President Obama wants to strike up a friendly tone with Chinese President Xi Jinping when they meet today in California but the issues on the table are anything but informal. Patrick Chovanec, chief strategist at Silvercrest Asset Management, joins MoneyBeat. 
 
 President Barack Obama and China's new leader, Xi Jinping, made broad commitments Friday to work together on cybersecurity and to improve military-to-military relations as the two leaders wound up a first round of talks during an informal summit at the Sunnylands estate in Rancho Mirage, California. 
 
 But both leaders said they'd not yet had detailed talks on cybersecurity—one of the most contentious bilateral issues—and Mr. Obama said they would have "more extensive discussions" during a private dinner Friday night. They were due to hold more talks in the morning, before winding up the summit around midday Saturday. 
 
 Enlarge Image Close Agence France-Presse/Getty Images Chinese President Xi Jinping and President Barack Obama shake hands at the Annenberg Retreat, Calif. 
 
 At a news conference before the dinner, Mr. Obama said that China would have similar concerns about cybersecurity as its economy became more dependent on research and entrepreneurship. "Which is why I think we can work together on this rather than at cross purposes," he said. 
 
 Mr. Xi said: "By conducting good faith cooperation, we can remove misgivings and make information security and cybersecurity a positive area of cooperation between China and the U.S." 
 
 Enlarge Image Close Associated Press Chinese Vice Premier Deng Xiaoping sits in a model of the lunar rover vehicle during a tour of Johnson Space Center in Houston in 1979. 
 
 Cowboy Hats and Barbecue Notable visits to the U.S. by Chinese leaders 1979 Deng Xiaoping, following normalization of relations, famously dons a cowboy hat at a Texas rodeo—and set the tone for a decade of warming ties. 1997 Arrival of President Jiang Zemin, at invitation of Bill Clinton, formalizes a thaw in ties eight years after Tiananmen. 2002 President George W. Bush hosts Jiang at the Bush family ranch in Texas, after Beijing backs U.S.-led war on terror. They eat barbecue and take a truck tour of the ranch. 2006 President Hu Jintao is denied full state honors and confronted by a Falun Gong protester on White House lawn. 2011 President Obama receives Hu at the White House with full honors, even as bilateral tensions mount. Obama welcomes China's 'peaceful rise,' a term coined by Hu. 2012 Xi Jinping—then vice president and President Hu's presumptive successor—attends a Lakers game and reunites in Iowa with a couple he stayed with on a visit there in 1985 2013 Xi returns as president for an informal two-day summit with Obama in California. 
 
 Chinese and U.S. officials are both hoping that the informal format of the meeting—the two leaders' first since Mr. Xi became president in March—will give them the time and the right atmosphere to forge a personal rapport and reverse a downward spiral in relations that many analysts fear could lead to conflict. 
 
 Chinese Leaders' Postcards From America View Slideshow Associated Press Chinese Vice Premier Deng Xiaoping visited the U.S. in 1979 
 
 For Mr. Obama, who met Mr. Xi for the first time last year when he visited the U.S. as vice president, the summit was an opportunity to get to know the man who will lead China over the next decade. But the Obama administration also had a long list of economic and security concerns, many of which it has confronted China with for years, with mixed results. They include Chinese cyberespionage, North Korea's nuclear program, Beijing's maritime disputes in Asia and Chinese market reforms. 
 
 Mr. Xi, too, had much at stake, bringing with him a proposal to redefine the relationship with the U.S. as one of equal "great powers,"–a personal initiative that is part of his broader campaign to promote a "Chinese dream" of a strong nation reclaiming the position in the world that it held until the Opium Wars of the 19th Century. 
 
 Before the first round of talks, the two leaders—both wearing white dress shirts with open collars and no ties—walked together on the grounds of the estate in the 115-degree heat, and shook hands in front of the cameras. They each made brief statements calling for a new era of bilateral relations, although Mr. Obama stopped short of echoing Mr. Xi's "great power" formula. 
 
