Susan Rice was speaking on relations between the two world powers at George Washington University ahead of a high-profile state visit this week by Chinese President Xi Jinping.
Rice urged China to join the US in promoting responsible forms of state behavior in cyberspace. She said it would be a "critical factor" in determining trajectory of US-China ties. "This isn't a mild irritation; it's an economic and national security concern to the United States. It puts enormous strain on our bilateral relationship," Rice said.
"We want a business climate where intellectual property rights and trade secrets are respected, not stolen," Rice said.
China is suspected in the recent theft of personal data of millions of current and former US government employees. The US has not publicly blamed China for that breach, which experts suspect was designed to gather intelligence rather than for commercial gain.
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Rice's overriding theme was a familiar one: The US wants to cooperate with China on tackling global concerns, but China should abide by global norms in economic policy, its security policy and behavior in the disputed seas of East Asia and in human rights.
Referring to the South China Sea, where China has spooked its neighbors by building artificial islands with military facilities to assert its disputed territorial claims, Rice asserted that the US "will sail, fly and operate anywhere that international law permits."
But Rice noted that confidence-building measures by the US and Chinese militaries agreed last year have reduced the risk of "unintended incidents" between the two forces in the Asia-Pacific where China is emerging as a challenge to decades of US pre-eminence.