President Xi Jinping said China and the U.S. needed to trust each other more as both sides sought to minimize tensions over the South China Sea at the opening Monday, June 6 of key annual talks in Beijing, AFP reports.

China claims nearly all of the strategically vital sea despite competing claims by several Southeast Asian neighbors, and has rapidly built artificial islands suitable for military use.

Washington has responded by sending warships close to Chinese claimed reefs, angering Beijing.

"China and the U.S. need to increase mutual trust," Xi said at the opening of the annual strategic dialogue, calling for redoubling of efforts for the two powers to manage conflicts and avoid "strategic misjudgement".

"Some disputes may not be resolved for the time being," he said, but both sides should take a "pragmatic and constructive" attitude towards those issues.

"The vast Pacific should be a stage for cooperation, not an area for competition," he said, according to AFP.

Speaking for the U.S., Secretary of State John Kerry called for a "diplomatic solution" to the problem.

"We are looking for a peaceful resolution to the dispute in the South China Sea and oppose any country resolving claims through unilateral action", he said, referring to China's increasingly aggressive expansion in the area.

The Philippines, Brunei, Malaysia and Vietnam have competing claims in the South China Sea, which encompasses vital global shipping routes and is believed to have significant oil and gas deposits.