By Matt Spetalnick and Jeff Mason
WASHINGTON (Reuters) - Chinese President Xi Jinping arrived in Washington on Thursday for a state visit and talks with President Barack Obama expected to be clouded by differences over alleged Chinese cyber spying, Beijing's economic policies and territorial disputes in the South China Sea.
Vice President Joe Biden led the welcoming delegation as Xi's plane touched down at Andrews Air Force Base on the second leg of a weeklong trip that began in Seattle, where the Chinese leader sought to reassure U.S. companies that he is working to create a more favorable Chinese investment climate.
Xi arrived soon after Pope Francis flew out of the U.S. capital after a visit that drew adoring crowds wherever he went.
Though the White House quickly switched Chinese flags for the Vatican banners flying in front of the presidential mansion and prepared to roll out the red carpet for Xi, the leader of the world's second biggest economy can expect only a fraction of the wall-to-wall U.S. news coverage showered upon the popular pontiff.
Obama planned to host Xi later on Thursday for a private working dinner, where White House aides said they would begin grappling with the main issues that divide their countries.
Xi will be treated to full honors on Friday, including a 21-gun salute, a formal summit, a joint news conference and a black-tie state dinner.
No policy breakthroughs are likely during Xi's U.S. trip, but the two sides are expected to announce several more modest achievements. Those could include building on the countries' climate change commitments, progress toward a bilateral investment treatment and new rules to lower the risk of aerial confrontations in the Asia-Pacific region.
CYBER SECURITY CAUSING MAJOR FRICTION
High on the agenda is cyber security. Washington is considering sanctions against Chinese companies and individuals it accuses of stealing U.S. trade secrets.
Responding to U.S. allegations that China has been behind cyber attacks affecting American business and government databases, Xi insisted during his visit to Seattle that the Communist government in Beijing did not support such activities and pledged to work with the United States to fight cyber crime.
"We put more stock in their actions than their words." White House spokesman Josh Earnest told reporters on Thursday.
While Obama's aides say no formal cyber security agreement is likely, China's top Internet regulator suggested in a closed-door session with U.S. executives in Seattle this week that a basic deal against cyber warfare was possible, according to one person present.
Obama is also expected to press Xi to follow through on economic reforms and refrain from discrimination against U.S. companies operating in China. Some analysts believe Obama has more leverage due to China's slowing economic growth, which has destabilized global markets and raised doubts about Xi’s economic stewardship.
At the same time, the Obama administration is still at a loss on how to curb China's assertiveness in the South China Sea, where in waters that Beijing disputes with its neighbors it has continued land reclamation for potential military use.
Calls for Obama to take a harder line with China have echoed from Congress to the 2016 Republican presidential campaign. But his approach will be tempered because the world's two biggest economies are inextricably bound together.
For his part, Xi, with nationalistic sentiment rising at home, can ill afford the appearance of making concessions.
Xi's meetings with Obama could also bolster the Chinese leader's stature at home, building on a high-profile military parade earlier this month to mark the 70th anniversary of the end of World War Two, while deflecting attention from China's economic problems.
As for whether the pope's visit had overshadowed Xi's, Earnest said: "I have not heard anybody raise that concern."
Xi's visit will draw protests outside the White House gates from human rights groups, Falun Gong supporters and "Free Tibet" demonstrators.
U.S. first lady Michelle Obama will take Xi's wife, Peng Liyuan, to the National Zoo on Friday for a look at the giant pandas, possibly including a cub born last month.
(Additional reporting by Roberta Rampton, David Brunnstrom and Idrees Ali in Washington and Michael Martina in Seattle; Writing by Matt Spetalnick; Editing by Frances Kerry)