BEIJING - China's defense chief Liang Guanglie on Tuesday expressed the hope to peacefully resolve the Diaoyu Islands issue with Japan, but said China "reserves the right to take further actions."

"We reserve the right to take further actions, although we hope to settle the issue through peaceful negotiation," Liang told reporters after his talks with US Defense Secretary Leon Panetta on Tuesday.

Panetta arrived in Beijing Monday evening for his first visit to China as the Pentagon chief.