber-espionage.
"We both will benefit from an open, secure, reliable Internet. Outright cyber-enabling theft that US companies are experiencing now must be viewed as out of bounds and needs to stop," Biden said.
A recent US study said that corporate America was losing hundreds of billions of dollars a year through a vast, organized hacking campaign to steal US trade, government and military secrets.
China insists it is also the victim of hacking, and has demanded an explanation over assertions by US intelligence leaker Edward Snowden that US spies had broken into the billion-plus nation's Internet routing network.
China's ambassador Cui Tiankai, in remarks quoted by state media, called for the two countries to consider cyber security rules established by an international body such as the United Nations.
Biden also raised concerns about human rights, days after Chinese troops reportedly opened fire on Tibetans celebrating the birthday of their exiled spiritual leader, the Dalai Lama.
"I believe that China -- presumptuous of me -- ... will be stronger and more stable and more innovative if it represents and respects the international human rights norms. But there are differences we have," Biden said.
Secretary of State John Kerry, who left early to spend time with his ill wife, was "very forceful" about human rights in a closed session and raised specific cases, a US official said.
State Councilor Yang Jiechi, a top figure behind China's foreign policy, said Beijing was ready to discuss human rights but "on the basis of equality and mutual respect."
Biden also brought up China's tense territorial disputes with its neighbors, saying that both Pacific powers "benefit from freedom of navigation and uninhibited lawful commerce."
But both US and Chinese officials sought to keep an upbeat tone, voicing hope that the two nations can keep building trust following a friendly, informal summit last month between US President Barack Obama and his new Chinese counterpart Xi Jinping.
The White House said Obama would hold a previously unscheduled meeting with the two main Chinese officials on Thursday, in a sign of his focus on relations.
Biden warned that "strong voices on both sides of the Pacific" see ties between the United States and a rising China "in terms of mistrust and suspicion."
"I've heard the US-China relationship described as everything from the next Cold War to the new G-2 and, the truth is, neither are accurate," Biden said.
"Our relationship is and will continue to be, God willing, a mix of competition and cooperation. And competition can be good for both of us, and cooperation is essential," he said.
US officials said that they sought to ease China's concerns over the decision announced in March to deploy 14 more missile interceptors in Alaska.
The US side said the move was "much more about the North Korean threat" than China, an official said.
Yang called China a "responsible" country that has worked with the United States on the international financial crisis and in the "fight against terrorism."
"There are many common interests between us, as well as some friction and difficulties. However, our common interests far outweigh our differences," he said.
Ahead of the talks, known as the Strategic and Economic Dialogue, four top US lawmakers on trade policy made a joint call for China to do more to open its market and protect intellectual property.
The lawmakers, two from Obama's Democratic Party and two from the rival Republican Party, said China had failed to carry out promises from previous years such as phasing out pirated software from all government offices.
Treasury Secretary Jacob Lew was more diplomatic at the talks. He welcomed commitments by China and said he "will encourage China to follow through decisively."
Lew, in the opening of a session on the economy, also said it was "essential" for China to reform its exchange rate system.
US manufacturers accuse China of keeping its yuan artificially low to boost exports. But pressure has eased in recent months as China has let the yuan rise in response to inflation.