 The news conference was dominated by cybersecurity, talks on which could be complicated by the recent disclosures on electronic surveillance by Mr. Obama's own government. 
 
 "What both President Xi and I recognize is that because of these incredible advances in technology, that the issue of cybersecurity and the need for rules and common approaches to cybersecurity are going to be increasingly important as part of bilateral relationships and multilateral relationships," Mr. Obama said. 
 
 "In some ways these are uncharted waters and you don't have the kinds of protocols that cover military issues for example and arms issues where nations have a lot of experiencing in trying to negotiate what's acceptable and what's not." 
 
 Mr. Obama sought to draw a distinction between activities such as hacking or cyber-theft, and the kind of surveillance conducted by the National Security Agency. He also noted that cybersecurity wasn't just a concern for the U.S. and China, and that problems were often caused by nonstate actors. 
 
 "We're going to have to work very hard to build a system of defense and protections both in the private sector and in public sector even as we negotiate with other countries around the world in setting up common rules of the road," he said. 
 
 Mr. Xi remarked that in the days before the summit, he had noticed a sharp increase in media coverage of cybersecurity issues. 
 
 Enlarge Image Close AFP/Getty Images President Barack Obama, left and Chinese President Xi Jinping, right, hold a bilateral meeting in California. 
 
 "This might give people the sense or feeling that cybersecurity as a threat mainly comes from China or that the issue cybersecurity is the biggest problem in the U. S-China relationship," he said. "The application of new technology is a double-edged sword. On the one hand, it will drive progress…. on the other hand it might create some problems for regulators and it might infringe upon the rights of states, enterprises, societies and individuals." 
 
 He repeated China's long-standing position that it too has concerns about cybersecurity and is a victim of hacking attacks. 
 
 Mr. Xi also said the two sides should improve military to military relations, as well as cooperation on trade and the environment. He said he looked forward to maintaining close communication with President Obama, who he invited to visit China for a similar summit "at an appropriate time". 
 
 Mr. Obama said the two sides would "institutionalize and regularize" military-to-military talks that have often been suspended in the past, and which aren't yet formally part of a regular U.S.-China Strategic and Economic Dialogue, the latest round of which takes place next month. 
 
 Enlarge Image Close Getty Images President Barack Obama, left, and Chinese President Hu Jintao, right, in 2011. 
 
 Mr. Xi didn't appear to be using notes during either the news conference or his earlier statement with Mr. Obama—demonstrating a confidence in his own abilities and in his standing within the Communist Party that his predecessor, Hu Jintao, never displayed during his 10 years in office. 
 
 U.S. officials said Mr. Xi pushed for the summit and agreed to the informal format despite Chinese leaders' usual preference for highly scripted talking points approved in advance by China's top decision-making body, the Politburo Standing Committee. 
 
 Mr. Xi himself drew parallels with the 1972 meeting between Chairman Mao Zedong and President Richard Nixon in Beijing, which laid the ground for the normalization of relations six years later. Comparisons have also been made with a visit to the U.S. by Deng Xiaoping in 1979, signaling a return to personal diplomacy in the bilateral relationship. 
 
 But with expectations in China running so high, analysts say that if Mr. Xi fails to demonstrate a rapport with Mr. Obama—and entice the U.S. to reciprocate his overtures—he could face criticism at home for spurning a Chinese trend of consensus-based decision-making in favor of concentrating more power in his own hands. 
 
 Chinese media are already portraying the Sunnylands summit as a historic victory for Mr. Xi's "new-type great power" initiative—a formula designed to prevent the military conflict that has often arisen between a rising power and an established one. 
 
 "China and the United States must find a new path, one that is different from the inevitable confrontation and conflict between the major countries of the past," Mr. Xi said. "And that is to say the two sides must work together to build a new model of major country relationship." 
 
