"China is clearly a rising influence - I mean, there is no doubt about that - economically, politically, in terms of its sort of global interests," US Secretary of State Condoleezza Rice [Images] said.

"But it has to be managed a couple of ways. First of all, it's very important to be clear about American policies and American interests in the region and that means being very clear about policy, for instance, on Taiwan, where we've had and continue to have a 'one China' policy where we are the kind of upright anchor.

No threat to US, says China

"Where we don't expect either side to try to exploit the situation or to provoke the other side, where we've been very clear to the Chinese that we have obligations under the Taiwan Relations Act," she told The Washington Times and Sunday talk shows on television networks.

"And therefore, when I went to China, I said, you know, the arms sales are a matter of record and we've already agreed to do that. You know, we'll see when Taiwan is capable of actually paying for them, but we are, in fact -- I've said that clearly. So the first thing is to be clear about what our policy is.

US foreign policy outdated, irrational'

"The second is to be active in making certain that our alliances in the region are as strong as possible. That means with South Korea and I think we've actually strengthened that alliance by what Don Rumsfeld and his folks worked out... I think that alliance is in better shape now than it's been in a long - may be ever," Rice said.

"The third is that you have to recognize that China is going to be an influence and so to try to steer that influence into positive directions, not negative ones.

Huge hike in China defence budget

"We were proponents of Chinese accession to the WTO because in a rules-based system it's better to have a big economy in a rules-based system than not. But that means on something like intellectual property rights, that my now-Deputy, but then-USTR, Bob Zoellick, was just constant about the problem that the Chinese were causing on intellectual property rights.

"The President is determined to have a level playing field. But it's a positive place for China to exercise influence through the WTO. When we go to regional fora we're pretty clear that regional fora that ought to be held are ones in which we are also an actor, not just China.

"So we have a lot of levers to deal with this and, of course, the American military is going to keep modernizing so that the Chinese should never get the idea that they're going to be able to have a unilateral advantage somehow in the Asia-Pacific region,"  she said.