Washington  - US Secretary of State Hillary Rodham Clinton and Chinese Foreign Minister Yang Jiechi held talks on the flagging global economy Wednesday, just days after the United States accused China of harassing one of its naval vessels in the South China Sea.

Clinton called it a productive meeting that brushed on economics, climate change, North Korea and Iran's nuclear programmes, Afghanistan, Darfur, as well as US concerns about China's human rights record.

Yang said the two ministers were laying the groundwork for a Group of 20 (G20) summit in London next month to stem the global economic slide.

Yang also said he was "very glad" the Washington meeting came less than a month after Clinton's trip to Asia - her first overseas visit as the US chief diplomat - which was viewed as a sign of the increased attention President Barack Obama is paying to China and the wider continent.

Obama and Yang will meet on Thursday, White House spokesman Robert Gibbs said.

Clinton and Yang also agreed to avoid future naval confrontations but had not pulled back from their positions, Clinton said.

The US Defence Department said five Chinese ships on Sunday manoeuvred dangerously close to a US naval vessel sailing in international waters, one of several aggressive acts recently by the Chinese Navy. China said the US vessel was in China's waters at the time of the encounter.

"We must work hard in the future to avoid such incidents, and to avoid this particular incident having consequences that are unforeseen." Clinton said. "I appreciate the agreement that Minister Yang and I hold on this matter."

The relationship between the United States and China - the world's largest and third-largest economies respectively - is regarded as key to stabilizing the global economy, which the World Bank predicts will contract this year for the first time since World War II.

"There is no doubt that world events have given the United States and China a full and formidable agenda," Clinton told reporters after the meeting.

She said the US-China relationship was "important for the future peace, progress and prosperity not only for both of our countries, but indeed for the entire world."

Yang also met with US Treasury Secretary Timothy Geithner, who will join other G20 finance ministers later this week in London to prepare for the April leaders' summit. dpa