"New Zealand sets a good example for working with China, we want to see more multi-nation deals that include China."
She pointed to a new announcement for building a water system on Rarotonga, which is a joint venture between China and New Zealand as a good model for aid delivery.
Clinton said the United States will focus more on the Pacific - and give it "equal emphasis" with the Asia half of the Asia Pacific.
"There is room for all of us in the Pacific. We are here for the long term."
She said there was a lot to do in the Pacific: "There is no doubt our relationship with New Zealand provides a strong foundation for engagement across the Pacific."
Mr Key said he welcomed that "rebalancing."
Clinton will this afternoon announce a joint venture between the United States, New Zealand and Australia which she said would help promising young women build up networks and experience.
Ms Clinton said the United States appreciated New Zealand's contribution in Afghanistan, and acknowledged the recent deaths of soldiers in both Australia and New Zealand.
CLINTON PROMISES MORE AID FOR PACIFIC
US Secretary of State Hillary Clinton says the US wants to work with other major powers in the Pacific, including China, saying "the Pacific is big enough for us all".
Clinton spoke at the Post Forum dialogue in Rarotonga this morning on a visit that is viewed as an effort to shore up the United States' influence in the Pacific against China's increased role.
She said the Barack Obama administration had pushed to increase engagement across the Asia-Pacific region, which was a key driver of global economics and politics and promised a raft of new aid funding, saying "we will be here with you for the long haul".
"I have said that the 21st Century will be America's Pacific century with an emphasis on Pacific. The Pacific part of Asia Pacific doesn't always get as much attention as it should, but the United States knows that this region is strategically and economically vital and becoming more so."
Clinton emphasised the United States' historic links with the Pacific, saying it had underwritten the security that made it possible for Pacific people to trade and travel freely.
"We have consistently protected the Pacific sea lanes through which a great deal of the world's commerce passes and now we look to the Pacific nations in a spirit of partnership for your leadership on some of the most urgent and complex issues of our time, such as climate change."
Clinton emphasised the shared histories and values of the Pacific and the United States, which she said was also a Pacific country, including Hawaii as its "gateway to the Pacific."
She also spoke about the need for aid coordination and working with other aid donor countries - something China has been criticised for failing to do.
Clinton also praised Australia's Prime Minister Julia Gillard for a major funding announcement to promote women in leadership roles and said the United States would be involved in a joint project with New Zealand and Australia to identify promising young women and provide them with the support needed to succeed.
CLINTON LANDS IN RAROTONGA
US Secretary of State Hillary Clinton arrived for a breakfast with Pacific leaders at Rarotonga's Trader Jacks this morning - and made a beeline for three nuns who were visiting from America.
Clinton arrived resplendent in an orange trouser suit and full of good cheer, telling media that Rarotonga was so idyllic she was worried some of her staff would refuse to move on to the next stop on her tour - Indonesia.
Some American nuns standing nearby called out "God Bless America" as she walked into Trader Jacks, and Clinton did a U-turn and walked over to meet them.
She spoke to them briefly and posed for photos before thanking them for their service.
Inside the restaurant, platters of fresh fruit, croissants and mini-pies were waiting for the leaders.
Clinton said she had enjoyed her welcome at the airport where lines of dancers and drummers had greeted her, loading lei over her neck - but was wary because there was already footage on YouTube of her dancing.
"So I was thinking, 'Right, I won't dance this time.' It was wonderful."
Prime Minister John Key was not at the breakfast - New Zealand was represented by Foreign Minister Murray McCully.
Key is due to meet Clinton for a one-on-one meeting before he leaves to return to New Zealand this afternoon.
The nuns - from the Daughters of Charity St Vincent de Paul - said it was astonishing to meet Clinton.
Sister Kathleen Appler said they were in the area during Clinton's visit purely by chance and had thought they would never get such an opportunity in the United States, so had called out.
"It was a wonderful experience."
