China bluntly told the United States to stop sending ships and military aircraft close to islands claimed by Beijing in the South China Sea, during talks that set the stage for a meeting between President Donald Trump and President Xi Jinping later this month.
Defense Secretary Jim Mattis says the US has told China that that the American military will "fly, sail and operate wherever global law allows".
The United States also took Beijing's military to task over its assertive posture in the dispute-rife South China Sea, which has witnessed a series of incidents including the buzzing of a US Navy surveillance aircraft a year ago by a Chinese warplane.
While the focus will be on diplomacy and security, moves to try to resolve a damaging trade war between the two countries are expected to be touched upon ahead of a planned meeting between US President Donald Trump and Chinese President Xi Jinping at the G20 summit in Argentina at the end of November.
"The United States is not pursuing a Cold War or containment policy with China", Pompeo told a joint news conference.
China's foreign ministry said Yang Jiechi met United States national security adviser John Bolton on Wednesday and that the two sides should "properly manage differences and carefully prepare to ensure positive results in the Argentina meeting". "Rather we want to ensure that China acts responsibly and fairly in support of security and prosperity of each of our two countries". The annual U.S. -China Diplomatic and Security Dialogue was originally set for Beijing last month but had been called off amid rising tensions.
In July 2016, the Hague-based Permanent Court of Arbitration (PCA) issued a landmark ruling that Beijing's expansive "nine-dash line" claim to the South China Sea had no legal basis.
Chinese Defense Minister Wei Fenghe and Mattis warned against conflict, while comments by top Chinese diplomat Yang Jiechi and Pompeo underscored divisions between the world's two largest economies, now engaged in a trade war.
However, Yang and Chinese defense minister Wei Fenghe spoke of the need to improve cooperation, including between the US and Chinese militaries, to ease the risk of conflict as the two powers jockey for pre-eminence in the Asia-Pacific.
Navarro, the head of the White House National Trade Council who is known for his unorthodox economic views, said China had made empty promises to previous presidents and that Trump would not back down.
US officials said they would not halt so-called freedom-of-navigation patrols that are aimed at ensuring countries do not restrict traffic in worldwide waters. "Competition does not mean hostility".
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.
China and the USA have put tariffs on hundreds of billions of dollars of each other's goods and Trump has threatened to set tariffs on the remainder of China's US$500 billion-plus exports to the United States if the dispute can not be resolved.
Mr Trump has vowed to inflict more tariffs that would hit nearly all Beijing's USA exports if China retaliates further.
Senior Communist Party official Yang Jiechi, a veteran architect of Beijing's foreign policy, insisted that China allows freedom of religion and criticized the United States for what he saw as its own "militarization" of the South China Sea.
Xi told former USA secretary of state Henry Kissinger that he and Trump would have "a deep exchange of views" in Argentina, according to the Chinese state news agency. While the Trump administration has generally been soft-spoken on human rights, at least with allies, Pompeo denounced China's "repression" of religious and minority groups including the Uighur community, citing a United Nations report that up to one million members of the mostly Muslim ethnic group have been rounded up in detention camps. He signed the Taiwan Travel Act earlier this year, which encourages visits "at all levels" between US and Taiwanese officials.
Yang on Friday noted the Chinese government attaches great importance to social and economic development in Xinjiang and Tibet and has taken a host of measures to promote stability, "unity" and people's well-being there.