“I know the U.S. is still recovering from the financial crisis,” Chen said. “Under such circumstances, it is still spending a lot of money on its military and isn’t that placing too much pressure on the taxpayers?

“If the U.S. could reduce its military spending a bit and spend more on improving the livelihood of the American people ... wouldn’t that be a better scenario?” he said.

The visit by Mullen, chairman of the Joint Chiefs of Staff, is the first of its kind in four years. Mullen and Chen are trying to upgrade military-to-military ties after setbacks over U.S. arms sales to Taiwan, cyberattacks traced to China and concern about Beijing’s military plans.

Chen made a similar trip to the U.S. in May as part of efforts to improve often frosty relations between the militaries, especially as the economies of the countries become more codependent.

The two sides announced future exchanges, according to a statement released through the official Xinhua News Agency, with the commander of one of China’s seven military regions visiting the headquarters of the U.S. Pacific Command in Hawaii later this year, followed by a return visit by the head of the Pacific Command.

It said the two sides agreed to hold more meetings in the first half of next year.

The world’s two biggest economies frequently clash over financial issues, such as Beijing’s resistance to exchange rate reforms and the ballooning U.S. trade deficit with China. Such issues are not usually at the forefront of military talks, though both sides chide each other for their defense spending.

China’s military budget of $95 billion this year is the world’s second-highest after Washington’s planned $650 billion in defense spending.

Mullen acknowledged tough challenges to improving their military ties and called for more communication as well as “clearer and more pragmatic expectations.”

“We need to continue to work toward an understanding as these differences continue to be out there,” Mullen said. “That’s why it’s so important that we have a robust military-to-military relationship.”

Chen said China is more than two decades behind the U.S. in terms of military technology and Beijing needs to upgrade by adding new hardware such as aircraft carriers.

“China is a big country, and we have quite a number of ships, but these are only small ships and this is not commensurate with the status of a country like China,” he said. “Of course I hope that in future we will have aircraft carriers.”

Chen said a former Soviet-era aircraft carrier that China bought from Ukraine in 1998 was “a valuable thing” for China and it was being used for research and development purposes.