President Hu Jintao has acknowledged that China still has to do a lot more in human rights.
At a news conference at the White House with President Barack Obama on Wednesday, Mr Hu said his country is willing to engage in dialogue on the issue.
Mr Hu said China had made enormous progress on human rights, but not enough.
"China still faces many challenges in economic and social development and a lot still needs to be done in China in terms of human rights," he said.
The ABC reports Mr Obama trod carefully on the issue, saying the two countries came from very different cultures and with very different histories.
"I have been very candid with President Hu about these issues. Occasionally, they are a source of tension between our two governments," he said.
"We can engage and discuss these issues in a frank and candid way, focus on those areas where we agree while acknowledging there are going to be areas where we disagree."
Trade talks main focus
Mr Obama says his main focus in talks Mr Hu is trade and the Chinese currency remains undervalued.
"There needs to be further adjustment in the exchange rate, so we'll continue to look for the value of China's currency to be increasingly driven by the market, which will help ensure that no nation has an undue economic advantage," he said.
"My hope and expectation is that President Hu's resolve will lead to a fully market-based currency programme that will allow more effective trade between our two countries."
For his part, Mr Hu said the relationship between the two powers should be based on "mutual trust" with each country recognising the other's core interests.
"We live in an increasingly diverse and colourful world," he said.
"China and the US should respect each other's choice of development path and each other's core interests.
"We should deepen mutual understanding through communication increase, mutual trust through dialogue, and expand common ground through exchanges."
