US President Barack Obama insisted Wednesday the United States did not fear rising China and was not plotting to exclude it from a nascent and potentially powerful new pan-Pacific trade bloc.

Obama bluntly spelled out his evolving policy towards Beijing in Australia on the latest leg of a Pacific tour that has bared divisions between the two giant powers on trade, currency and some geopolitical questions.

"I think the notion that we fear China is mistaken. The notion that we are looking to exclude China is mistaken," said Obama at a news conference with Australian Prime Minister Julia Gillard in Canberra.

The president also again revealed frustration over China's economic policies, saying Beijing would have to "rethink" trade practices if it wanted to join 12 nations negotiating the new Trans-Pacific Partnership.

Beijing has expressed scepticism about the standards required of potential TPP members as a ticket to join a pact envisaged by the United States as a cornerstone of the future economic and political architecture of Asia.

"Now, if China says, we want to consult with you about being part of this as well, we welcome that," Obama said, but warned Beijing would have to measure up to a "clear set of principles that all of us can abide by."

"The main message that I've said not only publicly but also privately to China is that with their rise comes increased responsibility," Obama said.

"It is important for them to play by the rules of the road."

The TPP will be designed to better integrate regional economies across the dynamic Pacific region, and analysts say it could have a powerful impact on growth rates.

But the talks on setting up the pact look likely to be taxing as Asian governments will have to accept new rules for state-owned firms and agree to tariffs on agriculture and the US will have to dismantle protectionist barriers.

Obama's comments were his most clear statement yet of his China policy, which has evolved from a desire to engage Beijing over a wide area in his first year in office, to the current more confrontational stance.

The president is also being assailed by Republican presidential candidates over China, but his position seems more a response to three years of frustration with Beijing rather than an effort to shore up his political flank.

Obama argues China is keeping its yuan currency artificially low to support its exports to the detriment of US industry, and accuses it of eroding the US competitive edge by failing to protect intellectual property rights.

The president started his Pacific tour in Hawaii by hosting the Asia Pacific Economic Cooperation (APEC) summit, at which the concept of the TPP gathered momentum.

In Australia, he and Gillard announced a deployment of up to 2,500 US Marines to Darwin, in a signal of Washington's desire to stand up for its allies in the region.

Analysts see the Australian deployment and a US effort to pivot to Asia after a decade of misery in the Middle East, as a recognition that the next US foreign policy challenge will come from China in the 21st Century.

"This is a growing region. It is a vital region. The United States is going to be a huge participant in both economic and security issues in the Asia Pacific region," Obama said.

Obama will lay out his updated vision for Asia on Thursday in a speech to the Australian parliament, which is expected to touch on China, trade and diplomacy, and issues such as Myanmar's political reform process.

He and Gillard will then travel to Darwin to highlight the US deployment, which will begin with 250 Marines in 2012.

The president will then move on to Bali and make the first appearance by a US leader at the East Asia summit, which Washington sees as a forum for discussions on security while APEC concentrates on economic issues.