"The US will make it clear that we are looking for a peaceful resolution to the dispute - the disputes of the South China Sea (SCS)," Kerry said speaking here at the opening ceremony of the two-day strategic and economic dialogue between the world's two biggest economies.
"We are not a claimant. We have taken no position on any of the claims of any claimant. The only position we've taken is let's not resolve this by unilateral action; let's resolve this through rule of law, through diplomacy, through negotiation," he said.
The SCS dispute has become flash point between the two countries as the US backed the Philippines, Vietnam, Malaysia, Brunei and Taiwan to counter China's claims of almost all the SCS.
China also declined to take part in the international tribunal which is currently hearing the Philippines' petition under the UN Convention on Law of Seas (UNCLOS).
Beijing accuses Washington of trying to expand its influence in the region taking advantage of the SCS dispute.
"So long as the two sides tackle differences and sensitive issues in the principle of mutual respect and equality, the bilateral relations can avoid major disturbance," Xi said, adding that China and the US should strengthen communication and cooperation on Asia-Pacific affairs.
Commenting on Xi's remarks that US and China followed two systems, Kerry said, "We acknowledge that. We respect that. But the value of our ties is most clearly respected and reflected in outside-of-government meeting rooms - in busy work places, academic settings, scientific laboratories, music halls, athletic fields, and in the freedom of daily communication between our people."
(Reopens FGN 40)
Officials in Beijing are hopeful of a solution as China-US dialogue is taking place ahead of two of NSG's key meetings on June 9 in Vienna and June 24 in Seoul during which the issue was expected to come up.
As India pressed its case, Pakistan too has applied amid reports that China is trying to push the case of its all weather ally.
President Pranab Mukherjee took up this issue with top Chinese leadership during his last month's visit here.
"Nuclear nonproliferation is another example. Together, we helped to negotiate the Joint Comprehensive Plan of Action and resolved the international community's 10-year-long concern about Iran's nuclear program, and we together removed a major threat to the stability of the Middle East and to the danger of proliferation," he said.
"And it is absolutely vital that we use this meeting in good spirit, in good faith, constructively, to work on those differences," he said.
During the two-day talks, top officials from both the countries would discuss issues relating to climate change, micro economics and policy, trade and investment, cooperation in Agriculture, science and technology and innovation, cooperation between US Fed andPeople's Bank of China, people-to-people contact to cultural exchanges.
High-level officials from the countries' education, culture, health, science and technology, women, sports and youth sectors will attend the talks.
This is the eighth dialogue and will be the last to be co-chaired by President Barack Obama's administration.
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