Washington: The US and China said they were committed to move more rapidly towards market-determined currency exchange rates and agreed on the need for enhanced dialogue between their militaries, in wide ranging discussions during Chinese Vice Premier Xi Jingping's visit here.
In a joint fact-sheet, the two countries also reaffirmed their G-20 commitment to enhance exchange rate flexibility to reflect underlying economic fundamentals, avoid persistent exchange rate misalignments, and refrain from competitive devaluation of currencies.
"We are determined to act on our commitments to exchange rate reform articulated in our Action plan for Growth and Jobs to address short term vulnerabilities and restoring financial stability and strengthen the medium-term foundations for growth," the fact sheet said.
"Our actions will help address the challenges created by developments in global liquidity and capital flows volatility," it said.
Currency exchange rate has been a major issue of contention between China and the US, which has been pushing Beijing to end the undervaluation of its currency Yuan and allow to take the market-determined rate.
In a wide ranging discussion, US Defence Secretary, Leon Panetta and Chinese Vice President Xi agreed that the militaries of the two countries need to discuss the specifics of a programme of future exchange, a Pentagon spokesman said.
"They agreed on the need for enhanced and substantive dialogue and communication to foster greater understanding and expand mutual trust," Pentagon Press Secretary, George Little, said after the meeting between Panetta and Xi.
The two sides affirmed that a healthy, stable, and reliable military-to-military relationship is an essential part of Presidents Barack Obama and Hu Jintao's shared vision for building a cooperative partnership, he said.
Xi urged both sides to maintain and strengthen practical exchanges and cooperation between the two militaries, and Panetta highlighted humanitarian assistance and counter piracy as productive areas for deepening cooperation, Little said.
Earlier the Defence Department accorded an unprecedented reception to the Chinese Vice President, soon to become the country's President, according him a traditional welcome with a 19-gun salute, and the playing of both National Anthems.
This is the first time the Pentagon has conferred this type of honour for a visiting Vice President.     

Welcoming the Chinese Vice President, Panetta said the US welcomes the rise of a prosperous and successful China that plays an active and responsible role in regional and global security affairs.

"We want to work with China to build an open, transparent and inclusive regional security order. To build a cooperative partnership, it is essential that we enhance mutual trust and understanding between our two military establishments," Panetta said.
"It is in the interests of both of our countries to work towards genuine strategic transparency and to build trust and cooperation on both sides.
"By forging these common bonds and by forging a stronger working relationship, I believe that the United States and China can work together for continued peace, stability and prosperity in the Asia-Pacific region," Panetta said.
To address challenges to the global economic outlook, the two sides pledged to enhance macroeconomic cooperation to ensure global recovery is durable and promotes job growth.
The two countries also committed to take comprehensive policy measures to achieve more balanced trade and expanded investment in each other's economies, said the fact sheet.
China wishes to increase imports from the United States, including in commercial high technology products.
According to the fact sheet, the US and China are committed to continuing to exchange views on developments in European financial markets and discuss approaches that can support Europe's own efforts to respond to its sovereign debt crisis.
"The two sides affirm that WTO rules should be strictly observed when initiating trade remedy investigations and imposing trade remedy measures, to prevent their abuse," the fact sheet statement said.
"China reiterates that technology transfer and technological cooperation shall be decided by businesses independently and will not be used by the Chinese government as a pre-condition for market access," it said.
On the other hand, the US said it continues to support hi-tech trade with China in commercial items for civil end users.
The US also promised increasing visa processing capacity in China by 40 percent in 2012, in order to ensure that 80 percent of non-immigrant visa applicants are interviewed within three weeks of receipt of application.
The US and China decided to hold two bilateral seminars to promote transparency and mutual understanding of each other's export credit agency programmes, it said.
China and the US commit to closer information sharing and cooperation to help ensure the smooth functioning of global commodity markets and to avoid excessive price volatility, it added.