Barack Obama and Chinese president Xi Jinping opened a two-day summit at a California desert estate, aiming for closer personal ties as they took on high-stakes issues including cyber-security and North Korea's nuclear threats.
Under a shaded walkway as temperatures surged above 37.78 Celsius, the two leaders - in white shirts and jackets but no ties - greeted each other and walked side by side to start their first in-person meetings since Mr Xi took office in March.
"Our decision to meet so early (in Mr Xi's term) signifies the importance of the US-China relationship," Mr Obama said. The US president noted the unusual setting and said he hoped for "more extended" and informal talks that would lead to a "new model of co-operation" between countries.
Previewing their talks, Mr Obama said the United States was seeking an economic order "where nations are playing by the same rules, where trade is free and fair, and where the United States and China work together to address issues like cyber-security and the protection of intellectual property".
The two leaders were meeting at the 200-acre Sunnylands estate just outside Palm Springs, California. They were due to take questions from reporters after a bilateral meeting, then hold a working dinner and additional talks today.
Mr Obama, seated next to secretary of state John Kerry, said the US welcomed the rise of a peaceful China and seeks "economic order where nations are playing by the same rules". He called for the US and China to work together to address cyber-security.
"Inevitably there are areas of tension between our countries," Mr Obama said, adding that it was in the interest of both countries to work together.
However, Mr Obama's urging of Mr Xi to stop reported Chinese hacking against the US could be overshadowed by new revelations that his own administration has been secretly collecting information about phone and internet use.
The actions of both China and the US underscore the vast technological powers that governments can tap to gather information covertly from individuals, companies and other governments.
Mr 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 US combats terrorism.
"You can't have 100% security and then also have 100% 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.
Mr Obama arrived late in the day. Mr Xi arrived in California on Thursday following a trip to Latin America, a region where China is seeking to expand its trade and influence.
Mr Obama told donors at a Democratic fund-raiser on Thursday that he understands the concerns many Americans have about the potential threat China's rapid rise poses to the US.
"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."
US officials see Xi, who took office in March, as a potentially new kind of Chinese leader. He has deeper ties to the US than many of his predecessors and appears more comfortable in public than the last president, Hu Jintao, with whom Mr Obama never developed a strong personal rapport.
The White House is already encouraged that Mr Xi agreed to the unusual California summit. The talks will be minus the formal pageantry that Chinese leaders often expect during state visits at the White House.
For the US, the most pressing matter is China's alleged cyber-spying 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 politicians on Capitol Hill began pushing legislation that would punish countries that launch cyber-attacks against the US. The Bill would authorise the administration to draw up a list of cyber-spies, and allow the US to deny or revoke visas to foreign agents guilty of cyber-crimes.
Mr Obama will also be looking to build on Mr Xi's apparent impatience with North Korea's nuclear provocations. The US has welcomed Mr Xi's recent calls for North Korea to return to nuclear talks, though it's unclear whether Pyongyang is ready to change its behaviour.
Mr Xi is likely to press China's claims of business discrimination in US markets and to express concern over Mr Obama's efforts to expand US influence in the Asia-Pacific region, which China sees as an attempt to contain its growing power.