Hu and US President Barack Obama will be at pains to put a positive spin on the complex relationship between their countries when they hold talks in Washington at a small dinner on Tuesday and again on Wednesday.

But there will be many contentious issues on the table.

Gripes over the value of the yuan, trade disputes, US arms sales to Taiwan, the Dalai Lama's US visit, the award of the Nobel Peace Prize to Chinese dissident Liu Xiaobo, Internet freedom and naval rivalries in the Pacific, have dogged relations.

Even if both sides "share the view that they have more interest in cooperation than open hostilities", according to Jia Qingguo, a US expert at Peking University, the shift in the power balance has complicated matters.

"China's sheer weight has grown to the point Beijing now has greater capacity to resist American policies" and "is growing more assertive on security issues", the Eurasia Group said.

Aware of the diplomatic pitfalls ahead, the US and China have painstakingly prepared Hu's state visit, his first since Obama took office in 2009.

The January 18-21 trip will include a state dinner at the White House on Wednesday evening, talks with US lawmakers and a stop in the midwestern city of Chicago.

Senior officials have shuttled between the two capitals including US Defense Secretary Robert Gates, who travelled to China last week to restore military ties suspended one year ago by Beijing.

China meanwhile has again pledged to allow more flexibility in the yuan exchange rate -- a key issue for US lawmakers -- and made moves aimed at making it a global currency.

But the pomp and circumstance that will meet Hu is unlikely to mask nagging problems.

Last week, US Treasury Secretary Timothy Geithner warned China's yuan policy is not "tenable", and US Secretary of State Hillary Clinton pressed Beijing on human rights.

Gates was meanwhile greeted by the maiden flight of China's first stealth fighter jet -- a sign of the increasingly sophisticated capability of Beijing's military.

"Tangible achievements will be limited to clean energy initiatives and high-profile commercial deals, but broader underlying sources of friction will persist," the Eurasia Group predicted.

For Russell Leigh Moses, a Beijing-based political analyst, "the state of relations is not entirely sound on both sides, and both sides are clearly interested in making sure it doesn't spiral further down".

After the promise of Obama's visit to China in November 2009, during which the US leader said Sino-US cooperation had "never been more important to our collective future", relations began to deteriorate.

China emerged from the global financial crisis in strong form, overtaking Japan as the world's number two economy in 2010 and seeing its diplomatic, economic and military clout soar. It now holds more than $900 billion worth of US debt.

Obama meanwhile faced a tough year at home and abroad, seeing his Democratic Party losing control of the US House of Representatives in bruising November midterm elections.

That combination fuelled the Sino-US rivalry on several fronts, and sent relations into a tailspin.

Analysts said that Hu and Obama will seek to focus on areas where relations remain solid.

"Reform of the international financial system is one of the subjects on which there could be consensus," Jean-Pierre Cabestan, a professor of political science at Hong Kong Baptist University, told AFP.

"The Group of 20, economic cooperation and their intertwined investments could also be areas of consensus," he said, adding that Washington "would definitely like to see more Chinese investments".

North Korea could offer the two sides an opportunity to tout their cooperation, according to Shi Yinhong, a professor of international relations at Renmin University in Beijing.

Beijing is Pyongyang's main ally, and appeared to have stepped in to calm tensions after the North's deadly shelling of a South Korean island in November, which had raised the spectre of war.

"The crisis on the Korean peninsula will be the most important subject addressed at the talks. They will seek to kickstart the six-party talks (on the North's denuclearisation) as soon as possible," Shi told AFP.

Policymakers in Washington will also be looking for signs of the looming power transition in Beijing, with Hu expected to bow out in 2013.

"Part of this trip is also about what the United States can expect of the Chinese leadership, whether we'll have a departure when Hu leaves or whether we'll have a continuation," Moses said.

"I think there will be hints dropped."

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