 Mr. Xi sought to allay U.S. concerns that his talk of national rejuvenation implied that China seeks to displace the U.S. as the dominant military power in Asia. 
 
 "I stated very clearly to President Obama that China will be firmly committed to the path of peaceful development," he said. "By the Chinese dream we seek to have economic prosperity, national renewal and people's well-being.…It is connected to the American dream and the beautiful dreams people in other countries may have." 
 
 Mr. Obama responded by saying he welcomed China's continued "peaceful rise"--echoing a term coined by Mr. Xi's predecessor, Hu Jintao, that has been used less frequently by Chinese officials since Mr. Xi took power. 
 
 Mr. Obama endorsed the goal of seeking ways to avoid conflict, but stopped short of echoing Mr. Xi's "great power" formulation, saying instead that he hoped for "more extended" and informal talks leading to a "new model of cooperation." 
 
 "We've got a lot of work to do to take these broad understandings down to the level of specifics and that will require further discussions not only today and tomorrow but for weeks, months, to come," he said. 
 
 "But what I'm very encouraged about is that both President Xi and myself recognize that we have a unique opportunity to take the US-China relationship to a new level and I am absolutely committed that we don't miss that opportunity." 
 
 Enlarge Image Close Newport News Daily Press/Associated Press Chinese President Jiang Zemin waves to the crowd during a visit to Colonial Williamsburg in 1997. 
 
 Beijing offered some apparent sweeteners in the run-up to the meeting in California. Chen Guangfu, the brother of Chen Guangcheng, the blind Chinese activist who took refuge in the U.S. Embassy last year and later moved to the U.S., said on Friday that Chinese authorities had issued passports to him and their mother, following long delays. 
 
 China also suggested last week that it might be willing to join U.S.-led talks to strike an Asia-Pacific free-trade agreement, which it previously denounced as part of a U.S. containment strategy. On North Korea, there were also glimmers of hope for the U.S. side, according to U.S. officials. The new Chinese leader has displayed less tolerance for North Korean sabre-rattling, and China recently ordered a state bank to close the account of North Korea's foreign-exchange bank. 
 
 The Xinhua news agency, a mouthpiece of the Chinese government, said Friday that the North Korean nuclear issue could be a "converging point," but called on Washington to improve its ties with Pyongyang. 
 
 —Andrew Browne in Chengdu and Tom Catan in Rancho Mirage, Calif. contributed to this article. 
 
 Write to Jeremy Page at jeremy.page@wsj.com and Colleen McCain Nelson at colleen.nelson@wsj.com 
 
 A version of this article appeared June 8, 2013, on page A1 in the U.S. edition of The Wall Street Journal, with the headline: Stakes Are High for Summit. ||||| The Obama administration is refining its use of offensive cyber operations to counter evolving threats of electronic assaults against the United States. 
 
 Caitlin Hayden, spokeswoman for the National Security Council, said Friday a directive signed by President Barack Obama last year calls for government cyber tools to be "integrated with the full array of national security tools we have at our disposal." 
 
 Hayden was responding a report in the British newspaper The Guardian that says Obama has ordered national security and intelligence officials to draw up a list of potential cyber targets overseas. 
 
 The Guardian report comes as Obama was about to meet with Chinese President Xi Jinping, with alleged Chinese hacking against the U.S. to be one of the main topics of discussion. 
 
 While the newspaper report offers details about Obama's directive that had not been made public before, the White House released a declassified summary of the directive in January. 
 
 Moreover, the Pentagon acknowledged in March that it was setting up a series of cyber teams charged with carrying out offensive operations to combat the threat of an electronic assault on the United States. 
 
 Gen. Keith Alexander, the top officer at U.S. Cyber Command and the National Security Agency, testified March 12 before the Senate Armed Services Committee that the potential for an attack against the nation's electric grid and other essential systems is real and that the federal government needed to take more aggressive steps. 
 
