"If you look at the east Asia of twenty or thirty years ago you would not have expected to see a China that is opening to the world in the way that it is," Rice told delegates at the World Economic Forum by a video link.

China's surging economy -- it has become the world's fourth largest after reporting near double-digit growth last year -- has been a major theme of the annual gathering of political and business leaders in Davos, Switzerland.

But Rice said China also had an obligation as a rapidly expanding economy that was having such a huge impact around the world.

"When it was envisaged that China would become a member of the World Trade Organisation it was because it was believed it was important to embed China in a rules-based system for an economy, an open and free trading economy.

"And China has an obligation as one of the largest economies now to live up to those rules."

She said it was why Washington was concerned about Beijing's commitment to enforce intellectual property rights. "China should not be a country that closes its markets to financial services or to software products from around the world."

"I do think that China's beginning to understand those obligations, we've seen signs of that, but it is still a country that is very much in transition," she added.

"We have had extensive conversations with the Chinese about the relationship of their growing economy (and) the increasing prosperity of their people and the desire for a more open political system.

"It's really very hard to tell people to think at work but not at home. When you want creative people they have to have a sense they are going to be able to defend their interests in a political system," Rice said.

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