US sees progress on currency, cyberspace issues with China

WASHINGTON (AP) — The United States claimed progress Wednesday with China on currency issues and toward negotiating a code of conduct for cyberspace after two days of high-level talks that underscored sharp differences but paved the way for a visit by China's leader in the fall.

President Barack Obama rounded out the annual U.S.-China Security and Economic Dialogue by raising concerns to leaders of the Chinese delegation about Chinese cyber behavior and tensions over disputed seas of East Asia that have weighed on efforts by the two powers to forge a more cooperative relationship.

Administration officials have said they are increasingly confident that China's government was responsible for a massive breach of personnel records of as many as 14 million of federal employees and contractors.

Treasury Secretary Jacob Lew cited significant progress on a longstanding U.S. concern that China's currency is undervalued against the dollar, which helps Chinese exporters.

China pushed back against U.S. criticism of its conduct in the South China Sea, where its assertive behavior and land reclamation to advance its territorial claims have rattled its Asian neighbors, U.S. allies among them.

Washington took the unusual step last month of publicizing a U.S. military surveillance flight that showed the massive scale of China's island-building, which critics also say is damaging to the marine environment.