Edward Snowden case: US rebukes China
The US says it is "disappointed" over China's failure to hand over fugitive intelligence analyst Edward Snowden.
After talks with senior Chinese officials, US Deputy Secretary of State William Burns said Beijing's actions undermined "trust" in bilateral ties.
China said Hong Kong - which allowed Mr Snowden to leave for Russia - had acted in accordance with the territory's law.
Meanwhile, Microsoft has been accused of working with US intelligence bodies to help intercept users' data.
Citing the latest secret documents leaked by Mr Snowden, Britain's Guardian newspaper said the software giant had worked with the Federal Bureau of Investigation (FBI) and the National Security Agency (NSA) to facilitate access to information.
The newspaper claimed Microsoft allowed the NSA to circumvent its system of email encryption.
It also said information had been made available through access to cloud storage service SkyDrive and chat service Skype.
In response, the company said in a statement: "Microsoft does not provide any government with blanket or direct access to SkyDrive, Outlook.com, Skype or any Microsoft product."
It added that it had provided customer data only in response to lawful government requests.'Beyond reproach'
Mr Burns was speaking after the two-day talks with the Chinese officials on trade and cyber security in Washington.
"We were disappointed with how the authorities in Beijing and Hong Kong handled the Snowden case, which undermined our effort to build the trust needed to manage difficult issues," he said.
In response, Chinese state councillor Yang Jiechi said Hong Kong's actions were in accordance with its law.
"Its approach is beyond reproach," Mr Yang added.
The row over Mr Snowden has strained relations between the US and China.
Washington wants to prosecute the former CIA contractor over the leaking of thousands of classified US intelligence documents.
Mr Snowden is believed to be currently staying at a Moscow airport.
He has sent requests for political asylum to at least 21 countries, most of which have turned down his request.
However, Bolivia, Nicaragua and Venezuela have indicated they could take him in.