Welcoming a top delegation of Chinese officials to Washington for annual strategic and economic talks, Biden said Beijing must be at the table in all important global negotiations.
"I believe that the future of China's success and global influence is directly tied to the extent to which it acts as a responsible stake-holder," Biden said.
"Essential to this is to find new ways to work together even as we seek to manage future competition."
"Responsible countries adhere to international law and work together to keep international sea-lanes open for unimpaired commerce. Eighty percent of all the commerce today is on the back of a ship somewhere floating on the oceans," Biden said.
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"Eighty per cent of all the world's economy. The notion of sea lanes being open and protected is even more crucial today than any time in human history, because of the interconnectiveness of the world."
But China said last month it will project its military power further beyond its borders at sea and more assertively in the air.
"Nations that discard diplomacy and use coercion and intimidation to settle disputes, or turn a blind eye to aggression of others only invite instability," Biden warned.
Although the US vice president did not gloss over differences, he praised China for being "a partner" on many issues from nuclear negotiations to climate change.
The Chinese side is being led by Vice Premier Wang Jang and China's State Councilor Yang Jiechi.