 At the time, Alexander said 13 cyber teams were being formed to guard the nation against destructive attacks in cyberspace, stressing that their role would be offensive. He also said the teams would work outside the United States, but he did not say where. 
 
 "This directive will establish principles and processes that can enable more effective planning, development and use of our capabilities," Hayden said in a statement Friday. "It enables us to be flexible, while also exercising restraint in dealing with the threats we face. It continues to be our policy that we shall undertake the least action necessary to mitigate threats and that we will prioritize network defense and law enforcement as the preferred courses of action." 
 
 The timing of Friday's report coincides with Obama's two days of meetings with Xi at a California retreat. Top issues are cybersecurity and North Korea's nuclear threats. 
 
 The Guardian's report is the third significant leak of classified information this week. Following other revelations, the Obama administration has conceded that it has been secretly seizing phone records from millions of Americans and scouring U.S. Internet data for evidence of potential terrorist plotting. 
 
 Obama himself weighed in Friday, defending the counterterrorism measures and noting that they are authorized and reviewed by Congress. He also said the Internet surveillance program does not apply to U.S. citizens or to people living in the United States. 
 
 "I don't welcome leaks, because there's a reason why these programs are classified," Obama said, before the latest Guardian report. "In our modern history, there are a whole range of programs that have been classified because, when it comes to, for example, fighting terror, our goal is to stop folks from doing us harm, and if every step that we're taking to try to prevent a terrorist act is on the front page of the newspapers or on television, then presumably the people who are trying to do us harm are going to be able to get around our preventive measures." 
 
 ____ 
 
 Associated Press writer Richard Lardner contributed to this report. ||||| BEIJING (AP) — China on Tuesday warned the United States was jeopardizing military ties by charging five Chinese officers with cyberspying and tried to turn the tables on Washington by calling it "the biggest attacker of China's cyberspace." 
 
 This wanted poster is displayed at the Justice Department in Washington, Monday, May 19, 2014, after Attorney General Eric Holder, Assistant Attorney General for National Security John Carlin, U.S. Attorney... (Associated Press) 
 
 China announced it was suspending cooperation with the United States in a joint cybersecurity task force over Monday's indictments, which accused the officers of stealing trade secrets from major American companies. 
 
 The testy exchange marked an escalation in tensions over U.S. complaints that China's military uses its cyber warfare skills to steal foreign trade secrets to help the country's vast state-owned industrial sector. A U.S. security firm, Mandiant, said last year it traced attacks on American and other companies to a military unit in Shanghai. 
 
 The charges are the biggest challenge to relations since a meeting last summer between President Barack Obama and his Chinese counterpart, Xi Jinping, in Sunnylands, California. 
 
 Ties already were under strain due to conflicts over what Washington says are provocative Chinese moves to assert claims over disputed areas of the East and South China Seas. Beijing complains the Obama administration's effort to shift foreign policy emphasis toward Asia and expand its military presence in the region is emboldening Japan and other neighbors and fueling tension. 
 
 Beijing has denied conducting commercial spying and said it is a victim of computer hacking, but has given little indication it investigates foreign complaints. 
 
 "The U.S. accusation against Chinese personnel is purely ungrounded and absurd," said a statement carried by the official Xinhua News Agency and read on the state TV midday news. 
 
 The Ministry of Defense warned that the U.S. accusations would chill gradually warming relations between the two militaries. 
 
 "The United States, by this action, betrays its commitment to building healthy, stable, reliable military-to-military relations and causes serious damage to mutual trust," it said. 
 
 Despite the pointed language, damage to U.S.-Chinese relations is likely to be limited, with little change in trade or military links, because Beijing realizes the indictment of the five officers is symbolic, said Shen Dingli, a director of the Center for American Studies at Shanghai's Fudan University. He has close ties to China's foreign policy establishment. 
 
