This year, Xi and Obama agreed to hold a casual, informal, Two Nations Summitt at the US western retreet in California. The advertised purpose was for the two leaders to develope a personal relationship, so the two countries could better resolve issues.
In the two week run up up to the historic meeting, Obama repeatedly chastised China over what the US claimed was China's cyber spying to steal US business and military secrets. Obama even blasted China at the Asian meeting in Singapore..
This is the first time the Pentagon's annual report has directly linked such attacks to the Beijing government and military.
The Pentagon has accused China of sponsoring cyber-attacks on U.S government computers as part of a campaign of cyber-espionage.
This is the first time the Pentagon's annual report has directly linked such attacks to the Beijing government.
The annual Pentagon report claims that at least some attacks on US government and other computer systems appeared to be 'attributable directly' to the Chinese government and military.
It alleges China is using its cyber capabilities to collect intelligence against US diplomatic, economic and defence programs, and is developing the skills needed to conduct cyber-warfare.
The new wording in the report continues an escalating effort by US officials to call out the Chinese on the cyber-attacks and to press for a more open dialogue with Beijing on the problem.
The Pentagon report also criticises a 'lack of transparency' in China's military modernisation programme and defence spending.
The report from the US Department of Defense states: 'In 2012, numerous computer systems around the world, including those owned by the US government, continued to be targeted for intrusions, some of which appear to be attributable directly to the Chinese government and military.'
China has rebuffed the claims, with its Foreign Ministry repeating that it opposes cyber-attacks as well as 'all groundless accusations and hyping' that could harm prospects for cooperation.
'We are willing to hold even-tempered and constructive dialogue with the U.S.' about cybercrime, a spokesman said.
The issue was highlighted in February with the issuing of a report by cyber-security firm Mandiant that claimed to have traced several years of cyber-attacks against 140 mostly American companies to a Chinese military unit in Shanghai.
The firm identified the People's Liberation Army's Shanghai-based Unit 61398 as the most likely driving force behind the attacks.
It said says the office block is linked to stolen technology blueprints, manufacturing processes, clinical trial results, pricing documents, negotiation strategies and other secret data from more than 100 companies.
More alarmingly, it claimed the unit, known as the Comment Crew, also made incursions into the computer networks that control oil pipelines, power grids, water plants and other pieces of key state infrastructure.
But the US accusations backfire when Snowden releases top secret documents that proves that the US is the biggest cyber spy of all!
Today it is reported that China is requesting the US for an explanation.
Today, when asked if Snowden was a spy for China, Foreign Ministary spokeswoman Hua Chun Ying replied, "Thats complete nonsense!"