The United States and China on Tuesday opened annual high-level talks that are expected to highlight differences between the two powers regarding territorial disputes in the South China Sea and cyber-hacking.

North Korea was also expected to be on the agenda for the seventh U.S.-China Strategic and Economic Dialogue (S&ED) set to run through Wednesday. The talks are the highest-level regular dialogue channel between the two countries.

Representing the U.S. at the talks are Secretary of State John Kerry and Treasury Secretary Jacob J. Lew, while their Chinese counterparts are State Councilor Yang Jiechi and Vice Premier Wang Yang.

This week's talks come amid deepening tensions over China's ongoing construction of artificial islands in the South China Sea in an apparent bid to bolster its territorial claims in the waters also claimed by the Philippines and Vietnam.

The talks also come after recent revelations of a massive data breach that is believed to have compromised the personal information of at least 4 million past and current U.S. federal workers amid widespread suspicions that China might be behind the breach.

"Responsible (countries) adhere to international law and work together to keep international sea lanes open for unimpaired commerce," U.S. Vice President Joe Biden said during a speech at the opening session of the talks at the State Department. "Because nations that disregard diplomacy and use coercion and intimidation to settle disputes or turn a blind eye to aggression of others only invite instability and undermine the collaborative goals of the international community."

In an apparent swipe at China's computer piracy, Biden also said that countries that use cyber-technology as an economic weapon or profit from the theft of intellectual property "are sacrificing tomorrow's gains for short-term gains today."

Chinese officials called for respecting "each other's core interests."

"As long as our two countries adopt an overall perspective, respect and accommodate each other's core interests and be committed to a constructive approach to reduce misunderstanding and miscalculations, we can manage our differences and maintain our common interests," Chinese Vice Premier Liu Yandong said.

Vice Premier Wang emphasized the importance of dialogue.

"On some issues, perhaps, consensus still eludes us. However, talking to each other could help pave the way to finding a solution, or at least help keep our differences under control," he said. "Although dialogue may fall short of expectation, and sometimes nothing much is achieved, leaving everybody unhappy, yet it would always be more preferable than confrontation."

Kerry said that this week's talks will discuss regional security in the Asia Pacific, "including stability in the Korean Peninsula," and the need to reduce tensions rather than add to them in the South China Sea and the East China Seas.

Last week, Assistant Secretary of State Daniel Russel said that the U.S. will use the strategic talks with China to discuss ways to get North Korea out of the "fantasy" that it can revive its broken economy without having to give up its nuclear program. (Yonhap)