US President Barack Obama and Chinese President Xi Jinping head for their bilateral meeting at the Annenberg Retreat at Sunnylands in Rancho Mirage, California, on June 7, 2013. Ditching the crushing formality of US-China summits, Xi and Obama met in Rancho Mirage, California, a playground of past presidents and the powerful. Allegations of Chinese cyber hacking and espionage, North Korea's nuclear defiance and constant trade niggles between the world's two single largest economies and possible future superpower rivals will dominate the talks.

LOS ANGELES — President Obama and China's President Xi Jinping greeted each other with a warm handshake in the southern California desert on Friday evening, pledging a "new model of cooperation" between countries.

The two kicked off an informal but high-stakes summit at California's Sunnylands estate for their first in-person meeting since Xi took office in March.

Obama and Xi ditched the ties as they sweated it out in tempatures topping 100 degrees for their "shirt-sleeves summit" at the sprawling resort built by late billionaires Lenore and Walter Annenberg.

The two met for three hours of talks on Friday evening followed by a long private dinner. The talks will continue on Saturday morning.

The two presidents have a long list of thorny issues to discuss but kept the start of their summit friendly and informal.

Referencing the unusual location of the 200-acre desert estate, Obama said he hoped for "more extended" talks that will lead to a "new model of cooperation" between countries.

"We're going to have a healthy economic competition, but we also have a whole range of challenges on which we have to cooperate, from...North Korea's nuclear and missile programs -- to proliferation, to issues like climate change," Obama said.

Xi said he hoped the meeting would bring momentum into the US-China relationship.

"Together we can build a new model for major country relationships," Xi said.

More from GlobalPost: Obama, Xi Jinping meeting: 5 pressure points

Obama said he planned to raise a range of issues at the summit including North Korea's missile program, nuclear proliferation, climate change, cyber security, trade, human rights but also emphasized that the US is not trying to undermine China's growth.

"This will give me an opportunity to reiterate how the United States welcomes the continuing peaceful rise of China as world power and that in fact it is in the United States' interest that China continues on the path of success," Obama said, during brief remarks to the press on Friday.

Obama plans to press Xi about suspected Chinese hacking of American businesses even as the US government is under fire for increasing government surveillance at home.

Obama defended the NSA's Internet and telephone surveillance program as striking the right balance between safety and privacy.

"You can’t have 100 percent security and also then have 100 percent privacy and zero inconvenience," he said on Friday before his meeting with Xi. "We’re going to have to make some choices as a society."

The news may make Xi less anxious to address accusations of Chinese hacking of American interests.

China denied a report this week that alleged that Chinese hackers had accessed designs for US weapons systems like the F-35 Joint Strike Fighter.

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