By Chris Buckley and Matt Spetalnick
WASHINGTON (Reuters) - U.S. President Barack Obama and Chinese President Hu Jintao vowed on Wednesday to work to find common ground after a year of strains over economic imbalances, North Korea and a host of other issues.
The leaders of the world's only superpower and its fastest-rising rival opened a Washington summit that put the focus on often diverging agendas on currencies, trade, global security and human rights.
Welcoming Hu to the White House, Obama said the visit was a chance to demonstrate that "we have an enormous stake in each other's success."
"Even as our nations compete in some areas, we can cooperate in others," he said.
Gently raising China's human rights record, Obama said: "History shows that societies are more harmonious, nations are successful and the world is more just when the rights and responsibilities of all nations and all people are upheld, including the universal rights of every human being."
Hu said he had come to the United States to "enhance mutual trust" and hoped his visit would open a "new chapter" in cooperation but that the two countries should respect each other's "development path."
Hu was greeted with a 21-gun salute, honour guards and the playing of both national anthems, a carefully choreographed ceremony meant to convey recognition of China's growing international stature.
But while handshakes and smiles set a positive tone, the red-carpet treatment was not expected to make it any easier to achieve breakthroughs in Wednesday's talks or even narrow differences significantly.
Some in Washington and Beijing are treating the summit as a gauge of how well the two powers can work in concert as China's ambitions expand in line with its rapid economic growth.
U.S. Secretary of State Hillary Clinton called for more cooperation from China in dealing with North Korea's nuclear program and "provocative behaviour." She also said the Obama administration was pressing Beijing "very hard to gets its entities into compliance" with U.N. sanctions on Iran.
"We bear special responsibilities as the first and second biggest economies ... because of the threat to world stability posed by the nuclear programs in North Korea and Iran," Clinton told Chinese television.
"So this is a critical juncture to determine how good the cooperative relationship between our two countries can be."
CHINESE RESISTANCE
Hu has been reluctant to give ground to U.S. demands to intensify pressure on China's ally, North Korea, to abandon its nuclear ambitions. North Korea recently caused alarm by shelling a South Korean island and claiming advances in uranium enrichment that could boost its nuclear weapons capability.
Beijing also has bristled at U.S. demands for faster appreciation of its currency, the yuan, which would make Chinese goods relatively more expensive and possibly help lower China's trade surplus with the United States, which Washington puts at $270 billion.
U.S. lawmakers are impatient for results and a meagre outcome at the summit could raise congressional pressure on China over the trade deficit and the way Beijing manages the yuan.
A survey by the American Chamber of Commerce in Shanghai showed a growing number of U.S. companies say China's enforcement of intellectual property rights has deteriorated in the last year and that the regulatory environment is the biggest hurdle to doing business there.
Hu is likely to raise his worries about U.S. economic and security policies, including arms sales to Taiwan, the self-ruled island that China deems an illegitimate breakaway province.
The arms sales to Taiwan, even at the time when cross-Strait relations are improving, is the single most important factor jeopardizing U.S.-China military ties, Major-General Yao Yunzhu, a senior military researcher, wrote in the official China Daily on Wednesday.
Beijing also wants the Obama administration to reassure it that China's big holdings of U.S. treasury assets are not threatened because of what some critics describe as loose U.S. fiscal policies.
Offering a tangible achievement for Hu's state visit in addition to billions of dollars in corporate deals, the United States and China planned to announce a deal to create a jointly financed security centre in China.
The aim is to increase training to improve security at nuclear sites and keep better track of nuclear materials and could also entail joint exercises for responding to nuclear disasters and terrorism, a U.S. official said.
SWADDLED IN CEREMONY
The talks between Obama and Hu come swaddled in ceremony and they are unlikely to trade sharp public jabs that could upset the careful diplomatic stagecraft.
The images from the White House will be a valuable diplomatic laurel for Hu as he enters into his final stretch as China's leader before leaving office in late 2012.
China has sought to soothe U.S. ire about job losses and the trade deficit by sprinkling business deals that could be worth over $8.5 billion in the run-up to Hu's visit.
Raising hopes for more possible deals to come, several U.S. and Chinese business leaders will meet on Wednesday at the White House. Obama and Hu are due to drop by that meeting.
U.S. executives due to attend the meeting include Microsoft Corp chief executive Steve Ballmer, Goldman Sachs chief executive Lloyd Blankfein, General Electric chief executive Jeff Immelt and Boeing chief executive Jim McNerney.
(Additional reporting by Matt Spetalnick and Caren Bohan in Washington, Ben Blanchard and Sui-Lee Wee in Beijing; Editing by John O'Callaghan)
