Secretary of State Mike Pompeo and defence secretary James Mattis met with high-ranking Beijing policymakers in Washington to resolve ongoing tensions.
China and the United States have put tariffs on hundreds of billions of dollars of each other's goods and US President Donald Trump has threatened to set tariffs on the remainder of China's $500 billion-plus exports to the United States if their blistering trade dispute can not be resolved.
Defense Secretary Jim Mattis says the USA has told China that that the American military will "fly, sail and operate wherever global law allows".
Yang said China was committed to "non-confrontation" but that Beijing had the right to build "necessary defense facilities" on what it considers its own territory and urged Washington to stop sending warships and military planes close to the islands that Beijing claims.
However, speaking in Singapore at a forum on Wednesday, former US Treasury Secretary Henry Paulson said there was a risk of an economic "Iron Curtain" falling between China and the United States unless China carried out reforms and that some people in the United States would like to "divorce" China.
China wants to resolve problems with the United States through talks but it must respect China's choice of development path and interests, President Xi Jinping said on Thursday ahead of a meeting with the USA leader in Argentina.
The two sides should "properly manage differences and carefully prepare to ensure positive results in the Argentine meeting", politburo member Yang Jiechi told USA national security adviser John Bolton in Washington, China's Foreign Ministry said in a statement on Thursday.
A "frank" exchange of views can be expected in top-level diplomatic and security talks between the United States and China on Friday, including on issues such as human rights and the South China Sea, the USA ambassador to China said.
Pompeo has previously dubbed China as the primary adversary of the United States, but during the talks called Beijing "essential" in key areas - including North Korea.
Yang outranks the Chinese government's top diplomat, State Councillor Wang Yi.
The meeting paired Pompeo and Defense Secretary Jim Mattis with Chinese Politburo member Yang Jiechi and Defense Minister Wei Fenghe.
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"We have continued concerns about China's activities and militarization in the South China Sea", Pompeo said following the talks.
"China is committed to working with the United States to achieve a no-confrontational, conflict-free, mutually respectful co-operation in which both sides win", added Yang, who heads the ruling Communist Party's foreign affairs commission and outranks Wang.
Although the rescheduling of the dialogue signaled an effort by the two sides to contain the slide in the relationship, it did not address the core dispute on trade.
Since then relations have soured and they have become embroiled in a major trade war in which the United States has imposed tariffs on $250 billion worth of Chinese goods and China has retaliated with tariffs on $110 billion worth of USA goods.
Mr Trump has vowed to inflict more tariffs that would hit nearly all Beijing's United States exports if China retaliates further.
"China is in damage control mode", said Yun Sun, a China expert at the Stimson Center think tank, noting Beijing's uncertainty about what exactly Trump wants out of trade deal but its hopes that with US mid-term elections out of the way the mercurial American president may be more inclined to reach a compromise.
Trump has made reaching a denuclearization agreement with North Korea a top priority since his landmark summit in June with the totalitarian state's leader Kim Jong Un.
Pompeo also reiterated US criticism of China's "repression of religious groups", citing treatment of Buddhists in Tibet and minority Uighur Muslims in the Xinjiang region that has drawn condemnation from human rights groups.
After President Donald Trump's barbed comments against China in the runup to this week's congressional elections, Secretary of State Mike Pompeo turned conciliatory in tone if not always in substance.
"Foreign countries have no right to interfere", he said.
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