 Beijing is unlikely to engage in tit-for-tat retaliation such as issuing its own indictments of American soldiers and probably will go ahead with plans to take part in U.S.-hosted naval exercises next month, Shen said. He said cybersecurity cooperation is likely to be suspended indefinitely, but that should have little impact because the joint group achieved little in its three meetings. 
 
 "Political, security and commercial espionage will always happen," Shen said. "The U.S. will keep spying on Chinese companies and leaders, so why can't China do the same?" 
 
 The Cabinet's Internet information agency said Chinese networks and websites have been the target of thousands of hacking attacks from computers in the United States. 
 
 "The U.S. is the biggest attacker of China's cyber space," Xinhua said, citing a statement by the agency. "The U.S. attacks, infiltrates and taps Chinese networks belonging to governments, institutions, enterprises, universities and major communication backbone networks." 
 
 Monday's indictment said the People's Liberation Army officers targeted U.S. makers of nuclear and solar technology, stealing confidential business information, sensitive trade secrets and internal communications. The targets were Alcoa World Alumina, Westinghouse Electric Co., Allegheny Technologies, U.S. Steel Corp., the United Steelworkers Union and SolarWorld. 
 
 The Justice Department said the charges should be a national "wake-up call" about cyber intrusions. American authorities have previously announced details of cyberattacks from China but Monday's indictment was the first accusation to name individuals. The Justice Department issued wanted posters with the officer's photos on them. 
 
 In announcing the suspension of its work with the cybersecurity group, the Chinese government warned of further retaliation "as the situation evolves." 
 
 The working group was established in April 2013, following the publication of allegations of spying by the Chinese military and held its first meeting last July. 
 
 The new indictment attempts to distinguish spying for national security purposes — which the U.S. admits doing — from economic espionage intended to gain commercial advantage for private companies or industries. 
 
 The United States denies spying for commercial advantage, though documents released by former National Security Agency contractor Edward Snowden said the NSA broke into the computers of Brazil's main state-owned oil company, Petrobras. Brazilian President Dilma Rousseff said if that was true, then the motive would be to gather economic information. 
 
 "China has already expounded its stance and is strongly opposed to stealing commercial secrets," said Xiong Zhiyong, a foreign relations specialist at Tsinghua University. "I think there is no difference between China and the United States in allowing cyberspying for national security, though there is no open announcement by the Chinese government." 
 
 The indictment says the Chinese hackers stole proprietary information from the companies and the labor union, including design specification for Westinghouse pipes and pricing and strategy information from SolarWorld. 
 
 Working from a building in Shanghai, prosecutors say, the hackers in some cases gained access to networks by sending emails to company employees that looked authentic but that actually contained a link to malicious code. 
 
 The defendants are believed to be in China and it was unclear whether any might ever be turned over to the U.S. for prosecution. 
 
 ___ 
 
 Associated Press writer Christopher Bodeen and researcher Yu Bing contributed to this report.
– Cyber-spying, trade, North Korea, US military maneuvers—there's no shortage of big issues for President Obama and Chinese President Xi Jinping to tackle tonight and tomorrow during their informal summit in Southern California. But the biggest emphasis is on establishing "personal chemistry," reports the Wall Street Journal. The leaders will have six hours of talks, a private dinner, and walks around the Sunnylands estate in Rancho Mirage to try to achieve it. As the summit opened this evening, Obama said he hoped it would establish a "new model of cooperation" between the nations, and Xi used the phrase "a new model of major country relations," reports Politico. China's alleged cyber-spying is likely at the top of the US agenda, and the Guardian reinforced the point earlier today with a story saying that Obama ordered up a list of potential overseas cyber-targets last year. It doesn't include specifics, but any such list would likely have plenty of Chinese targets. (The AP doesn't think the story is bombshell material—it notes that the White House released a declassified version of the president's directive in January.) As for the summit, the New York Times has the unusual detail that while Obama will be sleeping on site at the estate in Rancho Mirage, Xi and his officials will bunk at a nearby hotel, apparently worried about their rooms being bugged.