President Obama, coming out of a meeting with Chinese President Xi Jinping where the country's suspected hacking was expected to factor heavily, announced Friday the two nations have reached a preliminary agreement on cyber-theft -- and said he indicated to Xi that the cyber-threat "has to stop."
Speaking in the Rose Garden alongside the Chinese leader, Obama said he raised with his Chinese counterpart the United States' "very serious concerns about growing cyber threats to American corporations and American citizens."
He added, "I indicated that it has to stop."
Obama said the two leaders have, to that end, agreed that neither government "will conduct or knowingly support the cyber-enabled theft of intellectual property, including trade secrets or other confidential business information for commercial advantage."
As for the possibility of sanctions, against either individuals, businesses or state-run companies, he said: "We will apply those, and whatever other tools we have in our tool kit, to go after cybercriminals either retrospectively or prospectively."
The cyber issue and others have hung over the state visit. Against the backdrop of grand pageantry, Obama earlier prodded Xi on Friday to "candidly" address deep differences on cyberespionage, China's territorial disputes, and human rights -- issues that have threatened ties between the world's two largest economies.
Xi, speaking earlier through a translator, called on the U.S. and China to be "broadminded about differences and disagreements."
The White House's concerns over China's cyberattacks in the U.S. have caused particular strain ahead of Xi's visit. Obama has faced calls from some Republican presidential candidates to scale back the grandeur of Xi's visit, which includes an Oval Office meeting, a joint news conference in the Rose Garden and a glitzy black-tie dinner.
In a statement Friday, the White House said the two countries specifically agreed to what it described as a "high-level joint dialogue mechanism on fighting cybercrime and related issues."
This would include China designating an official to participate in the dialogue, which also would include FBI, U.S. intelligence and other representatives. "This mechanism will be used to review the timeliness and quality of responses to requests for information and assistance with respect to malicious cyber activity of concern identified by either side," the White House said. "As part of this mechanism, both sides agree to establish a hotline for the escalation of issues that may arise in the course of responding to such requests."
The first meeting would be held "by the end of 2015."
Obama said "this is progress," but "our work is not yet done."
Both countries were seeking to emphasize areas where they do agree, most notably on climate change. On the eve of the state visit, U.S. officials said the leaders would release a joint statement on climate change fleshing out how they plan to achieve targets for cutting carbon emissions set at a bilateral summit in Beijing last year.
In recent weeks, however, U.S. officials have been taking a tougher line publicly against China's hacking, saying it is reaching epidemic levels. Officials have warned of retaliatory sanctions on businesses and individuals.
"This is not just a matter of us being mildly upset, but is something that will put significant strains on a bilateral relationship if not resolved, and that we are prepared to take some countervailing actions," Obama said this month.
Obama administration officials say China is getting the message. After National Security Adviser Susan Rice sharply warned Beijing about its actions during a visit to lay the groundwork for Xi's trip, China dispatched its top domestic security official to Washington to try to stave off sanctions ahead of the president's arrival.
China has denied being behind cyberspying in the U.S. and says that it, too, is a victim of such espionage.
Obama and Xi were also expected to discuss China's disputed territorial claims, which have unnerved some U.S. partners in Asia. The U.S. is particularly concerned about China's building of artificial islands with military facilities in the South China Sea.
The Associated Press contributed to this report.