The United States sees plenty of scope for working with China and is following New Zealand's lead in the area, United States Secretary of State Hillary Clinton says.

Clinton had lunch with Prime Minister John Key at the High Commissioner's residence in Rarotonga today.

While dining on yellow fin tuna sashimi, New Zealand crayfish, veal and lamb, the leaders managed to discuss the state of world affairs.

They discussed Afghanistan and Clinton expressed her condolences for the recent Kiwi and Australian deaths there.

Key gave a commitment to stay on course with the ISAF forces but made clear that this meant returning in 2013.

The power struggle between the United States and China has been a major discussion point at the Pacific Islands Forum in the Cook Islands this week.

In a speech this morning Clinton said the US was in the Pacific for the "long haul".

"I think, after all, the Pacific is big enough for all of us."

After her meeting with Key, Clinton said New Zealand set a good example of working with China.

"New Zealand has worked with China on water issues, for example, we want to see more multi-national development projects that include the participation of China."

The important thing was to ensure that aid was given in a "fair and transparent way".

China has been criticised in the past for putting conditions on aid funding, particularly in Africa, and for issuing soft loans in the Pacific that struggling nations cannot afford to pay back.

"We believe that there's more that China can do with us, with New Zealand, with Australia."

It was important for the Pacific Island nations to have good relationships with as many countries as possible, including China, she said.

She will discuss the matter when she is in Beijing next week.

"We also believe on the aid front that there is a lot of cooperation between us and China. It is something that we're modelling after New Zealand."

Key said it made sense to try and work with China and give direction to aid projects rather than have them commit to other, less important issues.

"[Mrs Clinton] made the point that in other parts of the world their aid has been tied to resources, and access to resources and countries of the Pacific just needed to be careful."

He did not believe that was happening in the Pacific currently.

Chinese Vice Foreign Minister has said China was here to help, not dominate the Pacific.

"We are here in this region not to seek any particular influence, still less dominance."

Asked whether Clinton's presence was a response to concerns about growing Chinese influence in the region, Cui said we should ask her.

"Secretary Clinton is arriving in a short while. You can ask her this question. I'm not her spokesperson."

China was not in the Pacific to compete with anybody, he said.

Clinton leaves the Cooks for Jakarta on Sunday.

- © Fairfax NZ News