By Doina Chiacu

WASHINGTON (Reuters) - China's ambassador to the United States on Thursday played down the tense exchange this week in Beijing between Defense Secretary Chuck Hagel and his Chinese counterpart and praised the frank talk between the two countries.

Ambassador Cui Tiankai spoke after Hagel's meeting on Tuesday with Defense Minister Chang Wanquan, who called on the United States to restrain Japan and chided another U.S. ally, the Philippines.

"He had a very substantive and direct exchange with his Chinese counterpart," Tiankai said. "I think maybe this is not a bad thing. Maybe this is a good thing."

The Chinese ambassador stressed the importance of military-to-military contacts. "There will be more exchanges," he said in remarks at the nonprofit U.S. Institute of Peace.

Hagel's trip to China exposed tensions over its territorial disputes with regional U.S. allies, including the Philippines and Japan. China is at odds with Japan over uninhabited islets in the East China Sea that are administered by Tokyo. China claims most of the South China Sea. The Philippines, Malaysia, Vietnam, Brunei and Taiwan also claim parts of those waters.

Tiankai, who was China's ambassador to Japan in 2007-09, said there was no room for concessions on territorial integrity and urged "mutual respect" from Washington over its interests.

"Our relations with Japan are much longer than your relations with Japan," Tiankai gently chided moderator Stephen Hadley, national security adviser to former President George W. Bush.

Similarly, the ambassador deflected questions about China's troubled relations with some of its other neighbors: "We have so many neighbors. You only have two."

The U.S. State Department has accused China's coast guard of harassing Philippine vessels in the South China Sea.

China's increasingly tough stance in the territorial disputes, along with its huge military buildup, will shadow U.S. President Barack Obama when he visits Asia this month.

The ambassador borrowed a 2008 campaign slogan from Obama, saying he hoped Americans would be optimistic about relations with China "and say again, 'Yes, we can.'"

(Reporting by Doina Chiacu; Editing by Dan Grebler)