"We do believe it's in everyone's interest that China and ASEAN engage in a diplomatic process toward the shared goal of a code of conduct," Clinton told a joint news conference in Beijing with Foreign Minister Yang Jiechi.

Clinton has voiced hope that China, which claims virtually all of the strategic waterway, will agree to work out a code of conduct on the disputes and has encouraged Southeast Asian nations to stand united.

On Wednesday she denied charges that the United States was trying to hold back China, saying that President Barack Obama's administration did not want "unhealthy competition" between the Pacific powers.

"Both President Obama and I have said frequently that the United States welcomes the rise of a strong, prosperous and peaceful China," she said.

There are 10 members of the Association of Southeast Asian Nations (ASEAN).