RANCHO MIRAGE  (AP) — Opening a two-day summit, President Barack Obama drew attention to contentious economic and cybersecurity issues Friday night as he warmly received Chinese President Xi Jinping to a California desert estate for high-stakes talks.

Under a shaded walkway as temperatures surged above 100 degrees, the two leaders — in white shirts and suit coats but no ties — greeted each other and walked side by side to start their first in-person meetings since Xi took office in March.

"Our decision to meet so early (in Xi's term) signifies the importance of the U.S.-China relationship," Obama said. He noted the unusual setting and said he hoped for "more extended" and informal talks that will lead to a "new model of cooperation" between countries.

Previewing their talks, Obama said the United States is seeking an "economic order where nations are playing by the same rules and where the United States and China work together on issues like cybersecurity." Obama said he would also stress the importance of human rights, another sensitive issue with the Chinese.

For his part, Xi did not mention cybersecurity, human rights or North Korea, another area of potential tensions between the two powers.

Speaking through a translator, Xi said both leaders were "meeting today to chart the future of U.S.-china relations." He added that the world has "reaped huge benefits" for the relationship between both countries.

U.S. manufacturers have long contended that China is manipulating its currency to gain a trade advantage. The U.S. trade deficit with China is the largest with any single nation. The U.S. government, however, has declined to label China a currency manipulator in an effort to narrow the trade deficit through negotiation rather than confrontation.

On the issue of cybersecurity, the U.S. has started bringing its complaints about persistent Chinese computer-hacking into the open after years of quiet and largely unsuccessful diplomacy. It has accused Beijing's government and military of computer-based attacks against America. While there have been no actual admissions of guilt, Chinese leaders have started acknowledging there is a problem and U.S. officials say the Chinese seem more open to working with the U.S. to address it.

But China has asserted they, too, are often the victim of cyberattacks, including those that could be emanating from the U.S. — a line of argument that could be emboldened by new revelations that the U.S. extensively scours the Internet usage of foreign nationals overseas.

The two leaders were meeting at the 200-acre Sunnylands estate just outside Palm Springs, Calif. They were to take questions from reporters Friday evening after a bilateral meeting, then hold a working dinner Friday night and additional talks Saturday morning.

Obama, seated next to Secretary of State John Kerry, said the U.S. welcomes the rise of a peaceful China and seeks "economic order where nations are playing by the same rules." He called for the U.S. and China to work together to address cybersecurity.

"Inevitably there are areas of tension between our countries," Obama said, adding that it's in the interest of both countries to work together.

However, Obama's urging of Xi to stop reported Chinese hacking against the U.S. could be overshadowed by new revelations that Obama's own administration has been secretly collecting information about phone and Internet use. The actions of both China and the U.S. underscore the vast technological powers that governments can tap to gather information covertly from individuals, companies and other governments.

Obama, seeking to keep the matter from trailing him through two days of China meetings, addressed the surveillance programs for the first time Friday morning. He said the efforts strike "the right balance" between security and civil liberties as the U.S. combats terrorism.

"You can't have 100 percent security and then also have 100 percent privacy and zero inconvenience. We're going to have to make some choices as a society," he said during a health care event in Northern California.

Obama arrived late in the day at the Sunnylands estate on the edge of the Mojave desert. Xi arrived in California Thursday following a trip to Latin America, a region where China is seeking to expand its trade and influence.

Obama told donors at a Democratic fundraiser Thursday that he understands the concerns many Americans have about the potential threat China's rapid rise poses to the U.S.

"The transformation that's taking place in China is extraordinary. And never in the history of humanity have we seen so many people move out of poverty so rapidly," he said. "And yet, when you look at the challenges they face and you look at the challenges we face, I'll take our challenges any day of the week."

U.S. officials see Xi, who took office in March, as a potentially new kind of Chinese leader. He has deeper ties to the U.S. than many of his predecessors and appears more comfortable in public than the last president, Hu Jintao, with whom Obama never developed a strong personal rapport.

Already the White House is encouraged that Xi agreed to the unusual California summit. The talks will be void of the formal pageantry that Chinese leaders often expect during state visits at the White House.

For the U.S., the most pressing matter is China's alleged cyberspying on the American government and on businesses. Obama is expected to warn Xi against continuing such practices, which China publicly denies.

Ahead of the summit, a bipartisan group of lawmakers on Capitol Hill began pushing legislation that would punish countries that launch cyberattacks against the U.S. The bill would authorize the administration to draw up a list of cyberspies, and allow the U.S. to deny or revoke visas to foreign agents guilty of cybercrimes.

Obama will also be looking to build on Xi's apparent impatience with North Korea's nuclear provocations. The U.S. has welcomed Xi's recent calls for North Korea to return to nuclear talks, though it's unclear whether Pyongyang is ready to change its behavior.

Xi is likely to press China's claims of business discrimination in U.S. markets and to express concern over Obama's efforts to expand U.S. influence in the Asia-Pacific region, which China sees as an attempt to contain its growing power.

Obama and Xi first met before the Chinese leader took office in March. They weren't slated to meet again until September, on the margins of an international economic summit in Russia, but both countries saw a need to move up their first meeting of the year, given the myriad issues that define their relationship.

The China summit kicks off a heavy foreign policy-focused stretch for Obama that includes trips to Europe and Africa later this month. It also comes as the White House grapples not only with the NSA disclosure, but also with controversies over the Internal Revenue Service's targeting of conservative political groups, the Justice Department's seizure of phone records from Associated Press journalists and the continuing investigation into the attack on Americans in Benghazi, Libya.

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