A much anticipated meeting is underway on the sidelines of the G20. The leaders of the world's two biggest economies -- currently embroiled in a trade war -- are holding a one-on-one for the first time in nearly seven months.
US President Donald Trump and Chinese President Xi Jinping are holding talks in Osaka.
At the onset of the meeting, Trump said, "We've had an excellent relationship, but we want to do something that will even it up with respect to trade."
Chinese President Xi Jinping said cooperation and dialogue are better than competition and friction.
He opened his brief comments with a reference to the US-China relationship going back decades ago and expressed hope that that friendship would continue.
Negotiations for a trade deal unexpectedly broke down last month.
Washington accused Beijing of backtracking on promises reportedly written in an initial 150-page draft agreement.
So the US raised tariffs on billions of dollars' worth of Chinese products -- prompting China to retaliate.
US and Chinese officials resumed ministerial-level talks just days ago.
But they remain divided over some key issues including China's subsidies to state-owned companies and when to remove the hiked tariffs.
Trump has threatened to broaden the tariffs to cover almost all Chinese imports if the meeting doesn't produce satisfactory results.
Beijing has hinted at limiting exports of rare earth metals, a crucial material for US industries.
Observers around the world are anxiously waiting to see how the meeting unfolds. Further escalation wouldn't just impact the US and Chinese economies but could have wide-ranging consequences for the global economy and international trade.
Other expected topics include the pro-democracy protests in Hong Kong. The US side has said it would raise the issue, but China has made it clear the matter is an internal affair.
The leaders may also discuss Xi's recent visit to North Korea in light of Trump's latest offer to meet with Kim Jong Un at the demilitarized zone when he visits South Korea this weekend.