Obama made the remarks during his joint press conference with Australian Prime Minister Tony Abbott after the two leaders held talks at Oval Office of the White House.
"We both agree that it's important to continue to see China prosper and rise, but what's also important is that as China emerges as this great world power, that it also is helping to reinforce and abide by basic international law and norms," Obama said.
Both the United States and Australia have enormous trade relationships with China, Obama noted.
The two leaders, Obama said, discussed a wide range of issues.
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"Many of them focused on the importance of the Asia-Pacific region. We discussed the security cooperation that is continuing to deepen between our two nations as treaty allies," Obama said.
"I should note that Australia, under the prime minister's leadership, is increasing its defense budget, even under tough times, recognising that we all have to make sure that we're doing our fair share to help maintain global order and security," he said.
"Both of us have been very invested in trying to bring the Trans-Pacific Partnership, the TPP, to a successful outcome. Negotiations continue, but Australia has been a very constructive partner in that process," Obama said.