There are grounds for optimism that progress in various sectors, including military ties and investment talks, will be made at a key Sino-US dialogue on Wednesday and Thursday, said a leading Chinese expert.

But while expressing optimism, Chen Dongxiao, president of the Shanghai Institutes for International Studies, said differences must be approached in a constructive, respectful manner. Chen made his comments on the eve of the sixth China-US Strategic and Economic Dialogue in Beijing.

The dialogue will be co-chaired by Vice-Premier Wang Yang and State Councilor Yang Jiechi, representatives of President Xi Jinping, as well as US Secretary of State John Kerry and Treasury Secretary Jacob Lew, who will represent US President Barack Obama.

The meeting, the second since Xi took office, follows a turbulent patch in relations caused by tension in the East and South China seas and by cyberspying.

According to Chen, however, bilateral exchanges in trade, investment, culture, and especially the military have "obviously" improved over the past year.

Beijing is keen to elevate military ties, Chen said, noting a flurry of military exchanges this year and China's first participation in the ongoing, US-organized Rim of the Pacific naval drill off Hawaii.

"We look forward to seeing both sides reach consensus on establishing mutual notification of major military activities and codes of behavior for military safety, both air and naval, in the Asia-Pacific during this year's dialogue," he said.

On the economic front, Chen said the China (Shanghai) Pilot Free Trade Zone launched in September and talks over the Bilateral Investment Treaty mapped out an "encouraging future" for the world's two largest economies in terms of cooperation and even competition.

China and the United States restarted the BIT talks last year to boost investment ties, which lag far behind their booming trade relations.

China wants the US to narrow the scope of its national security reviews of Chinese investment, while the US would like to see China keep the "negative list", which details sectors barring US investment, as short as possible.

Chen said the fundamental problem for the two countries is how the world's sole superpower and a rejuvenating power can build a stable relationship, and he said mutual respect will play a key role in this.

"As along as China sticks to a peaceful path and prioritizes reform and development, it does not need to reach national rejuvenation by challenging US leadership", said Chen.

"And as long as the US adheres to reviving its domestic economy and highlights its ‘soft power', instead of military intervention, on the international stage, it can maintain its leadership, which is not necessarily strengthened by confronting China,'' he added.

For instance, the US has to change its "hegemonic" mindset in the cybersphere, Chen said, urging Washington to resolve its cyber-related disputes with China through dialogue and work with China for global cybersecurity.

In May, the US said five Chinese military personnel were being charged with hacking computers of US companies, a unilateral move that ran against the cooperative spirit of the cyber working group under the Strategic & Economic Dialogue framework.

Washington did not say whether the bilateral cyber working group will meet at this year's S&ED after China announced it would suspend the group following the US indictments.