Cybertheft and island-building stoke US-China tensions ahead of high-level talks in Washington

Economic Indicators Associated Press

Tensions between the U.S. and China are growing over its island-building in the South China Sea and suspicions that Beijing was behind a massive hack that stole the personal information of millions of federal employees and contractors.

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But both powers have incentives to calm the waters ahead of the Chinese leader's visit to Washington in the fall.

The two countries' top diplomats and finance officials meet here next week for the annual U.S.-China strategic and economic dialogue. The Obama administration says they won't ignore the problems, but officials are expected to emphasize areas of cooperation, like climate change.

Civilian and military officials will meet Monday on thorny security issues, before Secretary of State John Kerry and Treasury Secretary Jacob Lew begin talks Tuesday with their Chinese counterparts.