Rice was speaking at a news conference here after meeting Australian Foreign Minister Alexander Downer and ahead of a new trilateral security dialogue with Japan on Saturday at which China's growing might is top of the agenda.

"We've said we have concerns about the Chinese military build-up. We've told the Chinese that they need to be transparent about what their military build up means," Rice said.

"I heard there's going to be a 14 percent increase in the Chinese defence budget -- that's a lot -- and China should undertake to be transparent about what that means."

The United States wanted to see China "as it grows in importance and influence, responsible in international affairs, more open, both towards its own people and towards the international system," Rice said.

Washington recognised that China "is going to be, and is, influential in international politics and has every desire to see that influence be positive".

The US believed the growth of the Chinese economy, "if it is done in a rules-based way in which China is fully obeying the rules of the global economy, is a very positive development for international growth and for the United States".

But "there is no doubt that as with any complex relationship there are difficult issues as well as positive elements," she said.

Downer played down suggestions that Saturday's trilateral security dialogue with Japan could lead to a policy of containment of China.

"We've never had a concern the US is pursuing a policy of containment. We feel comfortable with where the US is with its relationship with China," he said.

Australia's own relationship with Beijing was "good and constructive", said Downer, who on Wednesday said any attempt at a policy of containment would be "a very big mistake".

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