In talks with Defence Minister Cao Gangchuan to kick off his two-day China trip, US Defence Secretary Robert Gates also sought to persuade Beijing to back tougher economic sanctions against Iran over its nuclear programme.

Both said they had agreed to expand educational exchanges and military cooperation, including plans for a joint naval exercise "at a proper time" and a direct telephone link between the US and Chinese defence establishments.

Cao described the talks as "pragmatic and productive."

Gates also pointed to constructive dialogue but emphasised the need for greater clarity on the part of the Chinese about a rapid military build-up that US officials believe is altering the balance of power in the region.

"I raised with Minister Cao the uncertainty over China's military modernisation, and the need for greater transparency to allay international concerns," Gates said at a joint news conference.

"China's increasing political and economic stature calls for this country to take on a greater share of responsibility for the health and success of the international system."

Nevertheless, Gates said there was common ground on how the two nations' militaries could work more closely.

"We discussed the value of deeper dialogue on our respective strategic modernisation programmes, and the importance of discussing in greater depth and greater detail nuclear policy, strategy and programmes on both sides," he said.

"This is part of the agreement to deepen the dialogue we've had. I believe that this will provide the opportunity at least for us to address the issues of transparency that we've discussed in the past."

The underlying US aim in seeking such a dialogue is to avoid a miscalculation between the two nuclear powers, a senior US defence official said.

China has stated that its annual military budget rose 17.8 percent this year to 45 billion dollars. But the Pentagon believes China's military spending is as high as 125 billion dollars a year.

Among the other concerns, Gates said, was a Chinese anti-satellite test in January that sounded alarm bells about Beijing's intentions.

"With respect to the anti-satellite test, I raised our concerns about it and there was no further discussion," Gates said.

Senior US defence officials travelling with Gates had said they were hoping to learn more from China about its reasons for the shooting down of one of its own weather satellites with a ballistic missile.

Cao confirmed the agreement with Gates on the telephone "hotline", which he said state leaders also had agreed to "in principle."

It would be China's first such direct telephone link with another country.

Cao also said the two sides had agreed to give young Chinese and US officers and cadets more opportunities to have contact with each other through educational exchanges.

In another positive development, China agreed to increase access to its military archives for US teams seeking to account for US soldiers missing in action and prisoners of war from the conflicts in Korea and Vietnam.

Gates said his talks with Cao had created "significant opportunities to expand our military-to-military contacts and relationships in a spirit of candour and honest discussion of the issues on which we are agreed as well as those on which we have disagreement."

On the thorny issue of Iran, Gates said he and Cao had discussed the importance of ensuring Tehran did not develop nuclear weapons.

"We agreed it was important to pursue efforts to persuade the Iranian government to change their behaviour and their policy peacefully through diplomatic means," Gates said.

But while Gates said he had emphasised the importance of "increased economic pressure," there was no indication from China that it would reconsider its opposition to tougher sanctions.

"No positions were changed," said a senior US defence official. "But the quality of the discussions on Iran, which were a significant part of every meeting... and the increased understanding, I thought was quite good."

"They said, 'We prefer dialogue,'" the official said.

Gates is scheduled to meet with President Hu Jintao on Tuesday before heading to South Korea and Japan on his week-long Asia tour.

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