Internet hacking will be among a slew of issues on the table during two days of talks in Beijing, with Secretary of State John Kerry and Treasury Secretary Jacob Lew leading the US delegation.
China in May angrily suspended a cybersecurity working group after the US took the unprecedented step of indicting five Chinese military officers for cyber-spying, accusing them of hacking into US computers to steal trade secrets.
Kerry will also push for the resumption of the working group, which was only set up about a year ago.
"It's urgent, frankly, that the United States and China cooperate in helping to develop international standards" for the use of and security of the Internet, Russel said, adding the group was the right forum to allow experts to work out codes of conduct.
The top US issue is that "corporate data from US firms is being stolen via cyber means by actors in China and that information is being transferred to Chinese state-owned enterprises," he said.
"There is a growing body of evidence that points to direct Chinese government involvement in that behaviour. Clearly to us that means that the Chinese government has the ability to stop it," Russel insisted.
Washington has called on the Chinese government to "look into any and all allegations and take action to prevent this kind of cyber economic theft."
"It is more in the character of a wide-ranging and broad relationship that includes areas of cooperation, areas of competition and areas of friction," he added.
"The trick of course is to manage friction in an effective and constructive way.
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