JAKARTA/WASHINGTON (Reuters) -- U.S. Secretary of State Antony Blinken held "candid and constructive" talks with top Chinese diplomat Wang Yi on Thursday in Indonesia's capital, an official said, the latest in a series of interactions Washington says are aimed at managing competition between the rival superpowers.
In their second meeting in less than a month, Blinken raised alleged Chinese involvement in computer hacking a day after Microsoft said Chinese state-backed hackers had breached email accounts of U.S. government agencies, while Wang pushed back on what he called U.S. "interference" in China's affairs.
The "candid and constructive" discussions covered both areas of difference and potential cooperation, State Department spokesperson Matthew Miller said in a statement.
"The meeting was part of ongoing efforts to maintain open channels of communication to clarify U.S. interests across a wide range of issues and to responsibly manage competition by reducing the risk of misperception and miscalculation," Miller said.
The top U.S. diplomat also emphasized the importance of maintaining peace and stability across the Taiwan Strait, Miller said.
Wang told Blinken the key to bringing the relationship "back on the right track" was taking practical actions, and said the United States should "adopt a rational and pragmatic attitude [and] meet China halfway," China's Foreign Ministry said.
"The United States must refrain from wantonly interfering in China's internal affairs, refrain from compromising China's sovereignty and territorial integrity, stop suppressing China's economy, trade and technology, and lift illegal and unreasonable sanctions against China," Wang was cited as saying.
Both sides said the two agreed to maintain communication.
Blinken met Wang in Beijing last month, marking the first visit to China by a U.S. secretary of state in five years. It was aimed at easing the intense rivalry between the superpowers, which are also the world's two largest economies.
U.S. Treasury Secretary Janet Yellen visited China earlier this month, and climate envoy John Kerry is to visit next week.
China's ambassador to the United States held a rare meeting at the Pentagon on Wednesday with the top U.S. defense official for Asia, the Pentagon said, in talks that followed American criticism of Chinese reluctance to engage in military communications.
Analysts see the meetings as part of efforts to clear the way for a summit between President Joe Biden and Chinese leader Xi Jinping later in the year, but tensions remain high.
While Washington is seeking to put a floor under relations, which Beijing has described as at their lowest point since the establishment of diplomatic ties, the two sides remain at odds over a range of trade, security and geopolitical issues.
Blinken and Wang in their previous meeting clashed over Taiwan, the democratic island that Beijing claims as its own.
On Thursday, Chinese fighter jets monitored a U.S. Navy patrol plane that flew through the sensitive Taiwan Strait, as China carried out military exercises to the south of the island.
China's Commerce Ministry also on Thursday renewed its call for the United States to lift "unilateral" sanctions against Chinese enterprises ahead of a possible visit by U.S. Commerce Secretary Gina Raimondo.
The meeting came a day after Microsoft said Chinese state-linked hackers secretly accessed email accounts of organizations, including government agencies. Raimondo was among those hacked, The Washington Post reported.
Washington has confirmed agencies' systems were breached, but has not attributed the hack to China.
Blinken made clear to Wang on Thursday that any action that targets the U.S. government, U.S. companies or American citizens "is of deep concern to us, and that we will take appropriate action to hold those responsible accountable," a senior State Department official said.
"I don't think it will rock the boat or sabotage the process," Yun Sun, director of the China program at the Stimson Center think tank, said of the hacking issue, "but it does suggest that the process is by no means smooth or trouble-free."
Bonnie Glaser, head of the Indo-Pacific Program at the German Marshall Fund of the United States, said the Biden administration was under pressure from Republicans in Congress for the meetings with Chinese officials to produce results.
"The tenuous progress could be set back by forthcoming developments such as the pending executive order on outbound investment to China, Taiwan's elections and the U.S. political calendar," Glaser said.
