A confrontation with the US would be a disaster so each country should respect the other's sovereignty, Chinese President Xi Jinping warned on Wednesday during the opening of an annual dialogue.

Headed by US Secretary of State John Kerry and Treasury Secretary Jack Lew, the two-day Strategic and Economic Dialogue will most likely revolve around North Korea's nuclear ambitions and the territorial spats between China and its Southeast Asian neighbors, Reuters detailed.

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Additional factors that contributed to the tensions between the two giant economies are the hacking and cyberespionage charges that the US filed against China in May. Five Chinese military officers were indicted in the case, leading to the suspension of the Sino-US cyber security cooperation.

Xi said the cooperation between Washington and Beijing is very important and that a confrontation between the two countries would spell disaster for both them and the world. He called for mutual respect and equal treatment between the US and China.

The Chinese leader also encouraged the two nations to respect each other's sovereignty and means of development. He added that both countries should focus on boosting cooperation in anti-terror efforts and a bilateral investment treaty.

US officials earlier said Kerry will bring up concerns over Beijing's "problematic behavior" amidst disputes in the South China Sea. Although the US did not take sides in the spats, it had criticized China's behavior in the disputed waters that are also being claimed by Vietnam, Brunei, Taiwan, Malaysia, and the Philippines.

China, on the other hand, thinks the US is encouraging the Philippines and Vietnam to take a more aggressive stance in the dispute. However, Kerry said they do not want to "contain" China.

Kerry said they want China to emerge as a "peaceful, stable, prosperous" nation that takes responsibility in world issues and helps the region achieve stability. He added that competition with China is in their agenda, but they do not aim to stir conflict.

Washington will push Beijing to expedite economic reforms and help the Chinese yuan rise against the US dollar, Lew said in the opening rites. He said they will support China's efforts to achieve economic growth and transition to a market-driven exchange rate.

The US-China talks have produced only a few important agreements, partly because of the complexity of relations that come with China's rising power. However, US officials emphasize that the dialogue is important to make sure that the two nations do not end up with a confrontation.