US prods China on exchange rate at annual talks

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U.S. Secretary of State John Kerry, third right, U.S. Treasury Secretary Jack Lew, second right, and U.S. Ambassador to China Max Baucus, second left, tour the Badaling section of the Great Wall of China with Chen Fei, left, deputy director of the Badaling Great Wall Special District, and Guo Jiaqiang, right, deputy director of the Badaling Foreign Affairs Office, in Beijing, July 8, 2014. (AP Photo/Jim Bourg, Pool)

BEIJING (AP) — The United States is prodding China to move toward a market exchange rate and settle its maritime disputes with neighbors.

China, meanwhile, is stressing the need to avoid confrontations so the world's two biggest economies can contribute to peace and prosperity around the world.

Officials from the two nations are meeting in Beijing for the annual "Strategic and Economic Dialogue."

Chinese President Xi Jinping formally opened the annual talks Wednesday, saying quote, "The vast Pacific Ocean has ample space to accommodate our two great nations."

The U.S. is being led by Secretary of State John Kerry and Treasury Secretary Jack Lew.

Lew says that both countries' workers and companies need a level playing field. He is urging reform of China's currency.